Eurozone inflation soars to 3% as Iran war drives up energy prices

Eurozone inflation jumped to 3.0% in April from 2.6% in March, driven by a sharp acceleration in energy prices to +10.9% y/y as the Iran war lifted fuel costs. The print sits further above the ECB’s 2% target and lands just ahead of the central bank’s rate decision later today, keeping the policy backdrop tilted toward a more cautious easing path than markets had priced earlier this year. Growth also softened, with eurozone GDP expanding just 0.1% q/q in Q1 after 0.2% in Q4 2025. Germany modestly beat forecasts at +0.3% q/q, but France stagnated, with weaker household consumption and a negative trade contribution. ING’s Carsten Brzeski said the combination of Middle East conflict, higher energy prices, and weak structural growth does not support a clean recovery narrative. For precious metals, the macro mix is supportive for gold on the margin: higher energy-led inflation, weaker growth, and a geopolitical risk premium all reinforce safe-haven demand and complicate the ECB’s policy backdrop. Near term, traders will watch whether the ECB leans hawkish enough to dampen rate-cut expectations or whether the growth slowdown dominates; either way, the inflation impulse from energy keeps real-rate and policy-risk support in play for bullion.