Gold prices rose more than 1% in European trading on Thursday, beginning a recovery from their lowest level of 2026 recorded earlier in Asian trading. Buying interest emerged at lower levels near the key $4,000-per-ounce mark, supported by a weaker US dollar and lower oil prices following a halt in military escalations between the United States and Iran, as hopes for a peace agreement to end the conflict in the Middle East resurfaced.

With markets continuing to price in elevated odds of a Federal Reserve interest rate hike in December, investors are awaiting additional key US economic data, particularly producer price figures due later today.

The Price

• Gold prices today: Gold gained 1.1% to $4,118.23 per ounce, up from an opening level of $4,072.07, after touching an intraday low of $4,023.86, its lowest level since November 2025.

• At Wednesday’s settlement, gold prices fell 4.5%, marking a fourth consecutive daily loss and the largest one-day decline since February 2, amid continued heavy selling across precious metals markets.

US dollar

The US Dollar Index fell 0.2% on Thursday, resuming losses that were temporarily paused on Wednesday and moving further away from two-month highs, reflecting weakness in the US currency against a basket of global peers.

The decline followed the conclusion of a new round of US strikes on Iran, which are being viewed as part of a pressure strategy aimed at encouraging Iranian authorities to make greater progress in ongoing peace negotiations, potentially paving the way for a final agreement that could reduce tensions and enhance stability across the Middle East.

Global oil prices

Global oil prices fell around 3%, heading toward fresh multi-week lows after the United States denied reports that the Strait of Hormuz had been closed to maritime traffic, easing concerns about disruptions to global energy supplies.

Developments in the Iran conflict

• The United States launched new airstrikes on Iran for a second consecutive day.

• Prior to the attacks, President Donald Trump said the United States would carry out a "very strong" strike against Iran.

• US Defense Secretary Pete Hegseth said Washington would target "vital facilities."

• The attacks represent one of the most serious escalations since the April ceasefire.

• Iran’s Revolutionary Guard said US military bases in Kuwait and Bahrain were targeted with drones and missiles.

• Tehran announced the complete closure of the Strait of Hormuz due to security concerns, while Washington denied that the strait had been closed.

• Diplomatic sources said US-Iran talks remain on track.

US interest rates

• Goldman Sachs expects the Federal Reserve to leave interest rates unchanged throughout 2026 and delay any rate cuts until 2027, citing stronger economic activity and job growth.

• Data released on Wednesday showed US consumer inflation rising at its fastest pace in three years during May, driven by higher energy prices amid the Middle East conflict.

• According to CME Group's FedWatch Tool, markets are currently pricing a 67% probability of a Federal Reserve rate hike at the December meeting.

• Markets also continue to price a 98% probability that rates will remain unchanged at the June meeting, while the odds of a 25-basis-point rate cut stand at 2%.

• Investors are now awaiting US producer price data for May later today, which could reshape interest rate expectations.

Gold outlook

Matt Simpson, senior analyst at StoneX, said that as prices approach the $4,000 level, it represents a clear support zone that could encourage sellers to take profits quickly or convince sidelined buyers to remain patient.

Simpson added that the US Dollar Index failed to post meaningful gains following Wednesday’s Consumer Price Index report. Therefore, unless producer price data delivers an unpleasant surprise, gold could experience a technical rebound in the near term.

SPDR Gold Trust

Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, declined by 2.86 metric tons on Wednesday, marking a second consecutive daily decrease. Total holdings fell to 1,013.64 metric tons, the lowest level since October 9, 2025.

The euro rose in European trading on Thursday against a basket of global currencies, moving into positive territory against the US dollar and heading toward its third gain in the last four sessions, ahead of the European Central Bank's policy decisions later today. The ECB is widely expected to announce its first interest rate increase since July 2023.

The US dollar weakened, while oil prices erased their gains after a new round of US strikes on Iran concluded and tensions in the Strait of Hormuz eased. Markets are now watching for any fresh developments in the ongoing peace negotiations between Washington and Tehran.

The Price

• Euro exchange rate today: The euro rose about 0.2% against the dollar to $1.1556, up from an opening level of $1.1535, after touching an intraday low of $1.1526.

• The euro ended Wednesday down 0.1% against the dollar, marking its first loss in the past three sessions after Donald Trump warned of potential new strikes against Iran.

US dollar

The US Dollar Index fell 0.2% on Thursday, resuming losses that were temporarily paused on Wednesday and moving further away from two-month highs, reflecting weakness in the US currency against a basket of major and minor peers.

The decline followed the conclusion of a new round of US strikes on Iran, which are being viewed as part of a pressure strategy aimed at encouraging Iranian authorities to make greater progress in ongoing peace negotiations, potentially paving the way for a final agreement that could reduce tensions and enhance stability across the Middle East.

Global oil prices

Global oil prices surrendered most of their early gains on Thursday after the United States denied reports that the Strait of Hormuz had been closed to shipping traffic, helping to ease concerns about disruptions to global energy supplies.

Developments in the Iran conflict

• The United States launched new airstrikes on Iran for a second consecutive day.

• Prior to the attack, President Donald Trump said the United States would carry out a "very strong" strike against Iran.

• US Defense Secretary Pete Hegseth said Washington would target "vital facilities."

• The attacks represent one of the most serious escalations since the April ceasefire.

• Iran’s Revolutionary Guard said US military bases in Kuwait and Bahrain were targeted with drones and missiles.

• Tehran announced the complete closure of the Strait of Hormuz due to security concerns, while Washington denied that the strait had been closed.

European Central Bank

Later today, the European Central Bank will conclude its fourth monetary policy meeting of 2026. Markets fully expect an interest rate increase, while the accompanying statement is expected to provide further guidance and clarification on the future path of rates throughout the year.

Current expectations point to a 25-basis-point rate hike, raising the ECB's key rate from 2.15% to 2.40%. It would mark the first interest rate increase in the eurozone since July 2023, following seven consecutive meetings in which rates were left unchanged.

The ECB's rate decision and monetary policy statement are due at 12:15 GMT, while ECB President Christine Lagarde is scheduled to hold a press conference at 12:45 GMT.

Outlook for the euro

At Economies.com, we expect that if the European Central Bank delivers more hawkish comments than markets currently anticipate, expectations for an additional rate increase later this year will rise, helping to extend the euro’s gains against a basket of global currencies.

The Japanese yen rose in Asian trading on Thursday against a basket of currencies, attempting to recover from a six-week low against the US dollar and heading toward its first gain in three days, supported by buying activity at lower levels.

The move comes amid growing expectations that the Bank of Japan could take steps to support the local currency, particularly as the yen continues to trade within the intervention zone closely monitored by Japanese monetary authorities.

The US dollar weakened, while oil prices surrendered their gains after a new round of US strikes on Iran concluded and tensions in the Strait of Hormuz eased. Markets are now watching for further developments in the ongoing peace negotiations between Washington and Tehran.

The Price

• Japanese yen exchange rate today: The dollar fell about 0.1% against the yen to ¥160.42, from an opening level of ¥160.54, after touching an intraday high of ¥160.56.

• The yen ended Wednesday down more than 0.1% against the dollar, marking its second consecutive daily loss and hitting a six-week low of ¥160.57.

The 160-yen threshold

Japanese authorities are closely monitoring movements in the currency market, particularly after the yen weakened beyond the key ¥160-per-dollar threshold, a level widely viewed as one that could trigger renewed intervention.

Sources told Reuters that Tokyo intervened several times in late April and early May to halt the yen’s decline. At that time, the currency had fallen to ¥160.72 per dollar, its weakest level since July 2024.

Japanese officials have warned against excessive currency volatility and indicated that authorities could take decisive action against disorderly movements in the foreign exchange market.

Finance Minister Satsuki Katayama said the government is "prepared to take appropriate action" if currency markets experience excessive or speculative moves.

Japanese interest rates

• Data released on Wednesday showed Japan’s producer prices accelerating to their highest level in three years as energy costs surged due to the Iran conflict.

• Following the data, market pricing for a quarter-point interest rate hike by the Bank of Japan at its June meeting increased from 75% to 95%.

• Investors are now awaiting additional data on inflation, unemployment, and wage growth in Japan to reassess those expectations.

• The Bank of Japan will meet on June 15-16 to evaluate the appropriate monetary policy tools for the world’s fourth-largest economy.

US dollar

The US Dollar Index fell more than 0.1% on Thursday, resuming losses that were temporarily paused on Wednesday and moving further away from two-month highs, reflecting weakness in the US currency against a basket of major and minor peers.

The decline followed the conclusion of a new round of US strikes on Iran, which are being viewed as part of a pressure strategy aimed at encouraging Iranian authorities to make greater progress in ongoing peace negotiations, potentially paving the way for a final agreement that could reduce tensions and improve stability across the Middle East.

Global oil prices

Global oil prices gave up most of their early gains on Thursday after the United States denied reports that the Strait of Hormuz had been closed to shipping traffic, helping to ease concerns about disruptions to global energy supplies.

Developments in the Iran conflict

• The United States launched new airstrikes on Iran for a second consecutive day.

• Prior to the attack, President Donald Trump said the United States would carry out a "very strong" strike against Iran.

• US Defense Secretary Pete Hegseth said Washington would target "vital facilities."

• The attacks represent one of the most serious escalations since the April ceasefire.

• Iran’s Revolutionary Guard said US military bases in Kuwait and Bahrain were targeted with drones and missiles.

• Tehran announced the complete closure of the Strait of Hormuz due to security concerns, while Washington denied that the strait had been closed.

The Canadian dollar rose modestly against its US counterpart on Wednesday after the Bank of Canada maintained a wait-and-see approach on interest rates, while investors continued to assess the future of the North American free trade agreement amid ongoing uncertainty.

The Canadian dollar, commonly known as the loonie, gained about 0.2% to C$1.3925 per US dollar after trading in a range between C$1.3900 and C$1.3957 during the session. It had touched a six-month low of C$1.3969 on Tuesday.

The Bank of Canada left its benchmark interest rate unchanged at 2.25% for a fifth consecutive meeting, citing limited evidence that higher energy prices are feeding into broader inflation across the economy.

Swap market data showed investors now expect only around 32 basis points of rate increases by December, down from 37 basis points before the central bank's decision.

Darcy Briggs, portfolio manager at Franklin Templeton Canada, said Canadian economic data "is not strong," giving the central bank room to remain on hold and monitor developments.

First-quarter GDP data had previously shown the Canadian economy slipping into a technical recession.

Briggs noted that Canada is facing three major pressures: higher energy prices, the repricing of a large number of mortgages at higher interest rates, and ongoing trade uncertainty.

In the same context, Donald Trump said on Wednesday that he may not renew the free trade agreement between the United States, Canada, and Mexico.

Global oil prices — one of Canada's key exports — also climbed about 2.5% to $93.78 per barrel following exchanges of strikes between the United States and Iran.

In the bond market, Canadian government bond yields were mixed, while the benchmark 10-year yield was little changed at 3.487%.