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Gold prices have extended their weekly gains to 3.5% and also a seventh successive green trading day. With bond yields rising and interest rate cuts coming, market participants are facing a host of uncertainties.

Add to the mix the renewed uncertainty around US tariffs with many of them ruled illegal by a Federal appeals court last Friday and market jitters are at a peak.

Rate Cut Expectations Continue to Rise

The current macro economic backdrop is a complicated one. Recent developments globally continue to point toward unfavorable scenarios from fiscal issues in Europe and Fed independence concerns in the US.

Since Fed Chair Powell's Jackson Hole speech, rate cut expectations have continued to rise. Fed Chair Powell de facto admitted that employment risks have overtaken inflation concerns underlining the importance of Friday's jobs data.

It would take an extraordinary print to dampen market expectations significantly with the Fed expected to cut rates by 25 bps at the upcoming September 17 Fed meeting. LSEG data currently shows a 95% probability while the implied rate has also seen potential rate cuts climb from around 40 bps to around 57 bps through December 2025.

Source: LSEG

Any decision by the Fed may also come with a bit of controversy. Given that inflation remains well above the Fed target of 2% (despite comments by some Fed policymakers of a higher neutral rate moving forward), the discussion will be around whether the decision has been influenced by US President Donald Trump and the Feds independence.

The constant attacks on the Fed by the Trump administration as well as the firing of Lisa Cook have raised many eyebrows.

Gold ETF Inflows Soar, Geopolitical Risks Rise

Market participants have been putting a lot of money into exchange-traded funds (ETFs) that are backed by gold. The SPDR Gold Trust GLD, which is the biggest gold ETF, reported that its gold holdings have gone up to 977.68 tons. This is a 12% increase for the year and the highest it's been since August 2022.

While another factor aiding Gold's surge is increasing Geopolitical risk. The Russia/Ukraine situation continues to bubble as European leaders maintain a combative approach and President Putin continues to blame the West for the conflict.

Comments this week from both Saudi sources and UAE sources around Israel and the occupation of Gaza City and potential annexation of the West Bank threaten further turmoil in the Middle East.

“Annexation in the West Bank would constitute a red line for the UAE,” Lana Nusseibeh, Assistant Minister for Political Affairs at the UAE’s foreign ministry, said in a statement. “It would severely undermine the vision and spirit of (the Abraham) Accords, end the pursuit of regional integration, and would alter the widely-shared consensus on what the trajectory of this conflict should be – two states living side by side in peace, prosperity, and security.”

These renewed risks are all adding to the current pot of risks which are brewing and keeping market participants on edge and safe haven flows strong.

How far can this rally go? Well the NFP will give us an answer. A poor NFP print could increase expectations for a 50 bps cut which, no matter how unlikely, could inject further fuel to the Gold rally.

A strong print will have an impact but unless it is something out of this world is unlikely to lead to a huge correction. The size and pace of the rally could see a surge in profit taking post NFP which should also be considered.

Technical Analysis - Gold (XAU/USD)

From a technical standpoint, it is very difficult to pick a top at the moment. Not to mention that the lack of historical price action makes it near impossible.

In such cases and for Gold I tend to focus on the whole numbers (psychological) and the 25, 50, 75 areas as potential support resistance areas. What I mean is I look at 35753550 or 3525 etc.

Looking ahead, the first point of interest will be the 3600 mark before the 3625 and 3650 areas catch my attention.

Looking at the downside, it's a similar story.

Gold (XAU/USD) Daily Chart, September 3, 2025

Source: TradingView (click to enlarge)

Dropping down to a one hour chart for any help identifying short-term support areas.

There was a spike and rejection twice around the 3546 area which rests just below an area I like which is 3550.

Below that we have the 3527 spot and then the 50-day MA may come into focus which rests at 3515.

Gold (XAU/USD) One-Hour Chart, September 3, 2025

Source: TradingView (click to enlarge)

Client Sentiment Data - XAU/USD

Looking at OANDA client sentiment data and market participants are Short on Gold with 69% of traders net-short. I prefer to take a contrarian view toward crowd sentiment and thus the fact that the majority of traders are net-short suggests that Gold prices could continue to rise in the near-term.

USDJPY, one of the most volatile FX pairs is still holding within a tight range as traders turn to metals with Gold making new all-time highs and Silver racing towards a fresh record.

FED's Waller appeared with comments this morning, foreshadowing a Rate cut at the upcoming 18th of September FOMC Meeting but the outlook for the pace of cuts is still uncertain.

As mentioned in our most recent USDJPY piece, the Bank of Japan would rather the Federal Reserve to move first to reduce the interest rate differential between the US and Japan which is detrimental to the Yen and hurting Japanese citizens' buying power.

As a matter of fact, BoJ Governor Ueda met Japan's Prime Minister Ishiba in a bi-annual meeting to discuss Japanese and global market outlooks.

With Yields rising strongly (Japan's 20Y and 30Y yields breaking 4 decade highs) while the BoJ tries to hold rates relatively low to stimulate inflation, challenges keep arising for the Yen.

Still holding the range strongly, players are looking to confirm the future outlook for the US Dollar which will decide in which direction the pair breaks out, and the answer will come after Friday's Job release.

USDJPY 8H Chart and technicals

USDJPY 8H Chart, September 3, 2025 – Source: TradingView

The traditionally volatile pair has been stuck in a 2,000 pip range since the beginning of August, with traders desperately awaiting for a clearer path ahead.

US Labor data and the uncertainty it's been holding is hurting trend traders but has helped participants who prefer rangebound conditions.

Friday's 8:30 Non-Farm Payrolls release will be more than consequential and has high probability of triggering a breakout.

For bulls, look for a break above above the range highs between 148.70 to 149.50 in the case of a strong Friday NFP release (a strong beat would reduce total rate cuts = bullish for the pair)

Bears would on the other hand seek for a break below the 146.00 to 146.50 range lows, supported by the 200-period Moving Average (currently at 145.52).

Today, the US Dollar is seeing some decent selling after this morning's miss in JOLTS job openings data which confirms the deceleration of the US Job market, the question for Friday is to what extent.

Technical levels for USDJPY trading

Resistance Levels

• 149.12 daily highs
• May range extremes from 148.70 to 149.50 (daily MA 200 in confluence)
• 150.00 to 150.90 July resistance

Support Levels

• Pivot at the 148.00 zone (acting as immediate support, 50H MA in confluence)
• 146.50 key support (200 MA in confluence)
• 145.00 psychological support

Safe Trades!

Platinum: ⬆️ Buy

• Platinum rising inside impulse wave 3
•  Likely to reach resistance level 1480.00

Platinum continues to rise inside the impulse wave 3, which started earlier from the support zone between the support level 1300.00 (which has been reversing the price from July), lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse form June.

The price earlier broke above the resistance level 1370.00 (which stopped waves 1 and i) – which accelerated the active impulse wave 3.

Given the sharp daily uptrend, Platinum can be expected to rise to the next resistance level 1480.00, target price for the completion of the active impulse wave 3.

Atlanta Fed President Raphael Bostic said today that "price stability remains the primary concern," after four years above target inflation, though a slowing labor market likely justifies one quarter-point rate cut this year.

Bostic warned that tariffs could add renewed price pressures, with firms unlikely to absorb higher import costs indefinitely. He said the full implications of trade policy shifts, federal deregulation, and tax changes remain unclear and could take months to filter through.

On employment, Bostic noted that hiring has slowed but so has labor supply growth, keeping the economy close to full employment. Bostic said, while "the labor market is slowing enough that some easing in policy - probably on the order of 25 basis points - will be appropriate over the remainder of this year."

Markets

Yesterday’s violent and unexpected selloff at the very long end of global yield curves saw no follow-up action today with the exception of Japanese markets which still had to react. The Japanese 30-yr yield closed 7.2 bps higher at 3.3%, at least the highest level since the late 1990s since when data are available. The EU 30-yr swap rate and US 30-yr bond yield bumped into key psychological levels at respectively 3% and 5%. The overall conditions resulted in a more constructive risk climate with European equity indices recovering 0.5%-0.75% and EUR/USD changing hands near 1.1650. The UK 30-yr yield set a minor new high (since 1998) at 5.75% before retreating. UK Chancellor Reeves today set the date for a major showdown with markets. She commissioned the Office for Budget Responsibility to prepare and economic and fiscal forecast to be presented to parliament alongside the Budget on November 26. In order to stick to her self-imposed fiscal buffer measure and keep a grip on day-to-day spending, guestimates suggest up to £50bn in higher taxes or spending cuts. EUR/GBP holds just below the 0.87 big figure with the YtD top at 0.8769 being the next technical reference. Apart from the fiscal side, we expect the UK currency to suffer from Great Brittain’s stagflation context even if this implies a relatively restrictive monetary policy by the Bank of England. Several BoE members testified in front of UK parliament today. BoE Lombardelli expects UK inflation at 3.5%-4% for the rest of the year with increased risks of even longer persistence. She’s not even confident that policy is currently “meaningfully restrictive” with limited room to neutral in comments that are more hawkish than those of her colleague BoE Taylor. BoE Greene is on the same page as Lombardelli, seeing signs of a slowing disinflation process while being less concerned about lower demand than before. UK money markets only attach a 40% probability of another BoE rate cut before year-end. That’s slightly more than in Europe (1/3). Most ECB governors are pretty happy with the current monetary policy stance and don’t see big threats that could destabilize the current inflation convergence to the 2% target. Slovenian central banker Dolenc this morning even suggested that the next move could go in either direction. German ECB board member Schnabel yesterday also indicated no reason for further rate cuts at present while reckoning that rate hikes globally may begin sooner than currently anticipated. The ECB meets next week. Apart from an unchanged rate decision, the central bank will update its June GDP and CPI projections, but the outlook shouldn’t change much. Before the summer break, the ECB penciled in an average growth path of 0.9%-1.1%-1.3% for the 2025-2027 time horizon with inflation expected at 2%-1.6%-2%.

News & Views

Turkish inflation came in at the high end of expectations in August. Monthly price rises amounted to a little over 2%, matching the pace in July. Consensus anticipated a slight deceleration to 1.75%. The year-on-year number printed at or close to 33% for both headline and core inflation. Among the biggest contributors is housing (adding 8.1 ppts to the annual figure), food & non-alcoholic beverages (8 ppts) and transport (4.1 ppts). Turkish inflation has come a long way from the 80%+ levels seen over the last couple of years during the post pandemic recovery. But it remains a long way from the central bank’s (CBRT) 5% target over the medium term. The CBRT in its third quarterly inflation report presented mid-August doesn’t assume to hit it before 2028 with the 2027 forecast still being 9%. The above-expectations inflation numbers come after solid growth (driven by private consumption) numbers earlier this week and limit the central bank’s (CBRT) scope to further cut rates after last month’s outsized 300 bps move (to 43%). The CBRT meets September 11. The Turkish lira trades stoic around record lows.

The head of the Peterson Institute for International Economics (PIIE), an influential think tank, Adam Posen warned for the risk of a politicized Fed unwilling to lend dollars to foreign central banks in times of crisis. Posen referred to the US president’s Trump frequent attacks directed at the Fed and its chair in particular. Crisis episodes typically trigger huge global dollar demand, forcing central banks to tap liquidity lines at the Fed. With the risk of this option no longer being available, central banks including the ECB should pool their dollar reserves in order to provide emergency liquidity to domestic banks if needed.

St. Louis Fed President Alberto Musalem said today that the current “modestly restrictive” policy rate is consistent with full employment and core inflation still nearly one percentage point above target.

He warned, however, that a variety of labor indicators—including upward moves in unemployment measures and downward revisions to jobs data—have increased the risk of a sharper slowdown ahead.

While the job markets in is full employment, he said, "I expect the labor market to gradually cool and remain near full employment with risks tilted to the downside." On the inflation outlook, Musalem argued that tariff-driven price pressures will be short-lived, fading over the next two to three quarters.

With growth running below trend and inflation expectations steady, he sees little chance of a lasting inflation shock. Still, he cautioned that there is a “reasonable possibility” that above-target inflation could persist longer than desired. He expects inflation to resume its convergence toward 2% in the second half of 2026.

"I will continue to update my outlook and my assessment of the balance of risks to seek a forward-looking path of interest rates that best positions monetary policy for achieving and maintaining maximum employment and price stability for all Americans," he said.

Fed Governor Christopher Waller said in an interview with CNBC that the central bank should begin cutting rates at its next meeting, noting that policymakers don’t need to follow a fixed sequence. He suggested that multiple cuts could come "over the next three to six months," depending on the economic data.

Waller acknowledged that tariffs could lift inflation temporarily, but he expects the effect to fade within six to seven months, allowing inflation to resume its path toward the Fed’s 2% target. Given the recent decline in labor demand, he argued it is appropriate to bring the policy rate—currently at 4.25%–4.50%—closer to the estimated neutral rate of 3%.

He also clarified that while he has spoken with Treasury Secretary Scott Bessent, he has not been interviewed for the Fed chair position and has no meetings scheduled. The Wall Street Journal reported that Bessent will begin interviewing candidates for the role on Friday, keeping leadership questions in the spotlight as policy debates intensify.

• Gold at record high: Gold surged to $3,549.66/oz, up 33% in 2025, as investors seek safe-haven assets amid global uncertainty.
• Fed policy drives momentum: Expectations of U.S. Federal Reserve rate cuts and political interference fears boost precious metals demand.
• Silver outshines gold: Silver breaks $40/oz for the first time since 2011, up 40% YTD, fueled by industrial demand and tight supply.

Gold Hits All-Time High Amid Flight to Safety

Gold prices reached a new all-time high of $3,549.66 per ounce, reflecting a broader trend of growing investor appetite for safe-haven assets amid worsening sentiment in global equity and bond markets, and rising political and economic uncertainty. In just the past seven trading sessions, gold has climbed by over 5%, and since the beginning of the year, the metal has gained more than 33%, making it one of the best-performing assets of 2025.

Daily chart of Gold, source: TradingView

Fed Rate Cut Expectations Fuel Momentum

The rally in gold is primarily driven by expectations of an upcoming rate-cutting cycle by the U.S. Federal Reserve, which enhances the attractiveness of non-yielding assets like gold. Investors are also reacting to growing concerns about the Fed’s independence — President Trump has reportedly considered removing one of the central bank’s board members, raising fears about the future direction of monetary policy. Additional uncertainty stems from fiscal instability in developed economies and ongoing geopolitical tensions, both of which are pushing capital toward precious metals.

Probabilities of changes to the Fed rate, as implied by 30-Day Fed Funds futures prices., source: CME FedWatch Tool

Silver Outpaces Gold on Industrial and Investment Demand

Silver has shown an even more impressive performance, breaking above $40 per ounce for the first time since 2011. Year-to-date, silver is up by approximately 40%, outperforming gold both in terms of return and demand dynamics. Beyond macroeconomic factors, silver is also benefiting from robust industrial demand, particularly in the green technology sector — including solar panels and other renewable energy components. The physical silver market is facing its fifth consecutive year of supply deficit, which is fueling investor interest in silver-backed ETFs. Shrinking inventories in London vaults and persistently high leasing costs (around 2%) point to tight physical availability of the metal.

In the near term, the precious metals market is expected to remain highly sensitive to political and macroeconomic developments. Investors are awaiting a ruling by the U.S. Supreme Court on the legality of removing a Fed board member, as well as the announcement of a new nominee for Fed Chair — Jerome Powell is set to step down in May 2026. Upcoming U.S. labor market data will also be crucial in shaping the Fed’s next monetary policy moves. Adding to the uncertainty is the ongoing trade dispute, with President Trump announcing plans to appeal a court decision that ruled parts of existing tariffs illegal — a move that could further escalate global trade tensions.

Daily chart of Silver, source: TradingView

Daily Pivots: (S1) 1.1655; (P) 1.1682; (R1) 1.1713; More...

Range trading continues in EUR/USD and outlook is unchanged. Intraday bias remains neutral and further rise is in favor as long as 1.1573 support holds. Corrective fall from 1.1829 should have completed with three waves down to 1.1390. On the upside, above 1.1741 will bring retest of 1.1829 high first. Firm break there will resume larger up trend. However, sustained break of 1.1573 will dampen this view, and indicate that corrective pattern from 1.1829 is extending with another falling leg towards 1.1390 again.

In the bigger picture, rise from 0.9534 (2022 low) long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.