Gold prices edged lower on Friday, retreating slightly from their strongest level in more than a month as traders locked in profits and repositioned ahead of the release of critical U.S. inflation data. Despite the modest decline, the yellow metal remains firmly within a bullish trend, supported by softer dollar expectations, policy uncertainty, and enduring geopolitical risks.

In the European session, spot gold was last seen trading near $3,407 per ounce, down around 0.30% on the day. The pullback followed a rally to levels not seen since July 23 during Thursday’s session, when investors pushed the precious metal higher on expectations that the Federal Reserve is drawing closer to cutting interest rates as soon as September. Month-end profit-taking has since weighed on sentiment, though the broader uptrend remains intact.

The main driver of caution in Friday’s trade is anticipation of the U.S. Bureau of Economic Analysis report on the core Personal Consumption Expenditures Price Index, the Fed’s preferred measure of inflation. The July release is expected to show a 0.3% monthly rise, matching June’s pace, while the annual rate is projected to inch higher to 2.9% from 2.8% previously. Traders are bracing for a potentially market-moving outcome. A weaker-than-expected reading would likely reinforce expectations for a September rate cut, providing fresh support to gold. By contrast, a stronger number could temper dovish speculation, boost Treasury yields, and offer the U.S. dollar a renewed lift, thereby applying downward pressure on bullion.

Market strategists have warned that Friday’s PCE release could trigger sharp, immediate swings in gold prices. A London-based metals strategist noted that while a higher-than-expected print could send gold lower in the short run, the broader trend remains intact because of the Fed’s shifting stance and the ongoing demand for safe-haven assets. “If inflation looks sticky, we might see a knee-jerk selloff in gold,” the strategist said. “But the broader uptrend remains hard to dismiss given the policy backdrop and geopolitical noise.”

Beyond the immediate impact of inflation data, gold’s safe-haven allure continues to strengthen. Investors are increasingly concerned about the independence of the Federal Reserve, with political interventions raising questions about whether the central bank can act free of external pressures. Such concerns tend to elevate gold’s role as a hedge against policy uncertainty. This comes alongside persistent global risks, including geopolitical flashpoints, uneven U.S. growth dynamics, and fragile confidence in parts of the global economy. These factors have combined to ensure that dips in gold remain shallow and often attract strong buying interest.

From a technical perspective, the market still carries a clear bullish tone. Gold has stabilized above the $3,402 level, which traders view as a critical support area. The rally that began earlier this month remains intact, with buyers continuing to press toward higher resistance levels. The next significant upside level is seen around $3,429, and momentum is expected to remain constructive so long as the price holds above the recent support base. Short-term pullbacks, including a possible correction back to the $3,402 level, are considered likely to be temporary in nature. If the PCE data meets or undershoots expectations, bullish momentum is expected to resume quickly, potentially propelling the metal toward $3,420 and then on to $3,436 and $3,450.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 3415

STOP LOSS: 3395

TAKE PROFIT: 3450

The UK automotive manufacturing sector exhibited a complex trajectory in July, with data from the Society of Motor Manufacturers and Traders (SMMT) indicating a 5.6% increase in vehicle production to 69,127 units. However, the overall automotive output declined by 10.8%, primarily due to a downturn in commercial vehicle manufacturing. SMMT CEO Mike Hawes highlighted challenges such as waning consumer confidence and volatile trade flows, urging the government to implement more effective strategies to foster industry growth. Despite the U.S.-UK trade agreement, tariff-related disruptions continue to impact export strategies. Industry forecasts suggest a recovery in production volumes by 2026. Concurrently, confidence within the UK services sector remains subdued, with the CBI's August survey revealing a decline in optimism and activity levels among service providers, amid persistent cost pressures and difficulties passing costs onto consumers. The organization called on Chancellor of the Exchequer Rachel Reeves to avoid increasing corporate taxes in the upcoming autumn budget and to reassess labor policies that could impose additional burdens on employers, aiming to provide short-term economic certainty. Additionally, the Bank of England has set a historical record in short-term monetary market operations by allocating £75.652 billion in seven-day liquidity injections, reflecting its policy intent to maintain market liquidity during the quantitative tightening process.

Despite widespread market consensus on a potential interest rate cut in September, there remains significant internal disagreement within the Federal Reserve regarding the future policy trajectory. Policymakers appear to be divided into three main factions: dovish members advocating for multiple rate reductions, hawkish officials opposing easing measures, and centrist policymakers adopting a cautious approach. Chairman Powell is navigating a delicate balancing act—acknowledging downside risks to the labor market while warning that tariffs could prolong inflationary pressures. According to Matthew Luzzetti of Deutsche Bank, considering the divergent views within the committee, the most straightforward approach may be a gradual rate reduction, with subsequent actions increasingly data-dependent. Goldman Sachs emphasizes that if further signs of labor market softening emerge, the Fed may need to capitalize on the current policy window. The institution projects that, regardless of whether the economy slows or normalizes, the Fed is likely to complete this easing cycle by the first half of 2026, prior to the appointment of the next chair. Market expectations for a rate cut in September have risen to 89%, with the anticipated cumulative easing by year-end reaching 55 basis points. Consequently, weaker-than-expected data could reinforce rate cut expectations, exerting further downward pressure on the U.S. dollar index and potentially strengthening the British pound indirectly.

In the 4H timeframe, the GBPUSD is oscillating between the upper and lower Bollinger Bands, with the Bollinger channels narrowing and SMAs flattening and converging, indicating a potential trend reversal. Currently, the price has formed a bearish candlestick pattern, breaking below the middle Bollinger Band. The MACD line and signal line are approaching a death cross, and the RSI is at 47, suggesting a higher probability of a downward move. If the price fails to hold above the middle band, it may test the lower Bollinger Band or previous lows at approximately 1.344 and 1.340. In the 1W timeframe, after breaking above the EMA12, the price is retesting this level; a successful hold could lead to further gains toward 1.380 or even 1.400. Conversely, failure to sustain could result in declines toward 1.310 and 1.300. Following the MACD death cross, the MACD line and signal line are retracing toward the zero-axis, with the RSI at 56, not overbought, but with decreasing highs, indicating a possible correction. Overall, the correction phase appears incomplete. It is recommended to go short initially and then go long.

Trading Direction: Sell

Entry Price: 1.348

Target Price: 1.337

Stop Loss: 1.36

Support: 1.345, 1.34, 1.337

Resistance: 1.36, 1.362, 1.378

The data released by Japan's Statistics Bureau on Friday indicates that the Consumer Price Index (CPI) in the Tokyo metropolitan area increased by 2.6% year-over-year in August, down from 2.9%. Concurrently, the core CPI in Tokyo rose by 2.5% year-over-year, also below the previous 2.9%, aligning with market expectations. As of August 29, 2025, Tokyo's core CPI declined to 2.5% year-over-year, consistent with market forecasts. The Bank of Japan (BoJ) monitors Tokyo's CPI excluding fresh food and energy, which rose by 3.0% in August, slightly below the previous 3.1%. The inflation report in Tokyo sustains market expectations of a potential resumption of interest rate hikes by the BoJ, supporting the Japanese yen. According to a Reuters survey of economists conducted in August, nearly two-thirds anticipate the BoJ will implement at least a 25 basis point rate increase later this year, with this expectation having increased over the past two weeks.

The Q2 preliminary estimate of the U.S. Gross Domestic Product (GDP) indicates an annualized growth rate of 3.3%, surpassing the prior estimate of 3.0%, highlighting a robust rebound from the sluggish Q1. Initial unemployment insurance claims last week declined to 229,000, suggesting that despite softening employment growth, the labor market remains resilient; continued claims slightly decreased to 1.95 million. The Personal Consumption Expenditures (PCE) Price Index, released concurrently with GDP, was marginally revised downward to 2.0% for the Q2, while the core PCE remained steady at 2.5%, underscoring persistent underlying inflationary pressures. The strong economic indicators have contributed to a rebound in the U.S. dollar.

In the 1H timeframe, the USDJPY price oscillates around the Bollinger Bands' upper and lower bands, currently consolidating near the middle band. Following a golden cross in the MACD, the MACD line and signal line have reverted to around the zero-axis, with the RSI at 54, indicating a neutral market sentiment and potential for a trend reversal. A decisive break above the middle Bollinger Band could propel the price toward the EMA200 and previous resistance levels at approximately 147.46 and 148.18; failure to do so may lead to a decline toward 145.8. In the 1W timeframe, the Bollinger Bands are narrowing, with price oscillating around the middle band. After a MACD golden cross, the MACD line and signal line have pulled back toward the zero-axis, and the RSI stands at 49, reflecting a predominantly sideways trend with imminent potential for a trend shift. The key focus is on whether the price can hold above the middle Bollinger Band; a successful hold could lead to an upward breakout beyond 150, while failure might see a decline toward 146. In the short term, the strategy is to go short initially and then go long.

Trading Direction: Sell

Entry Price: 147.4

Target Price: 146.2

Stop Loss: 148.6

Support: 145.8, 142.6, 141.6

Resistance: 148.5, 149.6, 151

Switzerland’s Q2 GDP figures showed the economy slowed to an annual growth rate of 1.2%, down from 1.8% in the previous quarter and weaker than expectations of 1.4%. The slowdown highlights the challenges facing the Swiss economy amid global headwinds. Adding to the soft tone, the KOF Leading Indicator—a forward-looking gauge of economic activity—dropped to 97.4 in August, falling from 101.3 in July and undershooting market expectations for a milder decline to 98.0.

In contrast, the Swiss labor market held steady. Employment increased 0.6% YoY to 5.532 million in Q2, matching the pace of the prior quarter. The expansion was largely driven by the services sector, which grew 0.9% to reach 4.402 million, underscoring its role as the backbone of job creation. On the policy front, the Swiss government announced new initiatives aimed at enhancing the country’s competitiveness as a business hub, following the imposition of steep 39% U.S. import tariffs on Swiss goods. Measures include efforts to ease regulatory burdens on companies, with officials signaling that costly new rules could be postponed to safeguard investment and growth.

Across the Atlantic, political uncertainty surrounding the U.S. central bank persists. President Donald Trump’s push to remove Fed Governor Lisa Cook is advancing through the courts, yet the White House is already preparing for her replacement. Trump stated that “very good people” are being considered, noting Treasury Secretary Scott Bessent is leading the selection process. Reports suggest that Stephen Miran—initially nominated to replace Adriana Kugler on the Fed Board—could be redirected to Cook’s position, potentially extending his role at the central bank. Senate hearings for Miran’s nomination are scheduled for next week, adding another layer of scrutiny over Fed leadership.

On the data front, the second estimate of Q2 U.S. GDP showed an annualized growth rate of 3.3%, outpacing expectations of 3.1% and improving from the prior 3.0% reading. Inflation metrics were slightly softer: both the GDP Price Index and preliminary headline PCE prices eased to 2.0% from 2.1%, while core PCE advanced 2.5% QoQ, just under the forecast of 2.6%. Weekly jobless claims dipped to 229K, slightly better than the 230K expected and down from a revised 234K, reinforcing the view of a resilient labor market.

Housing data, however, remained weak. Pending home sales declined 0.4% in July, a sharper drop than the 0.1% expected, though still an improvement from June’s 0.8% fall. Higher borrowing costs and affordability pressures continue to weigh on buyer demand, keeping the sector under strain.

From the Fed, New York President John Williams described the U.S. economy as “slowing, not stalling.” He highlighted that GDP growth has eased to around 1.0%–1.5%, while labor market momentum has moderated. Williams reaffirmed that policy remains in a “moderately restrictive” stance, with rates above neutral, and reiterated that rate cuts could be appropriate over time if the economy unfolds in line with expectations.

Treasury markets reflected this dovish tilt. The 10-year yield slipped 2.5 basis points to 4.215%, while real yields dropped three basis points to 1.785%. According to the CME FedWatch tool, markets are pricing an 87% probability of a 25-basis-point cut in September, with another cut anticipated before year-end.

The USDCHF pair has bounced from the 0.8000 level, which continues to act as a key support. Repeated failures to break lower could encourage a corrective rebound toward the descending trendline around 0.8064. The 100- and 200-period moving averages, positioned at 0.8059 and 0.8041 on the 4-hour chart, overlap with this zone, suggesting a strong confluence of resistance. A sustained close above these levels, followed by a decisive break of the trendline, could open the door to a more extended bullish move.

On the other hand, a clean break below the 0.8000 threshold would expose the pair to deeper downside risk. The RSI only reached 39 during the recent leg lower, leaving room for bearish momentum to reassert itself. A failure to hold 0.8000 would therefore invalidate the short-term bullish setup and potentially trigger a more significant downward extension.

Trading direction: Buy

Entry price: 0.8010

Target price: 0.8070

Stop loss: 0.7980

Validity: Sep 05, 2025 15:00:00

President Donald Trump’s effort to remove Federal Reserve Governor Lisa Cook is now moving into the courts, yet the White House has already begun preparing for her replacement. On Tuesday, Trump remarked, “We have some very good people for that position,” while pointing out that Treasury Secretary Scott Bessent is overseeing the search process for the next Fed Chair. Reports indicate that Stephen Miran—originally nominated to replace Adriana Kugler on the Fed Board—could instead be redirected to Cook’s seat for a longer term. Senate hearings for Miran’s nomination to succeed Kugler are expected to take place next week, adding further political intrigue around the central bank’s leadership.

Meanwhile, the second estimate of Q2 U.S. GDP revealed an annualized expansion of 3.3%, beating forecasts of 3.1% and improving from the prior 3.0% reading. Price indices were slightly softer: both the GDP Price Index and preliminary headline PCE prices came in at 2.0%, down from 2.1% previously. The preliminary core PCE price index rose 2.5% QoQ, just shy of the 2.6% estimate. At the same time, weekly jobless claims slipped to 229K, marginally better than the consensus of 230K and down from a revised 234K, signaling continued resilience in the labor market.

In housing, pending home sales fell 0.4% in July, a deeper decline than the 0.1% drop expected, though still an improvement from June’s 0.8% fall. The figures highlight ongoing weakness in the sector, weighed down by high borrowing costs and affordability constraints that continue to challenge buyers.

New York Fed President John Williams offered a cautious but balanced perspective, describing the U.S. as an economy that is “slowing, not stalling.” He noted that GDP growth has cooled to around 1.0%–1.5%, while hiring momentum has also moderated. Williams stressed that policy remains in a “moderately restrictive” stance, with rates still above neutral. He reiterated that if the economy evolves broadly as expected, interest rates will eventually need to move closer to neutral—suggesting that rate cuts could become appropriate over time.

Treasury yields extended their decline. The 10-year yield slipped 2.5 basis points to 4.215%, while U.S. real yields—derived from nominal yields adjusted for inflation expectations—fell three basis points to 1.785% at the time of writing. Futures markets continue to tilt dovish: according to the CME FedWatch tool, traders are assigning an 87% probability of a 25-basis-point rate cut in September, with an additional 25 bps reduction priced in by year-end.

Gold (XAUUSD) briefly reached 3423 before retreating, and the rejection from this level could mark the beginning of renewed downside pressure. Historically, the metal has struggled to sustain momentum above these levels, which has often triggered selling activity. The fact that this zone lies close to gold’s all-time highs further strengthens the case for profit-taking among market participants. If the price fails to break higher, a corrective move toward 3368 looks plausible. This area coincides with the 0.618 and 0.50 Fibonacci retracements, increasing the likelihood that a pullback gravitates toward this support zone before any fresh attempt at recovery.

The 100- and 200-period moving averages, located at 3360 and 3355 on the 4-hour chart, are tightly clustered together. This convergence signals that gold has been trading sideways for an extended period. Should the bearish rejection continue, it would reinforce the notion of a range-bound market. Moreover, the alignment of the moving averages with key Fibonacci levels adds confluence, making these areas potential magnets for price action. A decisive break lower could therefore validate the correction and set the stage for a deeper retracement before bulls attempt to regain control.

Trading direction: Sell

Entry price: 3410

Target price: 3370

Stop loss: 3450

Validity: Sep 05, 2025 15:00:00

Australia’s headline consumer price index accelerated to 2.8% YoY in July, far above the 2.3% consensus and sharply higher than June’s 1.9%. The print marks the strongest annual pace since July 2024 and snaps a multi-month disinflationary trend.

Core measures firmed in tandem. Trimmed-mean CPI rose to 3.2% from 2.5%, while the weighted-median gauge climbed to 2.7% from 2.1%—both the fastest readings in three months.

The result intensifies concerns that price pressures could prove persistent. July data, as the first month of the quarter, are goods-heavy and therefore offer limited insight into services inflation, which will be clearer in subsequent releases.

For the Reserve Bank of Australia, the report is a cautionary signal rather than a trigger for panic. Policymakers will wait for the full quarterly CPI update before reassessing the stance, but today’s outcome effectively rules out a cut at the 24 September board meeting.

Absent a marked deterioration in labour-market conditions or another downside shock, November remains the more realistic window for the next policy adjustment.

The upside surprise in July CPI propelled AUD crosses sharply higher, reinforcing the RBA’s case for a measured easing cycle and removing any prospect of an accelerated easing path.

EURAUD has retraced from the 1.8155 short-term high and continues to drift lower. Intraday bias remains bearish. The 38.2% Fibonacci retracement of the 1.7245–1.8155 advance sits at 1.7807, virtually coinciding with the lower bound of the descending channel (now at 1.7816) and the MA55 (1.7841).

A sustained break below this confluence support would confirm completion of the up-move from 1.7245 and imply that the corrective pattern from 1.8554 has entered its third leg, exposing the 61.8% retracement at 1.7593.

Nevertheless, we view the support cluster as sufficiently robust to underpin a resumption of the broader uptrend.

Trading Direction: Long

Entry Price: 1.7840

Target Price: 1.8098

Stop Loss: 1.7700

Valid Until: September 13, 2025, 23:55:00

Support: 1.7853/1.7810/1.7885

Resistance: 1.7922/1.7982/1.8082