Gold has had a golden 2025. It might have a golden 2026 too.

Commodity

Summary:

Gold surged over 40% in 2025, outpacing stocks and bitcoin, driven by Fed rate cut bets, dollar weakness, and central bank buying. Analysts see potential gains toward \$5,000 by 2026 amid global uncertainty.

A safe haven asset that's doubled in value in the past three years, draws more investors while geopolitics become more turbulent, and keeps getting its analyst price targets raised as the Fed prepares to smash the rate cut button. That might sound like a crypto sales pitch. But it's gold (GC=F).

By the numbers, the precious metal is shimmering. Gold prices are up more than 40% this year, far outpacing the S&P 500’s (^GSPC) 10% gain. Even bitcoin (BTC-USD), which has enjoyed a record-setting year thanks to the Trump administration's embrace, has been left in the yellow-speckled dust with a mere 20% gain.

Unlike the stock market and its rising tides, there are people on the other end of this trade. Gold's rise also serves as a barometer of the economic mood — and not in a good way.

Many of the factors lifting gold prices would be considered disconcerting outside of the context of an appreciating asset. Gold's identity and benefit as a store of value are intertwined with financial turmoil. People, governments, and institutions don't normally seek refuge when things are going well, and typically, when they do, they are competing with the US dollar and various iterations of longer-term bonds.

On the other hand, the peak of the 5,000-year-old store of value comes not in spite of, but alongside a record high for tech stocks and an overall embrace of bullishness in the stock market.

The potential for lower interest rates, as a salve to a struggling labor market, has electrified the markets. What on its face was the bad news of higher unemployment also came with the good news of an expected rate cut, perhaps even a jumbo cut. Lower rates tend to mean higher gold prices, as the safe-haven asset becomes more attractive compared to risk-free investments.

Even before all of that, however, the post-pandemic era of global politics has shaken up long-standing alliances and given rise to new tensions among governments. President Trump's trade policy injected fresh uncertainty into the economic outlook and prompted investors to hedge against US assets.

According to an analysis by Morgan Stanley Research, the US dollar ended the first half of 2025 with its biggest loss since 1973, and pressure against the greenback is likely to continue. As a protection against inflation and devaluing currency, gold makes sense.

You can see where the gains have come from on the opposite end of the ledger. The US dollar index (DX.Y.NYB) has declined nearly 10% year to date, while the long-dated Treasury yields have stayed high — even with the next rate cut coming into view. The world is having trust issues with US dollars and debt and turning to other, shinier things.

Policymakers around the world are playing a role too, as they have amped up their purchases of gold. In fact, foreign central bank holdings of gold have topped US Treasurys for the first time since 1996, according to Bloomberg data compiled by Crescat Capital macro strategist Tavi Costa.

The White House's pressure campaign against the Federal Reserve has also added to gold's luster as those trust issues evolve. In a recent note, Goldman Sachs analysts said that gold could surge to $5,000 an ounce by 2026 if the Fed's independence is threatened and investors shift even a small amount of their holdings from government bonds to gold.

But the foundation of gold's bullishness is defensiveness, not a world-changing technology or financial innovation, which leads to the obvious question of when the wind blows the other way.

No one is getting instantly rich off the idea of a gold treasury company. This isn't the perpetual motion machine of bitcoin and its lesser peers. Gold is inert. But that’s also its ultimate selling point: The precious metal has the benefit of not pretending to be anything else.

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Manuel

Commodity

Political

Oil climbed for a third session as investors weighed President Donald Trump’s next moves to penalize Russia for its ongoing war in Ukraine, raising concerns over crude supplies from the region.

West Texas Intermediate rose to trade around $64 a barrel, reaching the highest intraday price in a week. The commodity had a knee-jerk reaction after Trump questioned Russia’s incursion into Polish airspace in a social media post. The second line (“Here we go!”) spurred traders to cover short positions in the event that the US leader moves forward with penalties on Russian energy soon.

“The read-through is that Trump–Putin relations are deteriorating rather than improving, which raises the odds of some kind of response,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group.

The post comes after Trump told European Union officials he’s willing to add new tariffs on India and China, the top importers of Russian crude, in an effort to get Moscow to negotiate with Ukraine — but only if EU nations do so as well.

Oil traders are also weighing the fallout from Israel’s strike in Doha and the outlook for US interest rates.

US producer prices unexpectedly declined, adding to the case for the Federal Reserve to cut borrowing costs, potentially helping support energy demand.

Meanwhile, Israel attacked military bases in Yemen manned by Houthi operatives, a day after the country targeted Hamas leaders in Qatar’s capital Tuesday. The move threatens to derail US-led efforts to end the Middle East conflict. Israel has claimed full responsibility, while Trump distanced himself from the strike.

Dueling Forces

US oil has been stuck between $62 and $67 for more than a month now, with expectations of a glut toward the end of 2025 hanging over the market. Still, the unrest from Poland to Qatar has reignited concerns about an escalation of hostilities, which has revived a geopolitical risk premium in crude prices.

WTI’s prompt spread — the difference between its two closest contracts — closed at its weakest level since April on Tuesday, reflecting a softening domestic market. A US government report on Wednesday said showed crude inventories rose by 3.9 million barrels, significantly more than expected, while product inventories also lifted.

In contrast, options markets saw a small move upward in the cost of bullish calls. Periods of elevated geopolitical risk have generally been most clearly priced in the options space.

US “crude exports will rebound in the weeks ahead, while refinery runs begin their seasonal swoon,” said Matt Smith, Americas lead oil analyst at market intelligence firm Kpler.

Source: Bloomberg

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Adam

Bond

Treasury Investors Ramp Up Bullish Positions Before CPI Data_1

Investors are leaning into bullish bets on US Treasuries ahead of this week’s inflation report, as a recent run of softer-than-expected data opens the door for the Federal Reserve to cut interest rates in September and further ease monetary policy in the months ahead.

The market’s dovish stance has been reflected in open interest, or the amount of new risk held by traders: Some 70,000 contracts were added in October fed funds futures following Friday’s lackluster employment report, the largest daily increase on record for that month.

In SOFR options, which closely track the Fed’s policy path, a number of large positions have emerged that look to benefit from an outsized cut of 50 basis points at next week’s meeting, though such a move is seen as unlikely.

“It’s now a lock that the Fed will cut interest rates at their meeting next week and that further rate cuts will follow in the months ahead,” said Bill Adams, chief economist for Comerica Bank. “The question is by how much.”

Treasury Investors Ramp Up Bullish Positions Before CPI Data_2

Yields on the US 10-year Treasury have dropped from a July peak to their lowest levels in around five months, as bonds rallied after a series of reports suggested that the US economy is cooling. Friday’s data from the Bureau of Labor Statistics further bolstered that view when it showed nonfarm payrolls increased by just 22,000 in August while unemployment rose to its highest since 2021.

In London trading, the 10-year yield was unchanged at 4.08%. The yield on two-year notes, which are sensitive to moves in rates pricing, slipped 2 basis points to 3.54%.

On Tuesday, a BLS report showed the number of workers on payrolls through March will likely be revised lower by a record 911,000. Investors are now awaiting a report on consumer prices, due Thursday.

Treasury Investors Ramp Up Bullish Positions Before CPI Data_3

Going Big

Wall Street has scrambled to adjust forecasts for what many now expect to be a more aggressive trajectory of rate cuts. Economists at Barclays, for instance, now see a quarter-point rate cut at each of this year’s three remaining meetings, from a previous forecast of just two cuts for the remainder of 2025.

Though interest rates swaps currently price in a full 25 basis point cut for next week, the run of weak data has emboldened some market participants looking for a heftier move.

“We recognize that we are moving early,” said Steven Englander, global head of G10 FX Research at Standard Chartered, in a report ahead of Tuesday’s data on revisions. “But we expect preliminary revisions to employment data for April 2024 to March 2025 to support our 50-bps call.”

Others are less sure the Fed will be that aggressive in September or the months ahead. Fed swaps on Tuesday were pricing in a combined 67 basis points of easing over the three remaining meetings this year, around 8 basis points short of three quarter-point moves.

A 50-basis point cut “would scare the market, as they would ask, ‘are we missing something that the Fed knows about?,” said Jeff Given, senior portfolio manager at Manulife Investment Management.

If employment data recovers in September, “then the Fed may say they can cut at every other meeting for a little time,” he said.

Here’s a rundown of the latest positioning indicators across the rates market:

JPMorgan Treasury Client Survey

JPMorgan’s Treasury client survey showed longs rise by two percentage points and shorts unchanged on the week at the highest since early February.

Treasury Investors Ramp Up Bullish Positions Before CPI Data_4

Most Active SOFR Options

In SOFR options, across Sep25, Dec25 and Mar26 tenors over the past week there was a heavy amount of new risk added in the 96.25 strike, largely due to demand for Sep25 calls via positions such as SFRU5 96.1875/96.25 call spreads, while there was also outright buying in the strike used to target a half-point Fed cut at the September meeting. There was also demand for SFRZ5 96.00/96.125/96.25/96.375 call condors over the past week. December call condors have also been popular over the past week with flows including SFRZ5 96.1875/96.3125/96.50/96.625 call condors and SFRZ5 96.25/96.375/96.50/96.625 call condors

Treasury Investors Ramp Up Bullish Positions Before CPI Data_5

SOFR Options Heatmap

In SOFR options across Sep25, Dec25 and Mar26 tenors, the 96.125 strike remains the most populated, where a large amount of Sep25 calls lie, largely due to a massive position in the SFRU5 96.125/96.25 call spread which has been built over recent weeks to a size in the region of 350,000 options. The 95.625 strike also contains a heavy amount of open interest largely due to positioning in Sep25 puts and Dec25 calls. There also remains a large amount of 95.75 Sep25 puts in open positions.

Treasury Investors Ramp Up Bullish Positions Before CPI Data_6

Treasury Options Skew

Treasury options skew in the long-end of the curve has flipped to favor calls in recent sessions, indicating that traders are paying a small premium to hedge a rally in the long-end vs. a selloff, as 30-year yields continue to stretch away from a 5% level.

Treasury Investors Ramp Up Bullish Positions Before CPI Data_7

CFTC Futures Positioning

In the week ending Sept. 2, asset managers added to net long duration, increasing longs across most Treasury futures tenors. They were most bullish in 10-year note futures, where net long position was extended by around $6.6 million per basis point in risk. On the flip side, hedge funds were bearish 10-year note futures, where net short position was extended by around $5.5 million per basis point in risk.

Treasury Investors Ramp Up Bullish Positions Before CPI Data_8

Source: Bloomberg

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Owen Li

Central Bank

Reports claiming the Trump administration attempted to remove Fed Governor Jerome Powell have no substantiated basis from primary sources or official announcements as of September 2025.

Potential removal of a Fed Chair could destabilize financial markets, affecting cryptocurrency volatility, but no confirmed legal actions or disruptions have been noted.

Trump Administration Allegedly Appeals Court to Block Fed Chair Removal

Rumors of Trump seeking legal action to remove Fed Chair Jerome Powell circulate without official confirmation.

The circulating rumors about Powell’s potential removal have prompted discussions among analysts and market participants. While no official evidence supports these reports, concerns about leadership uncertainties could influence market sentiment towards both traditional and crypto assets. As of now, neither Trump nor Powell has commented on these alleged legal actions.

"No public statements have been made on channels referencing a court injunction or the attempt to remove Powell." - Federal Reserve Biography

Analysts Weigh In on Financial and Crypto Implications

Did you know? The Federal Reserve’s leadership roles have historically faced political pressures, but no sitting or former U.S. president has successfully removed a Fed Chair through emergency legal action.

Source: CryptoSlate

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Devin

Economic

The European Union is very unlikely to impose crippling tariffs on India or China, the main buyers of Russian oil, as U.S. President Donald Trump has urged the bloc to do, EU sources said.

An EU delegation, including the EU's Russia sanctions chief, flew to Washington this week to discuss how the two sides can coordinate on sanctions against Russia over its full-scale invasion of Ukraine.

Officials said Trump urged the EU to hit India and China with up to 100% tariffs in order to put pressure on Russian President Vladimir Putin, who relies on energy revenues to fund his country's war in Ukraine.

The European Commission did not respond to a request for comment.

The European Union has imposed extensive sanctions on Russia and also listed two Chinese banks as well as a major Indian refinery in its last package in July.

However, the EU treats tariffs in a different way to sanctions and only imposes them after an investigation typically lasting months to establish a legally sound justification, the sources said.

The bloc has so far only imposed tariffs in the context of the Ukraine war on Russian and Belarusian fertilizers and farm products. The justification for the measures was to prevent creating a dependency that could be exploited and to avoid harm to EU fertiliser producers.

"So far, there is no discussion on possible tariffs neither on India...nor with China," an EU diplomat said.

Furthermore, the EU is in the midst of finalising a trade deal with India, which the bloc is unlikely to want to jeopardize.

Trump's position on India also appeared to ease by Wednesday, when he said he was looking to reset trade relations with New Delhi.

Another EU source said such tariffs were risky and could be too broad and it was easier to sanction specific entities and open the door to delist them if they ended their business with Russia.

Up to now, the EU had limited itself to listing small and unknown entities in third countries, which were often shell companies used to funnel military equipment or dual-use goods for use by Russia's military.

The EU is planning to list banks in two central Asian countries in its 19th package of sanctions as well as Chinese refineries, which could be proposed as soon as Friday.

Source: TradingView

To stay updated on all economic events of today, please check out our Economic calendar

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Olivia Brooks

Economic

U.S. producer prices unexpectedly fell in August amid a compression in trade services margins and mild increase in the cost of goods, suggesting that domestic businesses were probably absorbing some of the tariffs on imports.

The lack of strong producer price pressures, despite import duties, could also be signaling softening domestic demand against the backdrop of a struggling labor market. The Federal Reserve is expected to cut interest rates next Wednesday, with a quarter-percentage-point reduction fully priced in, after pausing its easing cycle in January because of uncertainty over the impact of President Donald Trump's sweeping tariffs."Inflation barely has a heartbeat at the producer level which shows the tariff effect is not boosting across-the-board price pressures yet," said Christopher Rupkey, chief economist at FWDBONDS. "As time goes on one has to wonder if there are slow-growth reasons and weak economic demand that is keeping inflation in check. There is almost nothing to stop an interest rate cut from coming now."

The Producer Price Index for final demand dipped 0.1% last month after a downwardly revised 0.7% jump in July, the Labor Department's Bureau of Labor Statistics said on Wednesday. Economists polled by Reuters had forecast the PPI would advance 0.3% after a previously reported 0.9% surge in July.A 0.2% drop in the prices of services accounted for the fall in the PPI. That followed a 0.7% rebound in July. Services were last month held down by a 1.7% decline in margins for trade services, reflecting a 3.9% decrease in margins for machinery and vehicle wholesaling.

But the cost of services less trade, transportation and warehousing increased 0.3% while prices for transportation and warehousing services shot up 0.9%.

Portfolio management fees increased 2.0%. Airline fares rose 1.0% while the cost of hotel and motel rooms increased 0.9%. Prices for dental services accelerated 0.6%.

Goods prices edged up 0.1% after increasing 0.6% in the prior month. Food prices gained 0.1%, with declines in the costs of eggs and fresh fruits partially offsetting more expensive beef and coffee because of tariffs. Wholesale beef prices surged 6.0% while those for coffee vaulted 6.9%.

Energy prices fell 0.4%. Excluding the volatile food and energy components, producer goods prices rose 0.3% after climbing 0.4% in July, indicating some pass through from tariffs. In the 12 months through August, the PPI increased 2.6% after climbing 3.1% in July.

Economists are expecting price pressures from tariffs to lift consumer inflation in August.

U.S. stocks opened higher. The dollar eased against a basket of currencies. U.S. Treasury yields fell.

Labor market weakness has raised concerns that the economy was stagnating. The government estimated on Tuesday that the economy likely created 911,000 fewer jobs in the 12 months through March than previously estimated.

That data followed the release last Friday of the monthly employment report, which showed job growth almost stalled in August and the economy shed jobs in June for the first time in four and a half years.

Source: Kitco

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Economic

President Donald Trump and Indian Prime Minister Narendra Modi pledged to talk and resume trade negotiations, signaling a possible thaw after weeks of a blistering fight over tariffs and Russian oil purchases.

“I am pleased to announce that India, and the United States of America, are continuing negotiations to address the Trade Barriers between our two Nations,” Trump wrote on social media Tuesday. “I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our Great Countries!,” he added.

Modi responded shortly after with a post on X, saying that he was looking forward to speaking with Trump and that the US and India are “close friends and natural partners.”

“I am confident that our trade negotiations will pave the way for unlocking the limitless potential of the India-US partnership,” Modi said. “Our teams are working to conclude these discussions at the earliest.”

As tensions ratchet down, a team of Indian trade negotiators is discussing plans to travel to Washington in coming days, perhaps as early as next week to resume trade talks, a person familiar with the matter said, asking not to be identified as the details aren’t public.

In order to agree a trade deal, New Delhi wants the US to address the 25% reciprocal tariff on Indian exports to America and the 25% additional levy imposed as a penalty for buying Russian oil, the person said.

A spokesperson for the Ministry of Commerce and Industry didn’t immediately respond to an email seeking further information.

Trump’s comments offering a positive appraisal of relations between Washington and New Delhi come even as the US president is pressuring European Union leaders to join him in ratcheting up tariffs on India and China to punish the countries for Russian energy buys.

Trump told EU officials during a meeting earlier Tuesday that he’s prepared to join them if they impose sweeping new tariffs on India and China in a bid to raise pressure on Russian President Vladimir Putin to join ceasefire talks with Ukraine, according to people familiar with the discussions. The US is willing to mirror tariffs imposed by Europe on either country, one of the people said.

That move threatens to further complicate efforts to resolve Trump’s trade dispute with India, exacerbated last month by the US doubling the tariff rate on many goods from the country to 50% over India’s purchases of Russian oil.

Trump appeared to soften his rhetoric on India last week, saying there was “nothing to worry about” in ties between the two countries. Officials in New Delhi said at the time they viewed the comments with caution, and would wait for more signals from the White House.

Sonal Varma, an economist at Nomura Holdings Inc., said comments from both the leaders represent positive signals and increases the chances of India’s 50% tariff rate being lowered in coming months.

However, Trump’s willingness to impose sweeping new tariffs on India and China for buying Russian oil “suggests that the US wants the EU to initiate the next step on Russia-related pressures.” The EU and India are currently negotiating a free trade agreement, which would need to be considered in any decision around additional tariffs, she said.

China, Russia Ties

While India was one of the first countries to open talks with Trump on trade, the imposition of high levies on their exports shocked officials in New Delhi. US officials have expressed frustration with India’s high levies on imports and other non-tariff barriers.

Trump hit India with a 25% rate before doubling that to address New Delhi’s continued Russian energy buys. India has assailed the tariff hikes and insisted that it will continue to buy Russian oil as long as it is financially viable. India has been the largest buyer of Russian seaborne crude as the discounted barrels have helped the world’s third largest oil consumer keep its import bill in check.

The positive signals from Trump and Modi come a week after the Indian leader’s trip to China, where he held talks with Putin and Chinese President Xi Jinping. The US president had criticized the meeting at the time and said India had been “lost” to China.

“The US is India’s largest export market by a wide margin — the value of it is higher than all of the shipment to BRICS’ countries combined,” said Trinh Nguyen, senior economist at Natixis. “As such, the US and India are natural trade partners given complimentary comparative advantages. Both Modi and Trump have strong reasons to mend ties.”