Home › Market News › Gold Futures, Interest Rates, and a New Quote Of The Week!
The Economic Calendar:
MONDAY: Used Car Prices (8:00a CT), Consumer Inflation Expectations (10:00a CT), Consumer Credit Change (2:00p CT)
TUESDAY: NFIB Business Optimism Index (5:00a CT), Redbook (7:55a CT), Non Farm Payrolls Annual Revision (9:00a CT), 3-Year Note Auction (12:00p CT), API Crude Oil Stock Change (3:30p CT)
WEDNESDAY: MBA Mortgage Applications (6:00a CT), PPI (7:30a CT), Wholesale Inventories (9:00a CT), EIA Petroleum Status Report (9:30a CT), 10-Year Note Auction (12:00p CT), Monthly Budget Statement (3:00p CT)
THURSDAY: Jobless Claims (7:30a CT), CPI (7:30a CT), EIA Natural Gas Report (9:30a CT), 30-Year Bond Auction (12:00p CT), Fed Balance Sheet (3:30p CT)
FRIDAY: University of Michigan Consumer Sentiment (9:00a CT), WASDE Report (11:00a CT), Baker Hughes Rig Count (12:00p CT)
Key Events:
The CPI report will be the last main data point ahead of the Federal Reserve’s September 17th FOMC interest rate decision.
A 0.3% month-on-month increase in core and headline CPI will be no barrier to a 25bp rate cut, given evidence of cooling activity and a stalling jobs market.
Source: Trading Economics
U.S. stock markets ended a holiday-shortened week with mixed results, leaving traders to debate whether the market is accumulating risk or setting the stage for a new leg of its record run. The Nasdaq 100 finished 0.18% lower while the S&P 500 was down 0.26%, even as smaller-cap stocks, which are more sensitive to interest rate movements, advanced 0.66%.
The S&P 500 is currently moving horizontally near historic highs, a pattern that has traders questioning the market’s next direction. According to market analysts, a significant portion of the market’s support comes from Commodity Trading Advisors (CTAs), who are reputedly “max long,” or at their maximum bullish position. This suggests that current price levels are being actively defended, at least until key events, such as the nonfarm payrolls report and the Federal Open Market Committee (FOMC) meeting, are resolved.
The core bullish case rests on the expectation of Federal Reserve policy. Proponents of this view believe that a series of sequential rate cuts extending well into 2026 will be enough to propel the market into a strong fourth quarter. The market’s resilience would also be bolstered if courts affirm the Trump administration’s tariff policies.
However, a bearish counterargument is emerging, rooted not in a singular thesis but in a collection of historical data that has consistently preceded bear markets. The extremity of these signals has prompted conservative investors, such as Berkshire Hathaway, to hold a significant portion of their portfolio in Treasury bills for nearly five years. The primary reason a major market downturn has not yet unfolded is attributed to the Federal Reserve and its willingness to cut rates. This policy is now under scrutiny as the Fed Chair defends the central bank’s independence.
A major risk looms if CTAs begin to liquidate their long positions. A mass unwinding could trigger a significant correction, either a seasonal event in September or a more severe downturn, regardless of whether the Fed follows through with rate cuts. A similar market setup was observed last fall, which was only staved off by the FOMC’s sequential rate cuts.
“5-1 risk/reward ratio allows you to have a win rate of 20%. I can actually be a complete imbecile. I can be wrong 80% of the time and still not lose.”
-Paul Tudor Jones
Wall Street analysts are increasingly bullish on gold, with futures on the Comex hitting new highs of $3,640.10 per ounce on September 3rd, marking a 36% gain so far this year.
Leading financial institutions are raising their price forecasts, with:
This bullish sentiment is reflected in the performance of gold exchange-traded funds, which have seen their average net value surge by 42% this year, with ETFs tracking gold stocks performing even better at an average growth rate of 66%.
Source: TradingView
The U.S. labor market unexpectedly hit a wall in August, strengthening the case for a Federal Reserve rate cut in two weeks and casting a shadow over long-term borrowing costs.
The Bureau of Labor Statistics reported that the U.S. economy added just 22,000 jobs last month, a shocking miss compared to the consensus forecast of 40,000 to 100,000.
Compounding the surprise, the June payroll number was revised down sharply from a gain of 27,000 to a loss of 13,000, marking the first negative jobs report since 2020. This data solidifies expectations for a 25-basis-point rate cut at the Fed’s next meeting, though a more aggressive 50-basis-point move remains unlikely for now.
The weak jobs data have fueled a rally in the bond market, sending yields on long-dated U.S. Treasuries lower. The 30-year Treasury yield recently dipped to around 4.76%, driven by reduced concerns about growth and rising expectations for Fed easing. However, this relief is tempered by underlying volatility.
The 30-year bond is currently trapped in a massive triangle-like formation, with market observers watching the 5% level as a key threshold. A sustained move above it could trigger a “dynamic” shift in the bond market.
In response to the jobs data, futures markets quickly shifted, with the CME FedWatch tool pricing in a 100% chance of at least a 25-basis-point rate cut at the Fed’s next meeting. The probability of a more aggressive 50-basis-point cut also rose to about 10%.
Source: TradingView
Panic in Japanese is: パニックPanikku
Even as the Bank of Japan (BOJ) raises its policy rate to a 17-year high of 0.50%, Japanese government bond (JGB) yields are surging to levels not seen in decades, signaling a profound shift in the country’s financial landscape. The move to normalize policy after years of massive stimulus is clashing with deep-seated concerns over fiscal stability and persistent inflation.
The government bond market is experiencing a broad-based sell-off. The 10-year JGB yield recently rose to 1.61–1.633%, a 13-year high. The pain is even more acute in longer-dated maturities, where the 20-year yield has reached a 26-year high of 2.685–2.695%, and 30- and 40-year yields have hit record highs in the 3.24–3.50% range.
This surge in super-long yields—up 50–100 basis points year-to-date—is fueled by multiple factors.
Analysts point to the BOJ’s tapering of its bond-buying program, which had long suppressed yields. This shift, combined with concerns over Japan’s massive public debt—which stands at 260% of GDP—is spooking investors. Furthermore, a lack of demand from key players, particularly domestic insurers, is exacerbating the upward pressure on yields.
In response to the market stress, the Ministry of Finance may step in to ease pressure, potentially by cutting the issuance of super-long bonds by July 2026. This move would represent a rare mid-year adjustment to its bond issuance plans, signaling the seriousness of the market’s unease.
The BOJ is widely expected to hold its policy rate steady at its upcoming September 18–19 meeting. However, if inflation and wage pressures persist, the central bank may feel compelled to hike the rate further to around 1.0% by the fourth quarter of 2025. With a negative real interest rate of approximately -1.5%—given core CPI at 2.5–3.0%—the BOJ still has a long way to go to achieve a neutral policy stance.
The market remains on high alert, with continued volatility expected as traders monitor both the BOJ’s next moves and broader developments in global trade and tariffs.
Source: TradingView
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