Silver prices lost nearly 2% in the European market on Monday at the start of the week, retreating from a two-week high due to profit-taking and correction, amid slowing investment demand for safe-haven assets as optimism grew over the success of US–Russia talks to end the war in Ukraine.

The decline in silver prices came despite the US dollar’s weak performance in the foreign exchange market, under pressure from strong expectations of at least two US interest rate cuts before the end of this year.

Price Overview

• Today’s silver prices: Silver fell by about 2.0% to $37.61, down from the opening level of $38.36, after hitting an intraday high of $38.38.

• On Friday’s settlement, silver gained about 0.25%, marking its sixth consecutive daily rise, and reached a two-week high of $38.51 per ounce on Thursday.

• Last week, silver rose 3.6%, posting its first weekly gain in a month, supported by a weaker US dollar amid a series of weak economic data releases in the United States.

US–Russia Negotiations

As part of diplomatic efforts to end the war in Ukraine, US President Donald Trump announced on Friday that he will meet Russian President Vladimir Putin on August 15 in Alaska to discuss ways to reach a peace agreement to end the ongoing military conflict.

This move comes within a series of intensive US–Russia negotiations aimed at finding a final resolution to the crisis, amid international anticipation over the success of these efforts.

US Dollar

The US dollar index fell by more than 0.2% on Monday, nearing a two-week low of 97.95 points, reflecting a decline in the US currency’s value against a basket of major and minor counterparts.

Attention remained focused on trade talks as the August 12 deadline set by Trump to reach an agreement between the United States and China approached.

US Interest Rates

• According to the CME Group’s FedWatch Tool: the probability of a 25-basis-point rate cut at the September meeting is currently priced at around 88%, while the chance of no change is at 12%.

• The probability of a 25-basis-point rate cut at the October meeting is currently at 96%, with a 4% chance of no change.

• To reassess these expectations, investors this week are awaiting the release of key US inflation data, which, along with labor market figures, will guide the Federal Reserve’s monetary policy decisions.

The US dollar was largely steady on Monday, ahead of Tuesday’s deadline for Washington and Beijing to reach an agreement on tariffs, as markets also awaited a key US inflation report that could help determine whether the Federal Reserve will cut borrowing costs next month.

The dollar index edged down less than 0.1% to 98.164, after falling 0.4% last week. Against the yen, the US currency traded at 147.39 yen, down 0.2%. Japanese markets were closed on Monday for the “Mountain Day” holiday.

The euro rose less than 0.1% to $1.1652, while the British pound was flat at $1.3462.

The dollar remains under pressure as investors adjusted their expectations for Fed rate cuts following weak US jobs and manufacturing data.

Fed officials have expressed growing concern over the labor market, signaling openness to cutting rates as soon as September.

A slowdown in inflation could strengthen bets on a rate cut next month, but signs that President Donald Trump’s tariffs are fueling higher prices might prompt the Fed to keep policy unchanged for now.

Francesco Pesole, currency strategist at ING, said: “It’s important to note before tomorrow’s data that the threshold for a hawkish surprise is now higher,” adding that a 0.3% month-on-month increase in the core Consumer Price Index would still give the Fed room to cut rates, given the deterioration in the labor market.

Economists polled by Reuters expect the core CPI to have risen 0.3% in July, pushing the annual rate up to 3%.

Money markets are pricing in about a 90% chance of a rate cut next month, with a total of 58 basis points in cuts expected by year-end — implying two quarter-point moves — and roughly one-third odds of a third cut.

Potential changes in Fed leadership have also influenced the dollar recently, as Trump prepares to appoint policymakers aligned with his dovish stance, including a new Fed chair when Jerome Powell’s term ends in May.

Trade negotiations remained in focus, with the August 12 deadline set by Trump to reach a US–China deal approaching, particularly regarding chip policy.

Chris Weston, head of research at Pepperstone in Melbourne, said: “The market has fully priced in the likelihood of an extension,” predicting a new 90-day truce.

As part of efforts to reach an agreement and avoid imposing tariffs of several hundred percent on goods, a US official told Reuters that chipmakers Nvidia and AMD have agreed to allocate 15% of their China sales revenue to the US government in exchange for semiconductor export licenses.

Weston added: “I don’t know if that’s good or bad, but if it leads to a resolution, it wouldn’t be a bad outcome,” noting that “if it means Trump asks for 15% and then we close the matter, it might not be too bad.”

The offshore yuan fluctuated between gains and losses, last trading at 7.1854 per dollar, after weekend data showed China’s producer prices fell more than expected in July, while consumer prices remained unchanged.

The Australian dollar held at $0.6520 ahead of Tuesday’s central bank decision, where a 25-basis-point cut to 3.60% is widely expected after weaker-than-forecast second-quarter inflation and unemployment hitting its highest level in three and a half years.

Cryptocurrencies surged, with Bitcoin climbing to $122,308, nearing its July 14 record of $123,153.22, after Trump signed an executive order on Thursday allowing cryptocurrencies to be included in US retirement accounts.

Ethereum also jumped to $4,346, its highest level since December 2021.

Gold prices lost more than 1% in the European market on Monday at the start of the week, hitting their lowest level in about a week and moving away from a two-week high due to correction and profit-taking, alongside weaker demand for the precious metal as a safe haven amid intensive talks between the United States and Russia to end the war in Ukraine.

The decline in gold prices comes despite the US dollar falling to a two-week low, pressured by strong expectations that the Federal Reserve will cut interest rates at least twice before the end of this year.

To reprice those expectations, investors this week are awaiting the release of key US inflation data for July, which will show the extent to which higher tariffs have affected domestic prices.

Price Overview

• Gold prices today: Gold fell by about 1.2% to $3,357.06, the lowest since August 5, from the opening level of $3,398.13, with a high of $3,405.26.

• At Friday’s close, gold prices rose by less than 0.1%, marking a second consecutive daily gain, and reached a two-week high of $3,409.10 an ounce.

• Last week, gold prices rose by 1.0%, the second consecutive weekly gain, supported by a weaker US dollar amid a series of weak US economic data releases.

US–Russia Talks

As part of diplomatic efforts to end the war in Ukraine, US President Donald Trump announced on Friday that he will meet with Russian President Vladimir Putin on August 15 in Alaska to discuss ways to reach a peace agreement to end the ongoing military conflict in Ukraine. This step comes within a series of US–Russia talks aimed at finding a negotiated solution to the crisis, amid international anticipation over the success of these efforts.

US Dollar

The US dollar index fell by more than 0.2% on Monday, nearing a two-week low of 97.95 points, reflecting the dollar’s decline against a basket of major and minor currencies.

Attention was focused on trade talks as the August 12 deadline set by Trump to reach an agreement between the United States and China approached.

US Interest Rates

• According to CME Group’s FedWatch tool: The probability of a 25-basis-point US interest rate cut at the September meeting is currently priced at around 88%, with a 12% probability of no change.

• The probability of a 25-basis-point cut at the October meeting is currently priced at 96%, with a 4% probability of no change.

• To reprice these expectations, investors this week are awaiting key US inflation data, which, along with labor market figures, the Federal Reserve will use to shape its monetary policy tools.

Gold Outlook

• Matt Simpson, Senior Analyst at City Index, said: “The easing of geopolitical tensions surrounding the war in Ukraine has further pressured gold, following Friday’s announcement that President Donald Trump will meet Vladimir Putin on US soil.”

• Simpson added: “Positive data could further boost the US dollar and limit gold’s gains, although I expect overall support to remain as investors look to take advantage of the dips.”

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by about 0.55 metric tonnes on Friday, marking a second consecutive daily increase, to a total of 959.64 metric tonnes — the highest level since September 16, 2022.

The euro rose in the European market on Monday against a basket of global currencies, resuming gains that had temporarily paused on Friday against the US dollar, approaching again its highest level in two weeks, supported by the weak performance of the US currency in the foreign exchange market.

Expectations for a European interest rate cut in September have declined due to entrenched inflationary pressures currently facing European Central Bank policymakers, and to reprice these expectations, investors are awaiting the release of more economic data in the euro area.

Price Overview

• EUR/USD today: The euro rose against the dollar by 0.3% to (1.1675$) from the opening price of (1.1640$), recording the day’s low at (1.1640$).

• The euro ended Friday’s session down 0.2% against the dollar, its first loss in four days, due to correction and profit-taking from the two-week high of 1.1699$.

• Last week, the euro rose by about 0.5% against the dollar, marking its second weekly gain in the past three weeks, driven by a series of bleak US economic data, especially from the labor market.

US Dollar

The US Dollar Index fell by more than 0.2% on Monday, nearing a two-week low at 97.95 points, reflecting the decline in US currency levels against a basket of major and minor currencies.

Attention remained focused on trade talks as the August 12 deadline set by Trump for reaching an agreement between the US and China approached.

According to CME’s FedWatch Tool: market pricing for a 25 basis point US interest rate cut at the September meeting is currently stable at 88%, while pricing for keeping rates unchanged stands at 12%.

To reprice these expectations, investors this week are awaiting the release of key US inflation data for July, which will show the extent to which higher tariffs have impacted prices and how much inflationary pressure Federal Reserve policymakers are facing.

European Interest Rates

• The latest eurozone inflation data showed persistent inflationary pressures on European Central Bank policymakers.

• According to some Reuters sources, a clear majority in the ECB’s latest meeting favored keeping interest rates unchanged in September, for the second consecutive meeting.

• Money market pricing for the ECB cutting European interest rates by 25 basis points in September is currently stable below 30%.

• To reprice these expectations, investors in the coming period will monitor the release of numerous economic data in Europe, as well as comments from European Central Bank officials.