"The gold market is entering a challenging yet opportunity-filled phase as the global economic landscape gradually shifts from tightening to stabilization. After a sharp correction earlier this month, gold has regained the key psychological level of $4,100/oz, supported by the temporary weakness of the US dollar and growing expectations that the Federal Reserve (Fed) will maintain a steady monetary policy in the near term."
"However, the University of Michigan Consumer Sentiment Index has fallen close to record lows, reflecting households' caution toward spending and inflation prospects - reinforcing the view that the Fed is unlikely to keep interest rates elevated for too long. Recent economic data showed that US GDP for Q2 2025 grew by 3.8% SAAR (BEA), with the unemployment rate standing at around 4.3% (BLS, August)."
"The US dollar, often seen as both a barometer of US economic strength and a natural counterpart to gold, is now under corrective pressure as risk-on sentiment returns. Progress in budget negotiations in Washington has eased concerns about a potential government shutdown, reducing safe-haven demand for the dollar. Meanwhile, the 10-year US real yield (TIPS) has declined to around 1.83%, down from roughly 2.2% earlier in the quarter, indicating that future rate expectations are cooling."
Gold has regained the psychological $4,100/oz level after a sharp correction, supported by a temporarily weak US dollar and expectations of steady Federal Reserve policy. Consumer sentiment has dropped near record lows, signaling household caution on spending and inflation and reducing the likelihood of prolonged elevated interest rates. Q2 2025 US GDP grew 3.8% SAAR, unemployment is about 4.3%, and core PCE inflation is 2.9% YoY, with the Fed's SEP projecting 2.6% by year-end. Real 10-year yields have fallen to roughly 1.83% from about 2.2%, lowering the opportunity cost of holding gold and supporting a medium-term recovery as policy remains balanced.
Read at London Business News | Londonlovesbusiness.com
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