Gold prices fell in European trading on Tuesday, extending their movement in negative territory for the fifth consecutive day and approaching again the lowest levels in four months, under pressure from the rebound of the US dollar in the foreign exchange market.

Uncertainty has increased once again in markets regarding developments in the Middle East war, especially after targeting Iranian energy facilities, in a development that significantly complicates the diplomatic landscape.

Observers believe these US-Israeli airstrikes undermine already fragile “bridges of trust” and make it difficult for Tehran to sit at the negotiating table under direct military pressure.

Price Overview

Gold prices today: gold fell 2.3% to $4,305.97, down from the session opening level of $4,406.67, after reaching a high of $4,448.40.

At Monday’s settlement, gold lost 1.9%, marking its fourth consecutive daily loss, and recorded its lowest level in four months at $4,098.23 per ounce.

Prices had pared losses of around 9% after US President Donald Trump announced talks with Iran and delayed targeting Iranian energy facilities.

US dollar

The dollar index rose on Tuesday, beginning to recover from a two-week low, reflecting a renewed increase in the US currency against a basket of global currencies.

The index had slipped on Monday to its lowest level in two weeks after US President Donald Trump postponed strikes on Iran’s electricity grid, a move that eased concerns about a prolonged war in the Middle East.

Iran war developments

Trump wrote on his Truth Social platform that the United States and Iran had held “very good and productive talks” on a “comprehensive and final resolution” to hostilities in the Middle East.

Trump added that he had instructed the Department of War to postpone all military strikes on Iranian energy facilities and infrastructure for five days.

According to Iranian news agencies, officials denied holding any talks with the United States, with some describing the reports as false and aimed only at calming markets.

Contrary to expectations, US and Israeli air forces launched intensive strikes on some energy facilities in Iran on Tuesday, a development that is expected to escalate military confrontations and prompt Iran’s Revolutionary Guard to carry out missile attacks on energy facilities in Israel and Gulf countries.

US interest rates

According to the CME FedWatch tool, markets are currently pricing a 92% probability that US interest rates will remain unchanged at the April meeting, while the probability of a 25-basis-point rate hike stands at 8%.

To reassess these expectations, investors are closely monitoring further economic data releases from the United States, in addition to tracking comments from Federal Reserve officials.

Gold outlook

Rajat Bhattacharya, chief investment strategist at Standard Chartered, said that although gold initially rose due to safe-haven demand at the start of the Iran conflict, prices have recently declined.

Bhattacharya added that this pattern is often repeated during periods of market stress, as investors raise liquidity to cover margin calls or simply take profits where possible, noting that the recent strength of the dollar has also weighed on gold demand.

SPDR fund

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined by 4.29 metric tons on Monday, marking the eighth consecutive daily decline, bringing the total to 1,052.70 metric tons, the lowest level since December 17.

The euro fell in European trading on Tuesday against a basket of global currencies, retreating from a two-week high against the US dollar amid corrective activity and profit-taking, as demand returned for the US currency as a preferred safe-haven asset, especially after the United States and Israel launched airstrikes on Iranian energy infrastructure.

Targeting Iranian energy facilities has significantly complicated the diplomatic landscape, as observers believe these strikes undermine already fragile “bridges of trust” and make it difficult for Tehran to return to the negotiating table under direct military pressure.

To assess the impact of the Iran war and rising energy prices on economic activity in Europe, markets are awaiting the release of key data on the main industrial and services sectors for March later today.

Price Overview

Euro exchange rate today: the euro fell 0.3% against the dollar to $1.1576, down from the session opening level of $1.1612, after reaching a high of $1.1618.

The euro ended Monday’s session up 0.35% against the dollar, hitting a two-week high of $1.1640 after Donald Trump announced talks with Iran and delayed any military strikes on Iranian energy facilities for five days.

US dollar

The dollar index rose on Tuesday, beginning to recover from a two-week low, reflecting a renewed rise in the US currency against a basket of global currencies.

The index fell on Monday to its lowest level in two weeks after US President Donald Trump postponed strikes on Iran’s electricity grid, a move that eased concerns about a prolonged war in the Middle East.

Trump wrote on his Truth Social platform that the United States and Iran had held “very good and productive talks” on a “comprehensive and final resolution” to hostilities in the Middle East.

Trump added: I have instructed the Department of War to delay all military strikes on Iranian energy facilities and infrastructure for five days.

According to Iranian news agencies, Iranian officials denied holding any talks with the United States, with some describing such reports as false and aimed only at calming markets.

Contrary to expectations, US and Israeli air forces launched intense strikes on some energy facilities in Iran on Tuesday, a move likely to escalate military confrontations and prompt Iran’s Revolutionary Guard to carry out missile attacks on energy facilities in Israel and Gulf countries.

European interest rates

The European Central Bank kept interest rates unchanged last week for the sixth consecutive meeting.

Sources told Reuters that the European Central Bank is likely to begin discussing interest rate hikes next month.

Following the meeting, money markets increased pricing for a 25-basis-point rate hike by the European Central Bank at the April meeting from 1% to 25%.

To reassess these expectations, investors are awaiting the release of key data on the main sectors of the European economy for March later today.

The Japanese yen fell in Asian trading on Tuesday against a basket of major and minor currencies, resuming its losses against the US dollar as demand returned for the US currency as a preferred safe-haven asset, especially after the United States and Israel launched airstrikes on Iranian energy infrastructure.

Targeting Iranian energy facilities has significantly complicated the diplomatic landscape, as observers believe these strikes undermine already fragile “bridges of trust” and make it difficult for Tehran to return to the negotiating table under direct military pressure.

The yen is also under pressure from data showing a slowdown in core inflation in Japan in February, indicating easing inflationary pressures on Bank of Japan policymakers and reducing the likelihood of a rate hike in April.

Price Overview

Japanese yen exchange rate today: the US dollar rose 0.25% against the yen to ¥158.79, up from the session opening level of ¥158.41, with a session low of ¥158.26.

The yen ended Monday’s session up 0.5% against the dollar, benefiting from a decline in the US currency after Donald Trump announced talks with Iran and delayed any military strikes on Iranian energy facilities for five days.

US dollar

The dollar index rose on Tuesday, beginning to recover from a two-week low, reflecting a renewed rise in the US currency against a basket of global currencies.

The index fell on Monday to its lowest level in two weeks after US President Donald Trump postponed strikes on Iran’s electricity grid, a move that eased concerns about a prolonged war in the Middle East.

Trump wrote on his Truth Social platform that the United States and Iran had held “very good and productive talks” on a “comprehensive and final resolution” to hostilities in the Middle East.

Trump added: I have instructed the Department of War to delay all military strikes on Iranian energy facilities and infrastructure for five days.

According to Iranian news agencies, Iranian officials denied holding any talks with the United States, with some describing such reports as false and aimed only at calming markets.

Contrary to expectations, US and Israeli air forces launched intense strikes on some energy facilities in Iran on Tuesday, a move likely to escalate military confrontations and prompt Iran’s Revolutionary Guard to carry out missile attacks on energy facilities in Israel and Gulf countries.

Core inflation

Data released in Tokyo on Tuesday showed Japan’s core consumer price index rose 1.6% in February, the slowest pace since March 2022, below market expectations of a 1.7% increase, after rising 2.0% in January.

These figures confirm the continued easing of inflationary pressures on Bank of Japan policymakers, reducing the likelihood of interest rate hikes in the first half of the year.

Japanese interest rates

Following the above data, markets reduced pricing for the probability of a quarter-point rate hike by the Bank of Japan at the April meeting from 30% to 15%.

To reassess these expectations, investors are awaiting further data on inflation, unemployment, and wages in Japan.

The Canadian dollar rose slightly against its US counterpart on Monday, as recent pessimism over the outlook for the Middle East war eased, allowing it to recover part of its losses after hitting a two-month low earlier in the session.

The Canadian currency, known as the “loonie,” was trading up 0.1% at 1.3715 per US dollar, or 72.91 US cents, after touching an intraday low of 1.3754, the weakest level since January 23.

Erik Bregar, Director of FX and Precious Metals Risk Management at Silver Gold Bull, said: “Markets have seen significant swings in broader risk sentiment. The Canadian dollar is behaving somewhat more steadily… and is not showing the same level of volatility we see in metals, equities, or bonds.”

The US dollar, considered a safe-haven asset, weakened against a basket of major currencies, while equities rose after US President Donald Trump announced he would delay strikes on Iranian energy infrastructure following talks described as “productive” between the two sides.

Oil prices — one of Canada’s key exports — also declined by 10.3% to $88.13 per barrel, easing some concerns that rising inflation could lead to tighter global monetary policy.

Money markets are currently pricing at least two interest rate hikes by the Bank of Canada this year, after expectations had previously leaned toward keeping policy unchanged before the outbreak of the conflict.

Bregar said: “The short end of the yield curve is overreacting. I don’t think any central bank will respond hastily to price increases lasting only one or two months.”

Data from the US Commodity Futures Trading Commission (CFTC) showed that speculators reduced their bullish bets on the Canadian dollar, with net non-commercial long positions falling to 886 contracts as of March 17, compared with 36,159 contracts in the previous week.

Canadian government bond yields declined across the curve, with the two-year yield falling by 14 basis points to 2.927%, after having reached its highest level since November 2024 at 3.212%.