Gold prices climb amid anticipation for the Federal Reserve's preferred inflation figures.
In the economic landscape of August 2025, several significant developments have taken place.
The four-week moving average of initial jobless claims saw an increase, reaching 228,500. However, a slight decrease was observed in the most recent data, with initial jobless claims decreasing to 229,000 for the period ending August 23. Meanwhile, continuing jobless claims decreased to 1,954,000 for the week ending August 16.
Consumer spending has shown resilience, rising 1.6% quarter-on-quarter in the second quarter of 2025. This growth, coupled with the economy's expansion, contributed to the economy growing at an annual rate of 3.3% in the same quarter.
Inflation indicators have also been monitored closely. Core PCE prices, a key measure of inflation, rose by 2.5% in the second quarter of 2025.
The Federal Reserve's monetary policy has been under scrutiny, with expectations running high for a rate cut. According to the CME FedWatch Tool, there is an 85.1% chance of a 25-basis-point rate cut at the Fed's next policy meeting in September. Fed Chair Jerome Powell has hinted at a potential rate cut, subtly indicating that a move may happen at the Fed's upcoming meeting on September 17 at the Jackson Hole Symposium in Wyoming.
The US economy has faced some turbulence in recent months, with the sacking of one of the Fed's governors, Lisa Cook, by President Donald Trump. However, it is important to note that Jerome Powell himself remains in office as of August 12, and there is no evidence that he was removed from his position as Fed Chair. The sacking of Lisa Cook, which was reportedly due to allegations of fraud, is seen as a step towards asserting control over the central bank, given Trump's long-drawn criticism of Powell for keeping interest rates high.
Internationally, the conflict between Russia and Ukraine continues. The US is making efforts to bring the leaders of Russia and Ukraine to the negotiating table to end the war.
In the commodities market, gold prices for September delivery increased by $25.70 per troy ounce, while silver prices for the same period saw a more substantial increase of $47.70 cents per troy ounce.
Looking ahead, tomorrow's release of the Personal Consumption Expenditures price index is now in focus, offering insights into the current state of inflation in the US economy.
