Gold prices declined in the European market on Friday, deepening losses for the second consecutive day and hitting their lowest level in nearly two weeks. The metal is on track for a weekly loss, pressured by a rising U.S. dollar and high oil prices as tensions escalate between the United States and Iran in the Strait of Hormuz, despite the extension of the ceasefire agreement.

Although gasoline prices in the U.S. are climbing and inflationary pressures are mounting on Federal Reserve policymakers, the probability of a U.S. interest rate hike this April remains very low.

Price Overview

- Gold Prices Today: Gold prices fell by 0.75% to ($4,659.09), the lowest since April 13, from an opening level of ($4,693.02), while recording a high of ($4,711.21).

- At the close of trading on Thursday, gold prices lost 1.0%, marking their third loss in the last four days due to the escalating political conflict between the U.S. and Iran.

Weekly Trading

Throughout this week's trading, which officially concludes with price settlements today, gold prices have fallen by approximately 3.75% so far. This puts the metal on the verge of incurring its first weekly loss in five weeks.

The U.S. Dollar

The dollar index rose by more than 0.1% on Friday, extending gains for the fourth consecutive session. A stronger American currency typically makes dollar-denominated gold less attractive to buyers holding other currencies.

This ascent comes as investors focus on the U.S. dollar as a safe haven, with the U.S. and Iran remaining at odds over the ceasefire, the blockade, nuclear issues, and control of the Strait. These disputes keep the strategic waterway effectively closed, threatening an energy sector shock that could damage global economies.

Analysis and Insights

Skye Masters, head of markets research at National Australia Bank, stated: "Despite Trump's extension of the ceasefire, tensions remain high with Iran's refusal to reopen the Strait of Hormuz and the continued U.S. naval blockade, increasing the risk of prolonged supply disruptions."

Masters added that extreme economic and trade risks are undervalued, and inflationary pressures are expected to persist until the end of the year.

Iranian War Updates

- Trump: Tehran wants to make a deal, but its leadership is in turmoil.

- Trump: We are in no rush for a deal, but if Iran does not want one, "I will end it militarily."

- Iranian President Masoud Pezeshkian described the U.S. blockade and threats as "main obstacles" to genuine negotiations.

- Pakistan continues its efforts to revive "peace talks" between the U.S. and Iran in Islamabad.

- Iran seized a new vessel in the Strait of Hormuz, challenging U.S. naval superiority.

Global Oil Prices

Global oil prices rose by an average of 0.75% on Friday, maintaining gains for the fifth consecutive day and trading near two-week highs. This follows mounting fears of energy supply disruptions from the Arabian Gulf as the Strait of Hormuz remains closed to oil tankers. The rise in global oil prices renews concerns over accelerating inflation, which could push central banks to raise interest rates in the near term.

U.S. Interest Rates

- Kevin Warsh, the nominee for a senior Federal Reserve role, stated on Tuesday that he has made no promises to Trump regarding interest rate cuts.

- According to the CME Group's FedWatch tool: the probability of keeping U.S. interest rates unchanged at the April meeting is currently stable at 99%, while the probability of a 25-basis-point hike stands at 1%.

Expectations for Gold Performance

Kelvin Wong, market analyst for Asia Pacific at OANDA, said: "As long as the risk of a prolonged closure of the Strait of Hormuz remains, oil will continue to trade at high levels, putting pressure on gold prices."

Wong added: "Gold remains trapped in a sideways range between the 50-day moving average at approximately $4,900 and a low at the 20-day moving average of $4,645. Breaking out of this range depends on developments in the Middle East."

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, decreased by approximately 1.72 metric tons on Thursday. This marks the second consecutive daily decline, bringing the total to 1,049.19 metric tons—the lowest level since April 13.

The Euro declined in the European market on Friday against a basket of global currencies, continuing its losses for the fourth consecutive day against the U.S. dollar. It is approaching its lowest level in nearly two weeks and is on track for its first weekly loss in a month as investors prioritize the American currency as the preferred alternative investment. This shift follows escalating tensions between the United States and Iran in the Strait of Hormuz, where both sides have exchanged control over vessels and tankers.

The current rise in global oil prices is increasing signs of growing inflationary pressures on European Central Bank (ECB) policymakers, reinforcing the probability of European interest rate hikes this year.

Price Overview

- Euro Exchange Rate Today: The Euro fell against the dollar by 0.1% to ($1.1672), from today’s opening price of ($1.1683), and recorded a high of ($1.1689).

- The Euro ended Thursday's trading down 0.2% against the dollar, marking its third consecutive daily loss. It touched a nearly two-week low of $1.1670 due to escalating geopolitical tensions in the Middle East.

Weekly Trading

Throughout this week's trading, which officially concludes with price settlements today, the Euro has fallen by approximately 0.8% against the U.S. dollar so far, positioned to incur its first weekly loss in a month.

The U.S. Dollar

The dollar index rose by more than 0.1% on Friday, extending gains for the fourth consecutive session and reflecting the continued ascent of the American currency.

This rise comes as investors focus on buying the U.S. dollar as a safe haven, as the United States and Iran remain at odds over the ceasefire, the blockade, nuclear issues, and control of the Strait. These disputes keep the strategic waterway effectively closed, threatening an energy sector shock that could harm global economies.

Skye Masters, head of markets research at National Australia Bank, noted: "Despite Trump's extension of the ceasefire, tensions remain high with Iran's refusal to reopen the Strait of Hormuz and the continued U.S. naval blockade, increasing the risk of prolonged supply disruptions."

Masters added that extreme economic and trade risks are undervalued, and inflationary pressures will persist until the end of the year.

Iranian War Updates

- Trump: Tehran wants to make a deal, but its leadership is in turmoil.

- Trump: We are in no rush for a deal, but if Iran does not want one, "I will end it militarily."

- Iranian President Masoud Pezeshkian described the U.S. blockade and threats as "main obstacles" to genuine negotiations.

- Pakistan continues its efforts to revive peace talks between the U.S. and Iran in Islamabad.

- Iran seized a new vessel in the Strait of Hormuz, challenging U.S. naval superiority.

Global Oil Prices

Global oil prices rose by more than 0.5% on Friday, maintaining gains for the fifth consecutive day and trading near two-week highs. This follows mounting fears of energy supply disruptions from the Arabian Gulf as the Strait of Hormuz remains closed to tankers. The rise in global oil prices renews concerns over accelerating inflation, which may push central banks to raise interest rates in the near term—a sharp shift from pre-war expectations of long-term rate holds or cuts.

European Interest Rates

- With the rise in global oil prices, money market pricing for the probability of the ECB raising European interest rates by 25 basis points in April increased from 20% to 30%.

- ECB President Christine Lagarde stated: The bank is prepared to raise interest rates even if the expected rise in inflation is short-term.

- Sources told Reuters that the ECB is likely to begin discussing interest rate hikes during its meeting this month.

The Japanese yen declined in the Asian market on Friday against a basket of major and minor currencies, continuing its losses for the fifth consecutive day against the U.S. dollar. Trading near a two-week low, the yen is on track for its first weekly loss in a month under the watchful eye of Japanese authorities, as the Finance Minister renewed warnings against speculation in the foreign exchange market.

Investors remain focused on purchasing the U.S. dollar as the preferred alternative investment amid escalating tensions between the United States and Iran in the Strait of Hormuz, where both sides have exchanged control over vessels and oil tankers.

Data released today in Tokyo showed a rise in Japan’s core inflation for March; however, this increase was not sufficient to boost the probability of the Bank of Japan (BoE) raising interest rates next week.

Price Overview

- Japanese Yen Exchange Rate Today: The dollar rose against the yen by approximately 0.15% to (159.84¥), from today’s opening price of (159.64¥), after recording a low of (159.60¥).

- The yen ended Thursday's trading down 0.15% against the dollar, marking its fourth consecutive daily loss due to escalating U.S.-Iran tensions.

Weekly Trading

Throughout this week's trading, which officially concludes with price settlements today, the Japanese yen has fallen by approximately 0.8% against the U.S. dollar so far, positioned to incur its first weekly loss in a month.

Japanese Authorities

Japanese Finance Minister Satsuki Katayama reaffirmed her verbal warning on Friday regarding exchange market intervention, noting that authorities are capable of taking "decisive" action to counter speculation. This followed her statement yesterday that Japan enjoys "full freedom" to intervene, asserting that previous interventions were effective.

As authorities continue to combat yen weakness, Akihiko Yoko, chief analyst at MUFG Bank, stated that it is difficult to imagine a scenario where the yen drops sharply below the 160 level against the dollar in the near term.

The U.S. Dollar

The dollar index rose by more than 0.1% on Friday, extending gains for the fourth consecutive session and reflecting the continued ascent of the American currency.

This rise comes as investors prioritize the U.S. dollar as a safe haven, given that the U.S. and Iran remain deadlocked over the ceasefire, the blockade, nuclear issues, and control of the Strait. These disputes keep the strategic waterway effectively closed, threatening an energy sector shock that could damage global economies.

Skye Masters, head of markets research at National Australia Bank, noted: "Despite Trump's extension of the ceasefire, tensions remain high with Iran's refusal to reopen the Strait of Hormuz and the continued U.S. naval blockade, increasing the risk of prolonged supply disruptions."

Iranian War Updates

- Trump: Tehran wants to make a deal, but its leadership is in turmoil.

- Trump: We are in no rush for a deal, but if Iran does not want one, "I will end it militarily."

- Iranian President Masoud Pezeshkian described the U.S. blockade and threats as "main obstacles" to genuine negotiations.

- Pakistan continues its efforts to revive peace talks between the U.S. and Iran in Islamabad.

- Iran seized a new vessel in the Strait of Hormuz, challenging U.S. naval superiority.

Global Oil Prices

Global oil prices rose by more than 0.5% on Friday, maintaining gains for the fifth consecutive day. Prices are trading near two-week highs due to mounting fears of energy supply disruptions as the Strait of Hormuz remains closed to tankers. The rise in oil prices renews concerns over accelerating inflation, which may push central banks to raise interest rates in the near term.

Core Inflation

Data released today in Tokyo showed Japan's Core Consumer Price Index (CPI) rose by 1.8% in March, higher than market expectations of 1.7% and up from 1.6% in February. These figures indicate growing inflationary pressures on BoJ policymakers, potentially increasing the chances of Japanese rate hikes later this year.

Japanese Interest Rates

- Reuters reported that the BoJ is likely to refrain from raising interest rates next week, as the fading prospects of a near-term end to the Middle East war keep economic and price outlooks highly uncertain.

- Governor Kazuo Ueda has recently refrained from pledging an April rate hike due to the war's impact on economic projections.

- Market pricing for a 25-basis-point hike in April remains stable at around 10%.

Expectations for Japanese Yen Performance

Suzuki from Matsui Securities stated that intervention by Japanese authorities is unlikely unless the dollar/yen exchange rate exceeds its April 2024 high of 161.95. He added that even if yen weakness accelerates after next week's BoJ meeting, the central bank will likely start with verbal statements before resorting to actual intervention.

Tom Leigh, Chairman of BitMine Immersion Technologies, stated that he believes the price of Ethereum could eventually reach $250,000.

Specifically, Leigh endorsed the $250,000 price target featured in a new report by the "Etherealize" platform. The report highlights that Ethereum’s staking feature provides a yield similar to interest earned from a bank account, giving the currency a distinct use case compared to its rival, Bitcoin. Furthermore, researchers argue that Ethereum's Proof-of-Stake (PoS) model could offer stronger long-term network security compared to Bitcoin's mining mechanism.

Tom Leigh described the Etherealize report as a "fresh and comprehensive vision for the future of Ethereum," supporting its argument that the digital currency could benefit from elements not available in gold or Bitcoin, such as the staking mechanism and the network’s extensive utility.

The report estimates a total addressable market opportunity for Ethereum of approximately $31.5 trillion. Based on a circulating supply of 121 million coins, this equates to a theoretical price of nearly $250,000 per unit.

However, the report noted that Leigh has a direct interest in supporting this outlook, as BitMine is considered the world's largest institutional holder of Ethereum. BitMine's stock (BMNR) has declined by 28% this year, currently trading at $22.59 per share.