Gold prices rose in the European market on Wednesday to extend their gains for the second consecutive day, recording a three-week high based on the broad decline of the US dollar against a basket of global currencies, following the agreement between the United States and Iran on a two-week ceasefire, which includes the opening of the Strait of Hormuz to global navigation.

With the sharp drop in global oil prices, indicators of receding inflationary pressures on monetary policymakers at the Federal Reserve are increasing, which strengthens the probabilities of cutting American interest rates this year.

Price Overview

- Gold prices today: gold prices rose by 3.25% to ($4,857.56), the highest since March 19, from the opening level of trading at ($4,706.34), and recorded a low of ($4,706.34).

- At the settlement of prices on Tuesday, gold prices achieved an increase of 1.25%, marking the first gain in three days, supported by the decline of the US dollar.

US Dollar

The dollar index fell on Wednesday by 0.85%, deepening its losses for the third consecutive session and recording a four-week low at 98.69 points, reflecting a broad decline in the levels of the American currency against a basket of global currencies.

As is known, the decline in the levels of the American currency makes gold bullion priced in US dollars more attractive to buyers who hold other currencies.

Risk sentiment in the markets improved, and investor appetite for buying global assets and currencies increased following the ceasefire agreement between the United States and Iran.

Iran War Updates

- Washington and Tehran agree on a two-week ceasefire and plan to open the Strait of Hormuz.

- US President Donald Trump agreed to suspend attacks and aerial bombardment against Iran for 14 days, following intensive Pakistani and Qatari mediation.

- Iran announced its agreement to reopen the Strait of Hormuz to international navigation "fully and safely," with technical coordination with the Iranian armed forces to secure the passage of ships.

- Direct negotiations to end the war are scheduled to begin next Friday in the city of Islamabad in Pakistan, as the truce aims to provide an opportunity for a diplomatic solution.

Global Oil Prices

Global oil prices fell by an average of 13%, recording their lowest levels in several weeks, as concerns over global supply shortages receded, especially after the reopening of the Strait of Hormuz to giant oil tankers.

US Interest Rates

- According to the CME FedWatch tool from CME Group: the pricing of the probabilities of keeping American interest rates without any change in the upcoming April meeting is currently stable at 99%, and the pricing of the probabilities of raising interest rates by about 25 basis points is stable at 1%.

- After the pause in the war, traders began to price the existence of probabilities for an interest rate cut by the Federal Reserve this year.

- In order to re-price those probabilities, investors await later today the release of the minutes of the last monetary policy meeting of the Federal Reserve.

Expectations about Gold Performance

Nicholas Frappell, global head of markets at ABC Refinery, said: People entered this session believing that escalation was highly likely, but the announcement of a two-week truce turned this expectation upside down, and that was positive for gold.

Independent metals trader Tai Wong said: This is a temporary recovery, and it remains to be seen whether Iran will adhere to it. For gold, the 200-day moving average at $4,930, and then $5,000, will represent major obstacles.

SPDR Fund

Gold holdings at the SPDR Gold Trust fund, the largest global exchange-traded fund backed by the metal, remained without significant change on Tuesday, leaving the total at 1,054.42 metric tons, which is the highest level since last February 20.

The euro rose in European trading on Wednesday against a basket of global currencies, extending its gains for the third consecutive day against the US dollar and recording a five-week high, amid improved sentiment in global markets after the United States and Iran agreed on a two-week ceasefire, which includes the opening of the Strait of Hormuz to global navigation.

With the sharp drop in global oil prices, indicators of receding inflationary pressures on monetary policymakers at the European Central Bank are increasing, which reduces the likelihood of raising European interest rates this year.

Price Overview

- Euro exchange rate today: the euro rose against the dollar by 0.9% to ($1.1697), the highest since March 3, from the opening price today at ($1.1593), and recorded a low of ($1.1589).

- The euro ended Tuesday's trading up by 0.45% against the dollar, marking its second consecutive daily gain, amid hopes of reaching a ceasefire agreement in the Middle East under Pakistani sponsorship.

US Dollar

The dollar index fell on Wednesday by 0.7%, deepening its losses for the third consecutive session and recording a four-week low at 98.84 points, reflecting a broad decline in the levels of the American currency against a basket of global currencies.

Risk sentiment in the markets improved, and investor appetite for buying global assets and currencies increased following the ceasefire agreement between the United States and Iran.

Iran War Updates

- Washington and Tehran agree on a two-week ceasefire and plan to open the Strait of Hormuz.

- US President Donald Trump agreed to suspend attacks and aerial bombardment against Iran for 14 days, following intensive Pakistani and Qatari mediation.

- Iran announced its agreement to reopen the Strait of Hormuz to international navigation "fully and safely," with technical coordination with the Iranian armed forces to secure the passage of ships.

- Direct negotiations to end the war are scheduled to begin next Friday in the city of Islamabad in Pakistan, as the truce aims to provide an opportunity for a diplomatic solution.

Global Oil Prices

Global oil prices fell by an average of 13%, recording their lowest levels in several weeks, as concerns over global supply shortages receded, especially after the reopening of the Strait of Hormuz to giant oil tankers.

European Interest Rates

- Following the fall in global oil prices, money market pricing of the probabilities of the European Central Bank raising European interest rates by about 25 basis points in this April fell from 35% to 10%.

- In order to re-price the above probabilities, investors await the release of more economic data in the eurozone regarding the levels of inflation, unemployment, and wages.

The Japanese yen rose broadly in the Asian market on Wednesday against a basket of major and minor currencies, extending its gains for the second consecutive day against the US dollar and recording its highest level in a week, driven by improved sentiment in global markets after the United States and Iran agreed on a two-week ceasefire, which includes the opening of the Strait of Hormuz to global navigation.

With the sharp drop in global oil prices, indicators of receding inflationary pressures on monetary policymakers at the Bank of Japan are increasing, which reduces the likelihood of raising Japanese interest rates later this month.

Price Overview

- Japanese yen exchange rate today: the dollar fell against the yen by 0.8% to (¥158.29) as the lowest level in a week, from the opening price today at (¥159.59), and recorded a high of (¥159.75).

- The yen ended Tuesday's trading up by less than 0.1% against the dollar, marking its second gain in three days, based on hopes of ending the Iranian war.

US Dollar

The dollar index fell on Wednesday by 0.7%, deepening its losses for the third consecutive session and recording a four-week low at 98.84 points, reflecting a broad decline in the levels of the American currency against a basket of global currencies.

Risk sentiment in the markets improved, and investor appetite for buying global assets and currencies increased following the ceasefire agreement between the United States and Iran.

Iran War Updates

- Washington and Tehran agree on a two-week ceasefire and plan to open the Strait of Hormuz.

- US President Donald Trump agreed to suspend attacks and aerial bombardment against Iran for 14 days, following intensive Pakistani and Qatari mediation.

- Iran announced its agreement to reopen the Strait of Hormuz to international navigation "fully and safely," with technical coordination with the Iranian armed forces to secure the passage of ships.

- Direct negotiations to end the war are scheduled to begin next Friday in the city of Islamabad in Pakistan, as the truce aims to provide an opportunity for a diplomatic solution.

Global Oil Prices

Global oil prices fell by an average of 13%, recording their lowest levels in several weeks, as concerns over global supply shortages receded, especially after the reopening of the Strait of Hormuz to giant oil tankers.

Japanese Interest Rates

- Following the fall in global oil prices, the pricing of the probabilities of the Bank of Japan raising interest rates by a quarter of a percentage point in the April meeting fell from 10% to 5%.

- In order to re-price those probabilities, investors await the release of more data on the levels of inflation, unemployment, and wages in Japan.

Wheat contracts in Chicago fell on Tuesday under pressure from expectations of long-awaited rainfall that may improve crop prospects in the drought-affected US Plains.

In contrast, corn and soybean prices rose slightly supported by the rise in crude oil prices. One grain trader in Singapore said: "There is some rain expected for the hard red winter wheat regions in the United States, and global supplies are generally sufficient at the moment."

The most active wheat contract on the Chicago Board of Trade (CBOT) fell by 0.1% to reach $5.94 and 3/4 per bushel at 02:26 GMT. Meanwhile, corn added 0.1% to record $4.54 and 1/4 per bushel, and soybeans rose half a cent to reach $11.67 and 1/4 per bushel.

Wheat prices declined with rain forecasts in the Plains region, which may strengthen the yield opportunities for winter wheat in the heart of the US wheat belt. Meteorologists indicated that beneficial rains are expected in the eastern two-thirds of the wheat belt during the next ten days, with a lower probability in the far western third of the region.

US winter wheat crop ratings came in at 35% good to excellent in the first weekly crop report for the 2026 season issued by the US Department of Agriculture, after the markets closed on Monday, recording the lowest level for this time of year since 2023, compared to 48% in the previous year, and analysts had expected 42% according to a Reuters poll.

Oil prices continued gains on Tuesday after US President Donald Trump escalated his rhetoric toward Iran, threatening to take stronger actions if the country fails to reopen the Strait of Hormuz, which is a major transit point for global oil. Grain and vegetable oil prices are often affected by energy prices, given the increasing use of agricultural products in the renewable fuel industry.