Oil prices stabilized on Friday but remained on track for weekly gains as diplomatic efforts to end the war with Iran stalled. Tehran continues its closure of the Strait of Hormuz, while the U.S. Navy maintains restrictions on Iranian oil exports.

Brent crude futures for July delivery rose by 53 cents, or 0.5%, to $110.93 per barrel by 11:24 GMT. Meanwhile, West Texas Intermediate (WTI) futures fell by 56 cents, or 0.5%, to $104.51 per barrel.

Brent is heading for a weekly gain of approximately 5.2%, while U.S. crude is on course for a 10.5% weekly increase. The June Brent contract hit $126.41 per barrel on Thursday—the highest level since March 2022—before closing lower.

Ole Hansen of Saxo Bank noted: "The sharp reversal on Thursday confirms that the market climbs gradually but can fall rapidly on any sudden news of de-escalation, making conditions extremely difficult for traders."

Since the U.S. and Israeli-led offensive on Iran began in late February, oil prices have risen consistently due to the closure of the Strait of Hormuz, which has disrupted nearly one-fifth of the world’s oil and liquefied natural gas (LNG) supplies.

Giovanni Staunovo, an analyst at UBS, stated: "The upward trend for oil prices remains the path of least resistance as long as restrictions on flows through the Strait persist," adding that oil inventories are depleting rapidly due to market supply shortages.

Despite a ceasefire being in effect since April 8, Iranian Foreign Ministry spokesperson Esmaeil Baghaei stated Thursday evening that it is unrealistic to expect quick results from talks with the U.S., according to Iran’s official news agency.

In a related context, Anwar Gargash, advisor to the UAE President, posted on the "X" platform Friday that unilateral arrangements by Iran regarding freedom of navigation in the Strait of Hormuz cannot be trusted, following what he described as "treacherous aggression" against its neighbors.

A senior official in Iran’s Revolutionary Guard threatened Thursday to launch "long and painful strikes" on U.S. sites if Washington resumes its attacks, causing oil prices to spike during the session before retreating later.

U.S. President Donald Trump is scheduled to receive a briefing on plans for a series of new military strikes on Iran aimed at forcing Tehran into negotiations to end the conflict, according to a U.S. official speaking to Reuters.

The U.S. dollar fell against the Japanese yen during Friday’s trading, just one day after a widespread belief that authorities in Tokyo intervened to support the currency.

The dollar declined by as much as 0.66% to hit a session low of 155.60 yen, compared to 157.12 yen earlier in the day.

The yen had surged by approximately 3% on Thursday following steady flows of official buying believed to have pushed the dollar down to 155.5 yen from around 158.3 within an hour. Reports, including from Reuters, described the move as an intervention by Japanese officials.

While the immediate cause for Friday’s movements was not entirely clear, analysts pointed out that markets have entered a state of anticipation and caution following Thursday’s events, bracing for any sudden currency shifts.

Japan's top currency diplomat, Atsushi Mimura, stated earlier on Friday that speculation remains high, issuing an explicit warning that authorities are prepared to return to the market only hours after intervening to support the yen, which has lost about 5% of its value over the past three months.

The Japanese Ministry of Finance could not be reached for immediate comment.

Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets, said: "Liquidity is thin and investors are on edge after yesterday’s moves, making the market more susceptible to volatility in the USD/JPY pair."

He added: "Every time we see a significant move in the yen, questions will arise regarding the cause, especially in light of recent warnings."

This comes at a time when the significant interest rate differential between the United States and Japan, combined with expectations of lower trading volumes ahead of the holiday period, remains a major concern for authorities regarding potential sharp speculative attacks on the currency.

Gold prices fell in the European market on Friday, resuming a downward trend that briefly paused yesterday. The metal is approaching a four-week low and is on track for its second consecutive weekly loss, driven by rising global oil prices which have heightened fears of inflation and potential interest rate hikes.

Amidst the strongest internal opposition since 1992, the Federal Reserve kept interest rates unchanged for the third consecutive meeting on Wednesday, while warning of elevated inflation caused by energy costs.

Price Overview

*  Gold Prices Today: Gold fell by 1.25% to ($4,564.42), from an opening level of ($4,622.43), after reaching a session high of ($4,635.97).

*   At Thursday’s close, gold prices had risen by 1.75%, marking the first gain in four days as part of a recovery from a four-week low of $4,510.32 per ounce.

Global Oil Prices

Oil prices rose by an average of at least 1% in global markets, resuming their ascent near multi-week highs. This comes amid fears of renewed military confrontations between the United States and Iran and the continued closure of the Strait of Hormuz.

On Thursday, Iran stated it would respond with "long and painful strikes" on U.S. sites if Washington renews its attacks, and reaffirmed its claims over the Strait of Hormuz. Rising global oil prices are renewing concerns about accelerating inflation, which may push global central banks to raise interest rates in the near term—a sharp shift from pre-war expectations of rate cuts or prolonged pauses.

The Federal Reserve

At the conclusion of its third periodic monetary policy meeting this year, and in line with most forecasts, the Federal Reserve maintained interest rates on Wednesday. The Federal Open Market Committee (FOMC) voted 8 to 4 to keep the benchmark federal funds rate at the 3.50% to 3.75% range, the lowest level since September 2022.

The vote saw the largest dissent within the Fed since 1992, as some members no longer believe the central bank should signal a bias toward monetary easing. The policy statement noted that inflation remains "elevated" above the 2% target, impacted by high energy and shipping costs resulting from the naval blockade of Iran and the closure of the Strait of Hormuz.

In his press conference, Fed Chair Jerome Powell admitted that the conflict in the Middle East has created "new inflationary pressures" but stressed that the Fed would not hesitate to raise rates again if oil prices continue to rise.

U.S. Interest Rates

*   Following the meeting, according to the CME FedWatch Tool: Market pricing for the probability of keeping rates unchanged in June stood at 99%, with a 1% 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

Kyle Rodda, an analyst at Capital.com, stated: "Market trading volume will be relatively thin due to public holidays, so we are at a crossroads, or at least waiting for the next catalyst that will cause a change in the market direction."

SPDR Fund

Gold holdings at the SPDR Gold Trust fell by 3.43 metric tons on Thursday, marking the seventh consecutive daily decline. The total dropped to 1,035.77 metric tons, the lowest level since October 16, 2025.

The Euro edged higher in the European market on Friday against a basket of global currencies, maintaining its gains for the second consecutive day against the U.S. dollar. This follows the European Central Bank’s monetary policy meeting, during which the bank warned of rising inflation risks stemming from the repercussions of the Iran war.

ECB President Christine Lagarde stated that the option of raising interest rates was discussed extensively, 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 less than 0.1% to ($1.1737), from an opening price of ($1.1731), after recording a session low of ($1.1725).

*   The Euro ended Thursday's trading up 0.45% against the dollar, marking its first gain in three days. This recovery followed a dip to a three-week low of 1.1655 dollars earlier in the session.

*   Throughout April, the Euro achieved a 1.55% gain against the dollar, its first monthly advance in three months. This rise was supported by temporary pauses in the Iran conflict and growing hopes for a permanent peace agreement in the Middle East.

The European Central Bank

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

In its policy statement, the ECB highlighted elevated inflation risks and an increasing likelihood of an economic slowdown. These pressures are attributed to high energy prices resulting from the war with Iran and ongoing tensions in the Strait of Hormuz.

The bank emphasized that it remains data-dependent and will decide on a meeting-by-meeting basis without committing to a specific rate path, standing ready to adjust all tools to ensure inflation stabilizes at the 2% medium-term target.

Christine Lagarde

ECB President Christine Lagarde stated on Thursday that the Governing Council reached a unanimous decision to hold rates, despite a lengthy discussion regarding the "option to hike." She indicated that June will be the "appropriate time" to reassess the direction of monetary policy.

European Interest Rates

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

*   To refine these expectations, investors are awaiting further Eurozone economic data concerning inflation, unemployment, and wage levels.