📊 Dovish rhetoric puts downward pressure on gold

Gold prices (XAU) fell towards $3,370 on Wednesday after Federal Reserve (Fed) Chairman Jerome Powell made dovish statements.

👉 Possible effects for traders
As expected, the Federal Open Market Committee (FOMC) left the benchmark fed funds rate unchanged at 4.25–4.5% while acknowledging that economic uncertainty has somewhat eased but remains elevated. Notably, the committee dropped previous remarks of a rising risk of both higher unemployment and inflation, signalling a more balanced, though still cautious, policy stance. The Fed Chair warned that inflation is expected to rise significantly in the coming months, largely due to the recent increases in trade tariffs. He noted trade tariffs could have more persistent effects on price levels than previously anticipated.

In its updated projections, the FOMC revised its 2025 U.S. GDP growth estimate towards 1.4%, from 1.7% in March, reflecting growing concerns about economic momentum. At the same time, the central bank raised its 2025 core inflation forecast towards 3.1% from 2.8%, underlining the impact of external cost pressures, including trade-related factors. The Fed's dot plot maintained its outlook for two rate cuts by the end of 2025, with a median fed funds rate projection of 3.875%. While the Fed remains open to easing, it proceeds cautiously in the face of evolving inflation dynamics.

XAUUSD continued to fall during Asian and early European trading sessions. Today's macroeconomic calendar is rather uneventful, but traders should monitor any developments around trade tariffs. Key levels to watch for XAUUSD are support at $3,360 and resistance at $3,400.

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📊 Gold approaching one-week low

Gold prices (XAU) remained relatively unchanged on Thursday.

👉 Possible effects for traders
The Federal Reserve (Fed) held interest rates steady this week but projected two rate cuts 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 U.S. President Donald Trump was reportedly considering direct military intervention against Iran, with a final decision expected within two weeks. Key levels to watch for XAUUSD are support at $3,340 and resistance at $3,400.

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📊 Euro awaits Trump's decision on operation in Iran

The euro (EUR) grew slightly towards around 1.15000 on Thursday, supported by safe-haven demand amid escalating geopolitical tensions.

👉 Possible effects for traders
The ongoing conflict between Israel and Iran, coupled with the potential for direct U.S. involvement, continued to drive risk aversion in global markets. Geopolitical turmoil prompted investors to favour the U.S. dollar 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 U.S. 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 Philadelphia Fed manufacturing survey and the Conference Board's leading indicators, for further clues on the U.S. interest rate path.

EURUSD 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 U.S. 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.

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📊 Bitcoin drops as risk appetite weakens

Bitcoin (BTC) fell slightly on Thursday but remained within a narrow trading range, as speculation over potential U.S. 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.

👉 Possible effects for traders
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 U.S. 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.

BTCUSD continued to fall during the Asian and early European trading sessions. Today's macroeconomic calendar is relatively uneventful, so traders should monitor potential U.S. involvement in the Middle East conflict. Key levels to watch are support at $103,000 and resistance at $106,000.

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📊 GBP rises on expectations of Fed rate cut and Middle East de-escalation

The British pound (GBP) rose towards 1.35200 on Monday following the de-escalation of the Middle East conflict.

👉 Possible effects for traders

S&P Global’s flash composite PMI for June edged up to 50.7, slightly above expectations and signaling marginal expansion in private sector activity. The manufacturing sector continued to contract but at a slower pace than forecast, while services activity aligned with analyst estimates. While this data provided a modest cushion for the pound, it was insufficient to counteract the broader risk-off sentiment dominating global markets.

U.K. business activity expanded modestly in June, supported by a rise in new orders—the first increase this year—although the broader outlook remained cautious, with employers accelerating job cuts and voicing concern over geopolitical risks. S&P Global's flash composite Purchasing Managers' Index (PMI) for June edged up towards 50.7, slightly above expectations and signalling marginal expansion in private sector activity. The manufacturing sector continued to contract but slower than expected, with services activity matching analyst estimates. The data offered modest support for the pound.

Still, last week's unexpectedly dovish stance from the Bank of England (BoE) added pressure on GBP. The central bank left rates unchanged, but the internal vote revealed a deeper split than markets anticipated. Three of the nine members of the Monetary Policy Committee favoured an immediate rate cut. The BoE underscored ongoing inflation concerns and highlighted 'two-sided risks', noting that inflation is likely to remain elevated well into 2025. This cautious tone prompted markets to reassess the likelihood of future rate cuts, putting pressure on the pound.

GBPUSD slightly rose during the Asian and early European trading sessions. Investor attention is now on Federal Reserve Chair Jerome Powell's upcoming testimony before the U.S. Congress on Tuesday and Wednesday. Markets will be looking for signals on the Fed's policy trajectory amid mixed economic data. Market expectations for a July rate cut have increased, with the CME FedWatch Tool now indicating a 20% probability of a rate cut, up from 14.5% just a day earlier.

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📊 Euro rises on expectations of dovish Fed rhetoric

The euro (EUR) gained 0.49% against the U.S. dollar (USD) on Monday. EURUSD rose after dovish remarks from Federal Reserve (Fed) Governor Michelle Bowman, who suggested that the central bank may soon need to consider interest rate cuts.

👉 Possible effects for traders

Bowman's shift in tone was particularly notable, given her traditionally hawkish stance on monetary policy. She highlighted concerns over a weakening labour market and appeared less concerned about inflationary pressures from trade tariffs, signalling a potential pivot towards policy easing. Her comments sparked a sell-off in the U.S. dollar (USD), as markets interpreted them as a strong indication that rate cuts could happen sooner than expected. Helen Given, Director of Trading at Monex USA, emphasised the impact of Bowman's comments, noting that her hawkish reputation made the dovish shift especially impactful. 'Any indication that she's leaning toward rate cuts is enough to put downward pressure on the dollar', Given said. Broader geopolitical relief also supported the rise of the euro. Investors expect Iran's response to recent U.S. strikes on its nuclear infrastructure to be measured and contained, further diminishing safe-haven demand for the U.S. dollar.

Meanwhile, eurozone economic data added another layer of complexity to the global monetary outlook. Flash Purchasing Managers' Index (PMI) data indicated a steeper-than-expected contraction in private sector activity. This reinforced expectations that the European Central Bank will implement a 25-basis-point rate cut in September, potentially lowering the deposit rate to around 1.75%. Despite the eurozone's soft data, the dovish shift in the Fed's rhetoric provided enough contrast to keep the U.S. dollar under pressure in Monday's trading session.

EURUSD continued rising during the Asian and early European trading sessions. Today, investors should focus on Fed Chair Jerome Powell's speech at 5:00 p.m. UTC. Traders are speculating whether he will adopt an unexpectedly dovish stance or maintain a more neutral, balanced approach. Key levels to watch are resistance at 1.16300 and support at 1.14500.

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📊 Gold declines as Middle East conflict de-escalates

Gold prices (XAU) fell towards $3,350 on Tuesday, pressured by easing geopolitical tensions in the Middle East.

👉 Possible effects for traders

The precious metal, typically seen as a safe-haven asset during geopolitical uncertainty, lost some appeal following the announcement of a ceasefire between Israel and Iran. The resolution significantly reduced immediate risk premiums priced into the market, prompting investors to return to riskier assets.

The de-escalation followed late Monday remarks from U.S. President Donald Trump, who confirmed that Iran had agreed to an immediate ceasefire, with Israel expected to follow 12 hours later. The agreement came after Iran launched a symbolic retaliatory strike on a U.S. base in Qatar, which resulted in no casualties. Markets interpreted the limited scope of the response and the swift move toward de-escalation as a sign that both sides were aiming to avoid a broader confrontation.

XAUUSD continued falling during the Asian and early European trading sessions. Market participants are now shifting focus to monetary policy developments, particularly the upcoming testimony by Federal Reserve (Fed) Chair Jerome Powell before Congress. Powell's testimony on Tuesday and Wednesday is expected to provide further clarity on the Fed's policy stance amid persistent inflation concerns and mixed economic data. Any hints of rate cuts or shifts in policy trajectory could further influence the direction of gold prices. Key levels to watch are support at $3,340 and resistance at $3,400.

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📊 USDJPY declines after BoJ's hawkish rhetoric

USDJPY declined towards 145.000 on Tuesday, hovering near a one-week low as markets reacted to the Bank of Japan's (BoJ) latest Summary of Opinions.

👉 Possible effects for traders

Despite ongoing global uncertainties—such as persistent trade tensions and geopolitical risks—the BoJ signalled a cautious but potentially hawkish tilt. One policymaker suggested the possibility of 'decisive' rate hikes if inflation and growth align with projections. However, the broader consensus within the central bank emphasised patience, with officials reiterating that any policy tightening would depend on the economy sustainably meeting the BoJ's targets.

Policymakers highlighted ongoing uncertainty in the global outlook, particularly amid tensions surrounding U.S. trade policy. Several members advocated for maintaining accommodative conditions in the near term, citing fragile external demand and volatile commodity markets. While the hawkish remarks caught market attention, the BoJ's overall tone remained balanced, reinforcing the view that any shift in rates will be gradual and data-dependent.

On the trade front, Japanese negotiator Ryosei Akazawa is reportedly planning his seventh visit to Washington later this month as Tokyo seeks the removal of U.S. tariffs. Meanwhile, the U.S.-brokered ceasefire between Israel and Iran largely held despite sporadic incidents. However, new intelligence reports suggest that recent U.S. missile strikes caused only limited damage to Iran's nuclear facilities, indicating that regional risks remain elevated. These developments continue to complicate Japan's policy outlook, which must balance domestic recovery against external fragility.

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