Gold prices rose in European trade on Monday for the first session in three days, recovering from three-week lows on short-covering as the dollar dipped against major rivals. 

Now investors await important US industrial data later today, expected to provide fresh pricing for the odds of a Fed rate cut in upcoming months.

Gold Prices

Gold prices rose 0.7% to $2876 an ounce, with a session-low at $2857.

On Friday, gold lost 0.65%, plumbing three-week lows at $2832 an ounce, as the dollar strengthened back then.

The precious metal lost 2.65% last week, the first weekly loss in 2025 on profit-taking away from a record high at $2856.

The Dollar

The dollar index fell 0.4% on Monday, away from a two-week high at 107.66, and about to mark the first loss in four sessions against major rivals.

The dollar has also dipped after Europe presented Washington with an emergency peace deal for Ukraine, while the US Treasury Secretary spoke about potentially less than 25% tariffs on Mexico and Canada.

US Rates

Recent US data showed consumer spending fell unexpectedly in January, reducing inflationary pressures on Fed’s policymakers.

Following the data and according to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut rose from 4.5% to 7%.

Now traders await important US industrial data later today, important for gauging US growth in the first quarter.

SPDR

Gold holdings at the SPDR Gold Trust fell 1.72 tons to a total of 904.38 tons, away from 907.82 tons, the highest since August 2023.

The euro rallied in European trade on Monday against a basket of major rivals, starting its recovery from two-week lows against the dollar and on track for the first profit in four days as European leaders agreed to present urgent plans to the US to achieve peace in Ukraine. 

Additionally, after bullish remarks from some European Central Bank officials, the odds of a March ECB interest rate cut dropped, with traders awaiting important eurozone inflation data later today to gather more clues. 

The Price

The EUR/USD pair rose 0.5% today to $1.0423, with a session-low at $1.0399.

The euro fell 0.25% on Friday, marking  the third loss in a row, and plumbing a two-week trough at $1.0360.

The euro lost 0.8% last week against the greenback, the second weekly loss in a row after Trump’s tariff threats.

Ukraine Peace Deal

An emergency European summit was held in London and attended by 18 European leaders, including Ukrainian president Volodomyr Zelensekiy, to show strong support to Ukraine and develop a peace deal to present to Washington.

UK Prime Minister Keir Starmer said European leaders agreed on the items of the plan to support Kiev and achieve fair and lasting peace, while providing strong security guarantees.

Such momentum towards a peace resolution to the Ukrainian war has served to boost the euro.

European Rates

European Central Bank President Christine Lagarde said recent positive developments in the eurozone indicate a rate cut isn’t an urgent matter.

ECB member Isabel Schnabel asserted the importance of not rushing into taking more monetary easing steps, as interest rates are approaching neutral levels already.

Following such remarks, the odds of an ECB 0.25% rate cut in March fell from 65% to 55%.

European Inflation

Later today, investors await important eurozone inflation data, expected to provide strong clues on the odds of an ECB interest rate cut in March.

Eurozone’s consumer prices are expected up 2.3% in February, slowing down from 2.5% in January.

The Japanese yen rose in Asian trade on Monday against a basket of major rivals, moving in a positive zone against the US dollar and recovering from two-week lows, and about to trade above 150 yen once more.

The yen performed strongly in February, led by the outlook of a Japanese interest rate hike in March with traders now waiting for more clues on the future path of Japan’s monetary policies.

The Price

The USD/JPY pair fell 0.25% today to 150.24 yen per dollar, with February 20 highs at 151.02.

The yen lost 0.55% on Friday, the third loss in a row on profit-taking away from a four-month high at 148.56.

The yen rallied 2.95% in February against the dollar, marking the second monthly profit in a row, and the largest since July 2024 amid mounting inflationary pressures in Japan and following bullish remarks from Bank of Japan officials.

Japanese Rates

BOJ Deputy Governor Shinichi Uchida said on Friday the bank will continue to reduce its purchases of government bonds despite the recent rise in yields, asserting its massive holdings of bonds still act as a massive stimulus to the economy.

Uchida reiterated the BOJ’s readiness to hike interest rates if economic developments and prices went as expected

The odds of a BOJ interest rate hike in March now stand at 85%.

Gold prices fell on Friday as the dollar rallied against most major rivals amid mounting concerns about the global trade war, however, the precious metal still marked monthly profits despite the losses sustained this week.

Earlier data showed US personal spending rose 2.5% y/y in January, slowing down from 2.6% in December.

US President Donald Trump announced on the Truth Social platform plans to impose 25% tariffs on Mexican and Canadian imports starting in early March.

Otherwise, the dollar index rose 0.4% as of 20:29 GMT to 107.6, with a session-high at 107.6, and a low at 107.1.

On trading, gold April futures fell 1.7%, or $47.4 to $2848.5 an ounce, with a weekly loss of 1.8%, and a monthly profit of 0.5%.