Gold prices declined in the European market on Monday, continuing their losses for the second consecutive day under pressure from rising global oil prices, which are fueling inflation concerns and expectations of higher interest rates.

This comes amid anticipation of updates regarding peace negotiations between the United States and Iran, especially as the market awaits Iran's stance following the U.S. response to an Iranian proposal delivered via Pakistani mediators.

Price Overview

* Gold Prices Today: Gold prices fell by 0.9% to ($4,573.85), from an opening level of ($4,614.10), recording a session high of ($4,629.43).

* At Friday's close, gold prices lost 0.2%, marking the fourth loss in five days due to rising global oil prices.

* Last week, gold prices lost more than 2%, marking the second consecutive weekly loss due to inflation fears and the potential for global interest rate hikes.

Global Oil Prices

Oil prices rose in global markets on Monday by more than 1%, resuming their ascent near multi-week highs amid fears of escalating tensions between the United States and Iran over the Strait of Hormuz.

U.S. President Donald Trump stated that Washington would begin efforts Monday morning to release ships stranded in the Strait of Hormuz as a humanitarian gesture to assist neutral nations in the U.S.-Israeli war with Iran.

Official Iranian media reported that the United States conveyed its response to a 14-point Iranian proposal through Pakistan. Tehran seeks an end to the U.S. blockade and a postponement of nuclear negotiations, while Washington insists on making a nuclear deal the priority.

The Federal Reserve and U.S. Interest Rates

* The Federal Reserve kept interest rates unchanged last week for the third consecutive meeting.

* The FOMC voted 8 to 4 to maintain the benchmark federal funds rate in the 3.50% to 3.75% range, the lowest level since September 2022.

* The vote saw the largest dissent within the Federal Reserve since 1992, as some members no longer see a need for the U.S. central bank to lean toward monetary easing.

* Fed Chair Jerome Powell admitted that the conflict in the Middle East has created "new inflationary pressures" that were not previously accounted for.

* Minneapolis Fed President Neel Kashkari stated that the longer the war with Iran continues, the greater the risks of high inflation and economic damage, limiting the central bank's ability to provide guidance on interest rate policy at this time.

* Chicago Fed President Austan Goolsbee said on Saturday, following "bad" recent price data, that caution must be exercised regarding interest rate cuts until inflation begins to decline.

* According to the CME FedWatch Tool: Market pricing for the probability of keeping U.S. interest rates unchanged in June stood at 95%, with a 5% probability of a 25-basis-point cut.

* To refine these probabilities, investors are closely monitoring upcoming U.S. economic data and comments from Federal Reserve officials.

Gold Performance Forecast

Tim Waterer, chief market analyst at KCM Trade, said: "Gold is still suffering from the residual effects of the Federal Reserve's hawkish statements last week, particularly the prominent dissenting votes against further monetary easing."

Waterer added: "We expect gold to trade in a range between $4,400 and $5,500 by the end of the year. Reaching the upper end of this range would require a sustained de-escalation of tensions in the Middle East and a cooling of inflationary pressures, while persistently high oil prices will keep the metal in the lower half of the range."

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged on Friday. The total stays at 1,035.77 metric tons, the lowest level since October 16, 2025.

The Euro rose in the European market on Monday against a basket of global currencies, resuming gains that briefly paused on Friday against the U.S. dollar. The currency is approaching a multi-week high, benefiting from a slowdown in the greenback as investors assess developments in peace talks between the United States and Iran.

ECB President Christine Lagarde stated last week that the option of raising interest rates was discussed extensively during the recent meeting, noting that the upcoming meeting in June will be the "appropriate time" to re-evaluate the path of monetary policy.

Price Overview

* Euro Exchange Rate Today: The Euro rose against the dollar by approximately 0.25% to ($1.1747), up from Friday's closing price of ($1.1719), recording a session low of ($1.1720).

* The Euro ended Friday's trading down 0.1% against the dollar due to correction and profit-taking, after having reached a near two-week high of $1.1785 earlier in the session.

The U.S. Dollar

The dollar index fell by more than 0.2% on Monday, resuming losses that paused on Friday. This decline reflects a retreat in the U.S. currency against a basket of major and minor currencies.

The decline comes as safe-haven demand for the dollar slows while markets evaluate recent intensive talks between the U.S. and Iran. Official Iranian media reported that the U.S. conveyed its response to a 14-point Iranian proposal through Pakistan. Tehran seeks an end to the U.S. blockade and a postponement of nuclear negotiations, while Washington remains insistent on prioritizing a nuclear deal.

President Donald Trump stated that Washington would begin efforts Monday morning to release ships stranded in the Strait of Hormuz as a humanitarian gesture to assist neutral nations affected by the U.S.-Israeli war with Iran.

European Interest Rates

* In line with expectations, the ECB kept its key interest rates unchanged last week at 2.15%—the lowest level since October 2022—marking the seventh consecutive meeting without a change.

* President Lagarde noted that the Governing Council reached a unanimous decision to hold, despite a lengthy discussion regarding the "option to hike," and confirmed that June will be the "appropriate time" to reassess monetary policy.

* Following the meeting, money market pricing for a 25-basis-point rate hike by the ECB in June rose from 35% to 55%.

* Investors are now awaiting further Eurozone economic data regarding inflation, unemployment, and wages to further refine these interest rate expectations.

JThe Japanese yen rose in the Asian market on Monday against a basket of major and minor currencies, resuming gains that had briefly paused in the previous session against the U.S. dollar. The currency moved closer to a two-month high amid growing speculation of a Bank of Japan intervention in the foreign exchange market, capitalizing on lower liquidity during Japan's Golden Week holidays.

As inflationary pressures on BoJ monetary policymakers recede, the likelihood of a Japanese interest rate hike in June has declined, as the market awaits more data on the developments of the world's fourth-largest economy.

Price Overview

*   Japanese Yen Exchange Rate Today: The dollar fell against the yen by about 0.7% to (156.95¥), from Friday's closing price of (157.02¥), after recording a session high of (157.25¥).

*   The yen ended Friday's trading down by approximately 0.3% against the dollar due to correction and profit-taking operations, after having hit a two-month high of 155.49 yen earlier in the session.

*   Last week, the yen achieved a gain of about 1.45% against the dollar, marking its fourth weekly rise in five weeks and its largest weekly gain since late February, driven by BoJ intervention in the exchange market.

Japanese Monetary Authorities

Officials in Tokyo have refrained from confirming whether they have actually intervened in the exchange market to support the local currency. However, sources told Reuters that Japanese monetary authorities have indeed conducted yen-buying operations for the first time in two years.

Japan's top currency diplomat, Atsushi Mimura, stated on Friday that speculation remains widespread, issuing an explicit warning that Tokyo is prepared to return to the markets just hours after intervening to support the struggling yen.

Responding to a question about the possibility of Tokyo's intervention in the currency market, Mimura told reporters: "I will not comment on what we will do in the future. But I assure you that the Golden Week holiday in Japan has only just begun."

Opinions and Analysis

*   Mahjabeen Zaman, head of FX research at ANZ Bank in Sydney, stated: "The primary focus will be on whether additional intervention will occur, especially with Japan closed for the Golden Week holiday, which leads to lower liquidity during this period."

*   Zaman added: "More importantly, is whether the United States will join Japan's efforts to support the yen. If yen weakness persists, it can be argued that the chances of bilateral intervention will increase."

Japanese Interest Rates

*   Data from last week showed that core inflation in Tokyo slowed, contrary to market expectations for April.

*   Following that data, the market pricing for the probability of the BoJ raising interest rates by a quarter-point in the June meeting fell from 75% to 65%.

*   To re-evaluate these probabilities, investors are awaiting further data on inflation, unemployment, and wage levels in Japan.

*   BoJ Governor Kazuo Ueda stated last week that there is no immediate need to raise interest rates.

*   The BoJ kept interest rates unchanged last week for the third consecutive meeting, warning of escalating inflationary pressures due to the repercussions of the war with Iran and high energy prices.

*   The vote to hold rates passed with 6 members in favor and 3 members calling for a 25-basis-point hike to the 1.0% range.

Oil prices declined on Friday after Iran sent an updated peace proposal to mediators in Pakistan, reviving hopes for a potential settlement with the United States.

U.S. crude oil futures fell by more than 3% to reach $101.57 per barrel by 2:10 p.m. ET, while global benchmark Brent crude lost about 2% to settle at $107.98 per barrel.

Pakistani officials confirmed to MS Now that mediators had received an updated proposal from Iran to end the war, noting that the document has been delivered to the United States. However, President Donald Trump later stated he was not satisfied with the Iranian offer.

"Iran wants to make a deal, but I’m not satisfied with it," Trump told reporters at the White House, adding, "Iran wants a deal because they effectively no longer have a military."

The 60-Day War Powers Deadline

President Trump is facing a 60-day deadline under the War Powers Resolution regarding military operations in the conflict with Iran. Under the 1973 law, a president must withdraw forces within 60 days of notifying Congress of their deployment unless lawmakers authorize continued military operations—which has not yet occurred.

The Trump administration argued on Friday that the ceasefire reached three weeks ago effectively "ended" hostilities, according to MS Now. This interpretation could allow the White House to avoid seeking congressional approval to continue the war.

An administration official stated that the absence of direct clashes between U.S. and Iranian forces since the ceasefire began on April 7 means the 60-day clock is no longer in effect. "For the purposes of the War Powers Resolution, the hostilities that began on Saturday, February 28, have ended," the official said.

This argument was first introduced by Defense Secretary Pete Hegseth during a House Armed Services Committee hearing on Thursday, where he stated that the ceasefire effectively halted the war.

Background and Ongoing Tensions

* Timeline: The U.S. and Israel launched strikes on Iran on February 28. Trump officially notified Congress on March 2, triggering the 60-day clock with a deadline of May 1.

* Extensions: While Trump can request a 30-day extension under the law, lawmakers indicate he has not yet done so.

* The Blockade: Despite the ceasefire, Trump escalated threats on Wednesday, vowing to maintain the U.S. naval blockade until Tehran agrees to a new nuclear deal.

* Hormuz Stalemate: Tehran has refused to reopen the Strait of Hormuz unless the U.S. lifts its blockade of Iranian ports.

While the ceasefire holds for now, Axios reported that U.S. Central Command has developed plans for "short and powerful strikes" to break the diplomatic deadlock. Conversely, a senior Revolutionary Guard official threatened "long and painful strikes" against U.S. positions if Washington resumes its attacks, according to reports from Iranian media and Reuters.