Gold Approaching One-week Low
Gold prices () remained relatively unchanged on Thursday.
The Federal Reserve (Fed) held interest rates steady this week but projected two before the end of the year. However, Fed Chair Jerome Powell warned that inflation could be stubborn due to ongoing tariff tensions. The Fed’s latest projections also indicated slower economic growth, higher inflation, and weaker employment in 2025. Persistently high inflation may limit the central bank’s ability to ease monetary policy aggressively, which could reduce the appeal of non-yielding assets like gold.
Gold prices dropped during the Asian and early European trading sessions, marking the first weekly decline in three weeks. The downturn came as investors offloaded gold to cover losses in other markets amid intensifying geopolitical turmoil in the Middle East. Safe-haven demand appeared to weaken despite rising tensions due to liquidity concerns.
The conflict between Israel and Iran escalated further, with Israel intensifying strikes on strategic and government locations in Tehran. This followed reports of an Iranian missile strike hitting a major hospital in Israel. The geopolitical uncertainty deepened as attention turned to Washington, where US President Donald Trump was reportedly considering direct military intervention against Iran, with a final decision expected within two weeks. Key levels to watch for XAU/USD are support at $3,340 and resistance at $3,400.
Euro Awaits Trump’s Decision on Operation in Iran
The euro () grew slightly towards around 1.15000 on Thursday, supported by safe-haven demand amid escalating geopolitical tensions.
The ongoing conflict between Israel and Iran, coupled with the potential for direct US involvement, continued to drive risk aversion in global markets. Geopolitical turmoil prompted investors to favour the despite the minor pullback.
Meanwhile, the Federal Reserve (Fed) held interest rates steady earlier in the week and reiterated its data-driven stance amid rising geopolitical and economic risks. Fed Chair Jerome Powell warned that inflation could rise in the near term, fuelled partly by the inflationary impact of US President Donald Trump’s tariffs. The Fed also revised its economic forecast, projecting slower economic growth and affirming expectations for two 25-basis-point rate cuts in 2025. Investors now await key economic data, including the and the Conference Board’s leading indicators, for further clues on the US interest rate path.
EUR/USD rose during Asian and early European trading sessions. Today’s formal macroeconomic calendar is relatively uneventful, so volatility is likely to be low. Still, investors should closely monitor potential US involvement in the Middle East conflict. Reports suggest Trump has issued an ultimatum to Iran, offering a final opportunity to negotiate an end to its nuclear ambitions. While a decision on possible military strikes has been deferred for up to two weeks, the uncertainty surrounding the outcome has added to market volatility. Key levels to watch are support at 1.14500 and resistance at 1.15500.
Bitcoin Drops as Risk Appetite Weakens
(BTC) fell slightly on Thursday but remained within a narrow trading range, as speculation over potential US involvement in the Israel-Iran conflict kept investors cautious. Geopolitical uncertainty has dampened appetite for riskier assets, with traders remaining cautious amid fears of a broader regional escalation.
Adding to the cautious sentiment, the Federal Reserve (Fed) was relatively hawkish at its last monetary policy meeting. The central bank left interest rates unchanged and offered no clear commitment to easing in the near term. Moreover, it revised its outlook for 2026, now anticipating fewer rate cuts than previously expected. This further pressured riskier assets, including cryptocurrencies.
Fed Chair Jerome Powell also warned that US President Donald Trump’s proposed tariffs could increase inflation in the coming months. This inflationary risk reduces the likelihood of aggressive monetary easing, reinforcing a bearish tone across markets. As a result, broader risk-driven assets pulled back following Powell’s remarks. The crypto market, including Bitcoin, saw limited upside amid the heightened uncertainty.
BTC/USD continued to fall during the Asian and early European trading sessions. Today’s macroeconomic calendar is relatively uneventful, so traders should monitor potential US involvement in the Middle East conflict. Key levels to watch are support at $103,000 and resistance at $106,000.
