Gold prices rose in European trading on Friday, attempting to recover from a six-week low amid bargain hunting. Despite this rebound, the precious metal remains on track to post its largest weekly loss since 2020.

This sharp weekly decline— the steepest in six years—comes under pressure from a stronger US dollar and the Federal Reserve’s hawkish stance, which has significantly reduced expectations for near-term rate cuts.

Price action

Spot gold climbed 1.85% to $4,735.85, up from an opening level of $4,649.89, after hitting an intraday low of $4,634.43.

On Thursday, gold dropped 3.5%, marking its second consecutive daily loss and falling to a six-week low of $4,502.81 per ounce, amid rising global inflation concerns.

Weekly performance

So far this week, gold is down more than 6.0%, heading for a third consecutive weekly loss and its biggest weekly decline since March 2020.

US dollar

The US Dollar Index hit a 10-month high earlier this week, supported by strong demand for the greenback as a safe-haven asset amid escalating military tensions in the Middle East.

Federal Reserve

In line with expectations, the Federal Reserve kept interest rates unchanged on Wednesday for the second consecutive meeting.

The Federal Open Market Committee voted 11–1 to maintain the benchmark rate within a range of 3.50%–3.75%, the lowest level since September 2022.

The Fed’s policy statement noted that the economic impact of the war with Iran remains uncertain, but is likely to push inflation higher in the short term due to the energy price shock.

The central bank raised its inflation projections for 2026 and 2027, while keeping its rate outlook for this year broadly unchanged at around 3.50%, signaling expectations for just one rate cut later in the year.

Fed Chair Jerome Powell said short-term inflation expectations have risen in recent weeks due to developments in the Middle East.

He added that while progress on inflation is expected, it may fall short of desired levels, warning that without clear improvement, rate cuts are unlikely.

Powell also indicated that a rate hike remains a possible next move.

US rate outlook

Following the meeting, CME FedWatch data showed that the probability of holding rates unchanged in April fell from 99% to 95%, while expectations for a 25 basis point rate hike increased from 1% to 5%.

Gold outlook

Nicholas Frappell, Global Head of Markets at ABC Refinery, said gold has held some key technical support levels on the weekly timeframe and could rebound toward the $4,800 level.

He added that after gold’s notably weak performance during the Middle East conflict, market participants have been more inclined to sell rallies rather than buy dips, waiting for confirmation of their bearish bias.

SPDR Gold Trust

Holdings in SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 4.86 metric tons on Thursday, marking the sixth consecutive daily decline, bringing total holdings down to 1,062.13 metric tons—the lowest level since December 17.

The euro declined in European trading on Friday against a basket of major currencies, retreating from a one-week high versus the US dollar as part of a correction and profit-taking phase, following its strongest daily gain in two months. Despite the pullback, the single currency remains on track for a weekly gain, supported by the European Central Bank’s hawkish policy stance.

The US dollar has weakened this week from its highest levels in 10 months, as rising energy prices have reshaped global interest rate expectations, with the Federal Reserve remaining the only major central bank not expected to raise rates this year.

Price action

The euro fell 0.3% against the dollar to 1.1553, down from an opening level of 1.1588, after hitting an intraday high of 1.1595.

On Thursday, the euro closed up 1.2% versus the dollar, marking its third gain in four sessions and its strongest daily performance since January 27, driven by the ECB meeting.

Weekly performance

So far this week, the euro is up 1.25% against the US dollar, on track to post its first weekly gain in three weeks.

European Central Bank

As expected, the European Central Bank kept its key interest rates unchanged on Thursday at 2.15%, the lowest level since October 2022, marking the sixth consecutive meeting without a change.

The ECB reiterated its data-dependent approach, emphasizing a meeting-by-meeting strategy without committing to a fixed rate path, while remaining ready to adjust all tools to ensure inflation returns to its 2% medium-term target.

Christine Lagarde

ECB President Christine Lagarde warned on Thursday that the military conflict is “casting a shadow” over growth and inflation prospects and will have a “material” and direct impact on prices in the near term.

She added that the external environment remains “highly challenging,” pointing to ongoing volatility in global trade policies.

European rates outlook

Sources told Reuters that the ECB is likely to begin discussing rate hikes as early as next month.

Following the meeting, money markets increased pricing for a 25 basis point rate hike in April from 1% to 25%.

Investors are now awaiting further economic data from the eurozone, particularly on inflation, employment, and wages, to reassess these expectations.

US dollar

The US Dollar Index rose 0.3% on Friday, rebounding from a one-week low as selling pressure on the currency eased.

The dollar had come under broad pressure on Thursday following policy meetings by central banks in Japan, Switzerland, the UK, and the eurozone, where policymakers signaled a potential shift toward tighter monetary policy in response to the Middle East conflict and its impact on energy supplies.

Analysis

Analysts at JPMorgan noted that while the Federal Reserve appears willing to remain patient in the face of a shock that presents dual risks to its mandate, the ECB seems unusually sensitive.

They added that there is a clear bias toward rate hikes this year, even if the timing and pace remain uncertain.

US stocks closed lower on Thursday, weighed down by declines in shares of companies such as Micron Technology and Tesla, amid concerns that rising oil prices could fuel inflation and limit the likelihood of future interest rate cuts.

Investors focused on warnings from Federal Reserve Chair Jerome Powell on Wednesday, who indicated that the economic outlook remains uncertain in light of the US–Israel war with Iran, which has driven energy prices higher and intensified inflationary pressures. The Fed kept interest rates unchanged, as widely expected.

Interest rate futures showed that traders do not anticipate any rate cuts before mid-2027, according to the CME FedWatch Tool.

Other central banks followed a similar path, with both the European Central Bank and the Bank of England holding rates steady, citing ongoing uncertainty tied to the Middle East conflict.

Mike Dickson, Head of Research and Quantitative Strategies at Horizon Investments, said the market is digesting Powell’s remarks along with signals from other central banks highlighting real inflation risks.

Stock performance

The S&P 500 fell 0.27% to close at 6,606.49 points, while the Nasdaq declined 0.28% to 22,090.69 points. The Dow Jones Industrial Average dropped 0.44% to finish at 46,021.43 points.

Eight of the eleven sectors within the S&P 500 ended in negative territory, led by the materials sector, which fell 1.55%, followed by consumer discretionary, down 0.87%.

All three major indices closed below their 200-day moving averages, reflecting weakening market momentum. The S&P 500 has lost more than 3% since the start of 2026, trading near its lowest levels in four months.

Oil and geopolitical impact

Oil prices pulled back from intraday highs, after Brent crude briefly touched $119 per barrel before retreating amid government efforts to boost supply. The moves followed Iranian strikes targeting energy infrastructure in the Middle East.

Market sentiment remained closely tied to developments in the conflict, as investors view higher energy prices as a key driver of inflation and a constraint on monetary easing.

Notable stock moves

Nvidia shares fell 1%, while precious metals companies such as Newmont and Freeport-McMoRan dropped 6.9% and 3.3%, respectively.

Tesla declined 3.2% after US regulators expanded an investigation into approximately 3.2 million vehicles equipped with its Full Self-Driving system, citing concerns over the system’s ability to detect hazards in low-visibility conditions.

Labor market data

Data released Thursday showed initial jobless claims declined unexpectedly, signaling labor market resilience and a potential pickup in hiring momentum in March.

Market breadth

Declining stocks outnumbered advancers within the S&P 500 by a ratio of 1.4 to 1, with 17 new highs and 26 new lows recorded. On the Nasdaq, 30 stocks hit new highs compared to 276 new lows.

Trading volume on US exchanges reached approximately 20 billion shares, in line with the average over the past 20 sessions.

Ripple extended its losses for a third consecutive session, trading near $1.46, down more than 9% from its weekly peak of $1.61, as market sentiment deteriorated following remarks by Federal Reserve Chair Jerome Powell, which dampened expectations for near-term rate cuts.

Selling pressure amid weakening demand

The token is facing increasing pressure as retail interest declines, with open interest in derivatives markets falling to $2.67 billion from $2.79 billion in the previous session, signaling reduced activity in futures trading.

Previously, a rise in open interest from $2.11 billion — the lowest level in March — to $2.87 billion on Tuesday coincided with the rally toward $1.61, highlighting the importance of liquidity flows in supporting prices.

On the institutional side, appetite remains weak. Data from US-based Ripple ETFs showed zero net inflows, with total cumulative inflows holding steady at $1.21 billion, while assets under management stood at approximately $1.02 billion.

These funds also recorded net outflows of $1.34 million since the beginning of the week, reflecting declining institutional interest.

Technical outlook: risks of deeper downside

From a technical perspective, Ripple continues to trade within a bearish bias, remaining below its key moving averages. The 50-day EMA stands near $1.51, the 100-day at $1.69, and the 200-day at $1.94, reinforcing the medium-term downward trend.

The MACD indicator signals fading bullish momentum despite remaining above the signal line, while the Relative Strength Index (RSI) hovers around 52 in neutral territory, suggesting an ongoing correction without confirmation of a trend reversal.

The token also remains below a long-term descending trendline, indicating that current price action is part of a corrective phase rather than the start of a new uptrend.

In terms of key levels, initial support is seen at $1.45, with a break potentially opening the door toward $1.40. On the upside, resistance stands at $1.50, followed by $1.61, which marks the recent peak that capped the previous rally.