Gold prices fell in European trade on Wednesday on track for the second straight session, under pressure from the stronger US dollar before crucial US data.

Despite gold’s current decline, the precious metal is still heading for the fourth monthly profit in a row on haven demand amid the ongoing US-China trade war.

Prices

Gold prices fell 0.5% today to $3301 an ounce, with a session-high at $3328.

On Tuesday, gold lost 0.8%, the second loss in three days as the dollar rebounded and haven demand slumped.

Monthly Trades

In April, gold is up 5.5% so far this month on track for the fourth monthly profit in a row.

The precious metal hit a record high on April 22 at $3500 before entering a short-term correction.

The latest monthly profit is boosted by interest in haven demand as investors flee US assets.

Concerns grew after US President Donald Trump’s repeated attacks on Fed Chair Jerome Powell, sparking worries about the independence of the world’s largest central bank.

The Dollar

The dollar index rose 0.25% on Wednesday against a basket of major rivals, as concerns about a US recession receded with trade tensions calming down.

Trade Developments

US Treasury Secretary Scott Bessent said on Tuesday the administration is achieving a lot of progress in tariff negotiations, pointing to upcoming deals with India and South Korea, with talks ongoing with at least 17 trade partners. 

US Trade Secretary Howard Lutnick said the Trump administration already made a trade deal, with final approval awaiting in Japan before announcement. 

US President Trump also signed two executive orders to reduce the impact of auto tariffs through rebates and other measures.

US Rates

Several Fed officials don’t believe there’s an urgent need to review monetary policies soon.

According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May stood at just 8%.

The odds of such a cut in June stood at a healthier 65%.

SPDR

Gold holdings at the SPDR Gold Trust rose 0.86 tons yesterday to a total of 947.13 tons, away from April 9 lows.

The euro fell in European trade on Wednesday against a basket of major rivals, expanding the losses for the second straight session against the US dollar as concerns about a US recession faded with trade talks between Washington and its trade partners progressing. 

Despite the decline, the euro is still heading for the biggest monthly profit since 2022 due to a massive German stimulus plan, while Trump paused his aggressive tariffs on EU goods for 90 days.

Later today, important German inflation data will be released for April, which will provide important clues on the pace of inflationary pressures on European Central Bank policymakers.

The Price

The EUR/USD price fell 0.3% today to $1.1354, with a session-high at $1.1395.

The euro fell 0.3% on Tuesday, the second loss in three days as global trade negotiations progressed.

Monthly Trades

The euro is up 5% so far this month against the dollar, on track for the third monthly profit in a row, and the largest since November 2022.

This biggest monthly profit in three years comes after Germany announced a massive new stimulus plan, while the US paused its tariffs on the EU and engaged in negotiations.

Trade Developments

US Treasury Secretary Scott Bessent said on Tuesday the administration is achieving a lot of progress in tariff negotiations, pointing to upcoming deals with India and South Korea, with talks ongoing with at least 17 trade partners. 

US Trade Secretary Howard Lutnick said the Trump administration already made a trade deal, with final approval awaiting in Japan before announcement. 

US President Trump also signed two executive orders to reduce the impact of auto tariffs through rebates and other measures.

European Rates

Sources reported that some ECB officials see a high chance of a rate cut in June.

President of the Deutsche Bundesbank Joachim Nagel said that German recession this year can’t be ruled out.

European Central Bank President Christine Lagarde said the impact of tariffs could be seen on the PMI and unemployment numbers.

Lagarde expects the tariffs to have more of a deflationary role on prices rather than inflationary. 

Markets are currently pricing in a 60% chance of an ECB interest rate cut in June. 

Now traders await important German inflation data today, and eurozone inflation data tomorrow to gauge the likelihood of an ECB rat cut in May.

The Australian dollar rose in Asian trade on Wednesday against the US dollar after a short hiatus yesterday, with the pair heading towards four-month high and about to mark the second monthly profit in a row. 

Earlier Sydney data showed inflationary pressures remained persistent on monetary policymakers, casting doubts on the odds of an Australian interest rate cut in May.

The Price

The AUD/USD pair rose 0.35% today to 0.6407, with a session-low at 0.6379.

Aussie lost 0.75% on Tuesday against the greenback on profit-taking away from a four-month high at 64.50 cents.

Monthly Trades

Across April, the aussie is up 2.5% so far against the US dollar, on track for the second monthly profit in a row.

The gains are boosted by short-covering near five-year lows, while the risk appetite improved in the markets as global trade tensions receded.

Australian Inflation

Australia’s consumer prices rose 2.4% y/y in March, above estimates of 2.3%, and same as the previous reading in February.

On a quarterly basis, consumer prices rose 0.9% in the first quarter, up from 0.2 % in the fourth quarter of last year.

Australian Rates

The odds of a 0.25% interest rate cut in May by the Reserve Bank of Australia fell to 95%.

The RBA held interest rates steady at 4.1% earlier this month but said May provides a good opportunity to review monetary policies.

Australia’s consumer prices rose 2.4% y/y in March, above estimates of 2.3%, and same as the previous reading in February.