Gold prices rose in the European market on Friday, resuming gains that had temporarily paused yesterday, moving upward once again toward a three-week high, supported by the halt in the US dollar’s advance in the foreign exchange market.

Economic data released this week in the United States—the world’s largest economy—showed that the US economy remains on solid ground, despite Donald Trump’s trade war with several global economies, as markets await further updates on Washington’s negotiations with many of its trading partners.

The Price

• Gold prices today: Gold rose by 0.35% to ($3,350.45), from the opening level of ($3,339.23), recording a low of ($3,331.92).

• At Thursday’s settlement, gold prices lost 0.25%, as part of a correction and profit-taking move from a three-week high of $3,377.47 per ounce.

The US Dollar

The US Dollar Index fell on Friday by 0.25%, retreating from a three-week high of 98.95 points recorded yesterday, reflecting a pause in the dollar's rally against a basket of major and minor currencies.

Aside from profit-taking, the US dollar is declining as investors refrain from building new long positions, awaiting further updates on the trade negotiations Washington is conducting with several global partners.

US Interest Rates

• Data on Thursday showed US retail sales rebounded more than expected in June, while jobless claims last week fell to their lowest level in three months.

• Earlier in the week, a report showed that consumer prices rose by the most in four months in June, indicating that Donald Trump’s tariffs have started to impact inflation.

• Traders are currently pricing in about 45 basis points of US rate cuts for the remainder of the year, down from nearly 50 basis points at the start of the week.

• According to the CME Group’s FedWatch tool: the pricing of a 25 basis point rate cut at the July meeting is currently steady at 2%, while the probability of keeping rates unchanged is at 98%.

• The pricing of a 25 basis point rate cut at the September meeting is stable at 58%, with the probability of leaving rates unchanged at 42%.

Outlook on Gold Performance

• OANDA’s Asia-Pacific market analyst, Kelvin Wong, said: “We are beginning to see incoming data that still supports a somewhat resilient US economy, and market participants may still be looking at a scenario where the Federal Reserve isn’t expected to be overly dovish.”

• BMI analysts stated in a note: “We expect that interest rate cut announcements by the US Federal Reserve later in 2025 and 2026 will be the key to future gold price increases.”

SPDR Fund

Gold holdings at SPDR Gold Trust—the world’s largest gold-backed exchange-traded fund—fell yesterday by about 2.29 metric tons, bringing the total down to 948.50 metric tons, retreating from the 950.79 metric tons recorded as the highest level since June 30.

The euro rose with the opening of the European market on Friday against a basket of global currencies, in an attempt to recover from a three-week low against the US dollar. However, it remains on the verge of incurring a second consecutive weekly loss amid difficult trade negotiations between the European Union and the United States.

With growing doubts recently about the likelihood of a European interest rate cut at this month’s European Central Bank meeting—especially after key inflation data for June—investors are awaiting more important economic data from the eurozone.

The Price

• Euro exchange rate today: The euro rose against the dollar by 0.35% to ($1.1634), from today’s opening price of ($1.1595), recording a low of ($1.1591).

• The euro ended Thursday’s trading down by 0.4% against the dollar, marking its sixth daily loss in the past seven days, and recorded a three-week low at $1.1556 after strong economic data was released in the United States.

Weekly Trading

Over the course of this week’s trading, which officially ends at today’s price settlement, the euro—Europe’s single currency—is down so far by about 0.5% against the US dollar, on track to record a second straight weekly loss.

The US Dollar

The US currency is heading toward a second consecutive weekly gain against major currencies, supported by some strong US economic data that reinforced the view that the Federal Reserve can afford to wait longer before cutting interest rates again.

Thursday’s data showed US retail sales rebounded more than expected in June, while jobless claims fell last week to their lowest level in three months.

Earlier in the week, a report showed consumer prices rose by the most in four months in June, indicating that Donald Trump’s tariffs have begun to affect inflation.

Traders are currently pricing in about 45 basis points of US interest rate cuts for the remainder of the year, down from nearly 50 basis points at the start of the week.

Trade Negotiations

Trump has threatened to impose 30% tariffs on the European Union and Mexico—two of the United States’ largest trading partners—starting from August 1.

In a swift response, the European Union said it would extend its suspension of countermeasures to US tariffs until early August and would continue to push for a negotiated settlement.

European Interest Rates

• According to some Reuters sources, a clear majority at the latest European Central Bank meeting expressed a preference to keep interest rates unchanged in July, with some calling for a longer pause.

• Money market pricing for the likelihood that the European Central Bank will cut interest rates by about 25 basis points in July is currently steady around 30%.

• To reassess these expectations, investors will closely monitor upcoming economic data from Europe, as well as comments from European Central Bank officials.

The Japanese yen declined in the Asian market on Friday against a basket of major and minor currencies, continuing to move in negative territory for the second consecutive day against the US dollar, and is on the verge of incurring a second straight weekly loss, ahead of the House of Councillors elections in Japan during the weekend.

Data showed a slowdown in core inflation in Japan, which reduced inflationary pressures on monetary policymakers at the Bank of Japan, leading to a decline in the likelihood of a rate hike in July.

The Price

• The dollar rose against the yen by about 0.1% to (¥148.71), from today’s opening price of (¥148.60), recording a low of (¥148.30).

• The yen lost 0.5% against the dollar at Thursday’s settlement, resuming losses that had paused the previous day as part of a recovery from a three-month low of ¥149.19.

Weekly Trading

Over the course of this week’s trading, which officially concludes at today’s price settlement, the Japanese yen is down so far by about 0.85% against the US dollar, and is on track to record a second consecutive weekly loss.

Japanese Elections

On July 20, Japan will hold House of Councillors elections, where 124 out of 248 members will be elected for six-year terms. These elections are considered a key indicator of the ruling government's popularity.

This is especially significant after the October 2024 House of Representatives elections, in which the ruling coalition (the Liberal Democratic Party and Komeito) lost its majority, potentially affecting the dynamics of the upcoming elections.

The latest opinion polls in Japan showed that Prime Minister Shigeru Ishiba’s coalition is at risk of losing its majority in the House of Councillors.

Trade Negotiations

Japan’s chief trade negotiator, Ryusei Akazawa, held talks with US Trade Secretary Howard Lutnick on Thursday regarding tariffs, as Tokyo strives to avoid the imposition of a 25% tax unless an agreement is reached by the August 1 deadline.

Core Inflation

Data released today in Tokyo showed that Japan’s core Consumer Price Index rose by 3.3% in June, below market expectations of a 3.4% increase. The index had risen by 3.7% in June, the highest level since January 2023.

Undoubtedly, the slowdown in prices reduces inflationary pressures on monetary policymakers at the Bank of Japan, thereby diminishing the chances of interest rate hikes in the second half of this year.

Japanese Interest Rate

• Following the above data, the pricing of the likelihood that the Bank of Japan would raise interest rates by a quarter percentage point in the July meeting declined from 45% to 35%.

• To reassess those expectations, investors are awaiting the release of further data on inflation, unemployment, and wages in Japan.

Corn futures in Chicago recorded fresh contract lows again this week, while soybean prices edged closer to single digits, as forecasts continue to point to abundant U.S. crops.

December corn contracts remain slightly above last year’s levels, while November soybean contracts reached their lowest for this date in five years. However, when adjusted for inflation, current July averages for both corn and soybeans are at their lowest for any July since 2006.

This sharp decline comes as U.S. exporters struggle to maintain their global market share in grains and oilseeds—once considered strongholds—amid continued expansion of Brazilian production.

Low prices weigh on U.S. farmers

Low prices are particularly painful for U.S. farmers, as input costs remain relatively high. Corn prices have fallen by at least 30% since mid-2022, both in nominal and inflation-adjusted terms.

Yet the national average cost of producing corn has declined by only 3% this year compared to 2022, and by 11% after accounting for inflation.

In other words, today’s $4-per-bushel corn price does not carry the same value it once did, even though U.S. supply forecasts remain historically modest.

2006 Benchmark

So far in July, the average corn price for December contracts on the Chicago Board of Trade stands at $4.21 per bushel, while the average for November soybean contracts is $10.20.

This compares to full-month July 2024 averages of $4.12 for corn and $10.67 for soybeans.

U.S. data released Tuesday showed that the Consumer Price Index (CPI) rose by 2.7% year-over-year in June, pushing the inflation-adjusted average corn price for July 2024 to $4.23—roughly equal to the adjusted price of July 2020.

In nominal terms, corn prices have been lower in July on 11 occasions since 2006.

But after adjusting for inflation, the current $4.21 price is the lowest since 2006, when the inflation-adjusted price was $4.19—or $2.65 in nominal terms.

As for soybeans, there have been 9 Julys since 2006 where nominal prices were lower than the current average of $10.20.

Yet after adjusting for inflation, this is also the lowest since 2006, when the inflation-adjusted price was $9.74—or $6.15 in nominal terms.

Modest rebound… but still far from the peak

Despite a slight rebound in corn and soybean prices this week, they remain well below this year’s highs recorded in February, when U.S. crop insurance guarantees for the upcoming harvest season were set.

Still, the decline in prices since then is not exceptional—something that dampens enthusiasm for bullish investors. So far this month, December corn contracts are trading 10% below the February average, a smaller drop than in the previous two years.

November soybean contracts are down just 3% compared to February, even though larger declines were seen in four of the past seven years, including 2024.

Are supplies justifying the drop?

The U.S. Department of Agriculture (USDA) expects U.S. ending corn stocks for the 2025–2026 season to rise by 24% year-over-year.

This follows a projected 24% decline in 2024–2025, which ends on August 31.

A year ago, forecasts called for a 12% increase in 2024–2025—similar to the 18% forecast for 2020–2021.

Interestingly, inflation-adjusted corn prices in July 2020 and 2024 are very close to current levels, suggesting a logical relationship between supplies and prices.

But that argument weakens when considering actual volumes. The projected ending stocks for 2025–2026 stand at 1.66 billion bushels—21% and 37% lower, respectively, than the forecasts for 2024–2025 and 2020–2021 at the same point in the calendar.

Still, the market may be trading on the assumption of a final stock figure closer to 2 billion bushels, given the strong likelihood of improved yields—which supports the rationale for continued low prices.

Soybeans… potential support

The USDA estimates that U.S. soybean stocks for 2025–2026 will decline by 11% year-over-year—the first annual drop expected in July since 2020, when the figure was -32%.

In July 2019, the forecast was for a 24% drop. But the average inflation-adjusted soybean prices in July 2019 and 2020 were both above $11 per bushel, suggesting room for prices to rise this year—especially if August weather forecasts turn unfavorable.

Corn

As for trading, December corn futures settled down 0.8% at $4.21 per bushel.

Soybeans

November soybean futures rose 0.7% to $10.26 per bushel.

Wheat

September wheat futures closed down 1.3% at $5.33 per bushel.