Silver prices fell in European trade on Monday, extending the losses for the second day and moving away from five-month highs on profit-taking.

The losses are stymied by positive Chinese data that renewed hopes of improving demand on commodities and metals, while the dollar dips against main rivals.

Prices

Silver prices fell 0.5% today to $33.65 an ounce, with a session-high at $33.90.

On Friday, silver lost 0.2%, the first loss in four sessions on profit-taking away from a five-month high $34.08.

Silver rose 4% last week, the second weekly profit in a row as the dollar dipped and the odds of a Fed rate cut in June rallied.

Chinese Data

Earlier Beijing data showed retail sales rose 4.0% in February, up from a 3.7% rise in January, and beating estimates of a 3.8% increase.

China’s industrial production rose 5.9% last month, beating estimates of a 5.3% rise.

Such data renewed hopes for an economic recovery in China, which would likely boost demand on metals in the world’s largest commodity consumer. 

The Dollar

The dollar index fell over 0.1% today against a basket of major rivals, underpinning gold prices.

Recent US data showed consumer confidence hit 2-⅕ year lows in March in a sign of increasing concerns about recession.

Gold prices rose in European trade on Monday, resuming gains and approaching a record high above $3000.

The gains are boosted by the US dollar’s weakness ahead of the Federal Reserve’s policy meeting this week to discuss economic developments and monetary policies.

Prices

Gold prices rose 0.35% to $2994 an ounce, with a session-low at $2982.

On Friday, gold prices lost 0.15%, the first loss in four days on profit-taking after hitting a record high at $3004.

Last week, gold rose 2.6%, the second weekly profit in a row and the largest this year on strong haven demand due to global trade concerns.

US Dollar

The dollar index fell over 0.1% today against a basket of major rivals, underpinning gold prices.

Recent US data showed consumer confidence hit 2-⅕ year lows in March in a sign of increasing concerns about recession.

Fed’s Meeting

The Federal Reserve is convening tomorrow and Wednesday to discuss policies, widely expected to maintain interest rates unchanged while providing clues on the path ahead for monetary policies.

Data released last week showed US consumer prices slowed down more than expected in February, bolstering the case for a Fed rate cut in the first half of the year.

According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in March stood at just 1%, while the odds of a May rate cut stood at 30%.

The odds of a Fed June 0.25% interest rate cut stood at 75%.

SPDR

Gold holdings at the SPDR Gold Trust rose by 0.6 tons on Friday to a total of 906.41 tons, the highest since February 25.

The euro rose in European trade on Monday against a basket of major rivals, extending gains for the second session against the dollar and approaching five-month highs after German coalition parties agreed on massive spending plans. 

The execution of Germany’s new stimulus plans will likely reduce the need for additional ECB interest rate cuts, as inflationary pressures are expected to mount in the eurozone. 

The Price

The EUR/USD pair rose 0.2% today to $1.0894, with a session-high at $1.0873.

On Friday, the pair rose 0.25%, resuming gains and approaching a five-month high at $1.0947.

The euro rose 0.4% last week, the second weekly profit in a row on German fiscal plans.

Germany’s Massive Stimulus

Upcoming German Chancellor Fredriech Mertz said he got decisive support from the Greens Party to massively increase government borrowing.

Germany’s coalition parties agreed previously on founding a 500 billion euro infrastructure fund and radically changing borrowing rules to boost investment into the military and growth.

As the German Parliament prepares to approve the new plan, it’s expected to drive inflation higher and in turn reduce the odds of an ECB interest rate cut in upcoming months.

Analysts expected a marked uptick in German economic growth if the economic reforms were executed, with some banks estimating German GDP to grow by 1.4% in both 2026 and 2027, up from 1.2% in previous forecasts.

However, the German and eurozone economies still face major risks as the US prepares to impose tariffs on European products soon, which will likely drag the euro down heavily against the greenback. 

ECB Rates

A Reuters report indicated that ECB policymakers see an increasing probability of holding rates unchanged at the next meeting. 

The markets now estimate only a 50% chance of an April ECB interest rate cut.

The Japanese yen fell in Asian trade on Monday against major rivals, moving in a negative zone for the second straight day against the dollar and approaching multi-week lows on speculation about the Bank of Japan’s policy meeting this week.

The BOJ is expected to maintain interest rates unchanged amid growing concerns about outside economic risks, with traders awaiting more clues on the path of policy tightening this year.

The Price

The USD/JPY rose 0.3% today to 149.06 yen per dollar, with a session-low at 148.46.

The yen fell 0.55% on Friday against the dollar, marking the third loss in four sessions on profit-taking away from a five-month high at 146.54.

The yen lost 0.4% last week against the dollar, marking  the second weekly loss in three weeks as US yields rebounded with haven demand on yen flattened. 

The BOJ

The Bank of Japan is convening this week to discuss monetary policies, expected to maintain interest rates unchanged at 0.5%, the highest since 2008.

BOJ policymakers will discuss the impact of the US trade war on Japan’s export based economy, which will determine the timing of the next interest rate hike.

Concerns about a global economic slowdown prompted by US President Trump’s tariffs could weigh on Japanese wages and consumer prices, which are approaching the 2% target.

BOJ Governor Kazuo Ueda stated ahead of the Diet last week that he expects a revival in consumption, but he remains very concerned about outside economic uncertainty. 

Reuters reported that BOJ policymakers believe the economy is on the right track but global economic uncertainties could impact the timing of the next BOJ rate hike.

US Yields

US 10-year treasury yields rose 0.25% on Monday, extending gains for the second session and expanding investments in the dollar.

It comes ahead of the Federal Reserve’s policy meeting this week, expected to maintain interest rates unchanged.