UOB’s Quek Ser Leang and Lee Sue Ann highlight that GBP/USD closed marginally higher near 1.3510, with price action confined to a narrow 1.3493–1.3515 range. Intraday, they see scope for the Pound to edge higher but still capped within 1.3490–1.3535. Over 1–3 weeks, GBP can test 1.3555, though a sustained rise above that level is viewed as unlikely.
Pound strength seen but constrained"24-HOUR VIEW: After GBP rose to a high of 1.3530 on Monday, we indicated yesterday that “while GBP could rise further, the combination of slowing momentum and overbought conditions suggests any advance is likely to be contained within a 1.3490/1.3535 range.” The subsequent price movements did not unfold as expected. GBP traded in a narrow sideways range of 1.3493/1.3515, closing marginally higher by 0.01% at 1.3509. Despite the quiet price action, the underlying tone appears to be firm, and there is a chance for GBP to edge higher. However, we continue to hold the view that any advance is likely to be contained within a 1.3490/1.3535 range."
"1-3 WEEKS VIEW: We have held a positive GBP view since last Monday. Yesterday (11 Aug, spot at 1.3510), we indicated that while GBP “could test 1.3555, based on the prevailing momentum, a continued rise above this level appears unlikely.” We also indicated that “to keep the momentum going, GBP must hold above 1.3460 (‘strong support’ level).” There is no change in our view."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The New Zealand Dollar (NZD) accelerates its reversal against the US Dollar (USD) on Wednesday, weighed by cautious markets amid growing tensions in the Middle East and political uncertainty at home. NZD/USD bears are testing support at the 0.5860 area, down from last week's highs above 0.5900, against a firmer USD ahead of July’s US inflation data.
New Zealand’s Prime Minister, Christopher Luxon, survived a confidence vote on Wednesday, following a challenge from his defence minister, which adds to evidence of the divergences within the ruling National Party less than three months ahead of New Zealand’s elections
Beyond that, tensions in the Middle East flare up as reports of attacks on two vessels complicate the entangled US-Iran negotiating process even further. The risk-sensitive NZD is coming under pressure although volatility remains subdued, as traders await the release of July’s US Consumer Prices Index (CPI) report, due later on the day.
Technical Analysis: Key support is at the 0.5830 area
NZD/USD trades at 0.5865 after depreciating for three consecutive days, with bears aiming to break the bottom of the last two weeks' trading range, at the 0.5860 area. Momentum indicators in the daily chart remain at positive levels but show a fading impulse. The Relative Strength Index (14) is trending towards the 50 midline, and the Moving Average Convergence Divergence (MACD) line is attempting to cross below the Signal line, which is a bearish sign.
A clear break below the mentioned 0.5860 level would expose a key support area in the confluence of the ascending trendline from late June lows, now around 0.5835, and the 200-day SMA, a popular indicator, which would cross the price at around 0.5830. Further down, the next target is the late July lows, near 0.5760.
On the topside, immediate resistance emerges at the 78.6% Fibonacci retracement of June's selloff, at 0.5916, and beyond that, the May and June top near 0.6000.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
New Zealand Dollar Price Today The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies today. New Zealand Dollar was the strongest against the Swiss Franc.
USDEURGBPJPYCADAUDNZDCHFUSD0.03%-0.02%0.06%0.04%0.02%0.19%0.14%EUR-0.03%-0.05%0.02%0.02%-0.05%0.20%0.10%GBP0.02%0.05%0.06%0.05%0.02%0.24%0.16%JPY-0.06%-0.02%-0.06%-0.02%-0.06%0.15%0.08%CAD-0.04%-0.02%-0.05%0.02%-0.04%0.19%0.09%AUD-0.02%0.05%-0.02%0.06%0.04%0.22%0.16%NZD-0.19%-0.20%-0.24%-0.15%-0.19%-0.22%-0.07%CHF-0.14%-0.10%-0.16%-0.08%-0.09%-0.16%0.07% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
The Australian dollar is entering a potentially decisive phase against the US dollar. The Reserve Bank of Australia (RBA) left its cash rate unchanged at 4.35% at its August meeting, as expected, but its message was more hawkish than the decision itself suggested. Governor Michele Bullock warned that another rate increase remains possible if inflation proves persistent, particularly as geopolitical tensions threaten to generate fresh supply shocks.
Daily AUD/USD Chart - Source: ActivTraderFor the AUD/USD, the key question is whether this hawkish stance can support further gains. Australia’s relatively high interest rates could attract demand for the Australian dollar, but the pair’s direction will also depend on the Federal Reserve. With the US July CPI report approaching, the next move could hinge on whether American inflation strengthens expectations for easier Fed policy or instead reinforces a higher-for-longer outlook.
The RBA has paused, but the hiking cycle may not be overThe RBA’s decision to hold rates at 4.35% does not mean the inflation battle is over. The central bank is assessing the impact of three rate increases delivered earlier this year, while tighter financial conditions and a slowing economy gradually weigh on demand.
Inflation, however, remains above the RBA’s 2%-3% target range. The central bank expects headline inflation to ease to 3.6% by the end of 2026 and 2.6% by the end of 2027, while trimmed-mean inflation is projected to fall to 3.3% by year-end.
The trajectory is encouraging, but the RBA sees significant upside risks. The conflict in the Middle East could keep energy and commodity prices elevated, increasing transportation and production costs and encouraging companies to pass higher expenses on to consumers.
That is why Bullock’s comments matter. She challenged expectations that the RBA is finished tightening, saying rates could still need to rise if inflation remains too high. The result is a distinctly hawkish pause: policymakers have stopped raising rates for now but have deliberately kept the door open to further action.
For the AUD/USD, expectations may matter as much as the actual cash rate. If markets believe the RBA could resume tightening while other central banks move toward easing, the expected interest-rate differential can become a source of support for the Australian dollar.
Energy prices complicate the RBA’s outlookThe central bank expects subdued domestic demand and tighter financial conditions to bring inflation gradually back toward target. However, a prolonged Middle East conflict could keep global energy prices elevated and disrupt that process. The RBA has already warned that some businesses are experiencing higher costs and considering price increases.
Higher interest rates can weaken demand, but they cannot directly eliminate an oil supply shock. If energy prices remain elevated for long enough, however, the initial shock could spread through the economy by affecting business costs, consumer prices and inflation expectations.
This makes the RBA’s reaction function more important than the August decision itself. Stronger-than-expected inflation, renewed energy-price pressures or resilient domestic demand could revive expectations of another rate hike. Conversely, faster disinflation and a sharper economic slowdown would give policymakers more room to remain on hold.
The Australian dollar therefore has a potential monetary-policy tailwind, but whether that translates into a sustained AUD/USD rally will depend heavily on developments in the United States.
US CPI is the next major testThe July US Consumer Price Index represents the other half of the AUD/USD monetary-policy equation. Economists expected headline CPI to rise 0.1% month-on-month in July after falling 0.4% in June, with annual inflation easing to 3.4% from 3.5%. Core CPI, excluding food and energy, is expected to increase 0.2% on the month and 2.5% year-on-year.
A softer-than-expected report would strengthen the argument that US inflation is gradually moving lower despite recent supply shocks. That could encourage investors to price a less restrictive Federal Reserve, potentially pushing Treasury yields and the US dollar lower.
Such an outcome would be supportive for the AUD/USD. If Australian inflation remains persistent at the same time, investors could increasingly price a widening interest-rate differential in Australia’s favour.
The opposite scenario would pose a greater challenge to the Australian dollar. A stronger US CPI reading would suggest that inflation remains sticky and could force markets to adopt a more cautious view of Fed policy. Higher Treasury yields would then support the dollar and potentially reverse AUD/USD gains, even if the RBA maintains its hawkish stance.
The core CPI figure could prove particularly important. Energy prices can generate substantial monthly volatility, especially amid geopolitical tensions, but persistent core inflation would provide stronger evidence that underlying price pressures remain entrenched.
Inflation is also a political issue in the USThe importance of US inflation extends beyond the Federal Reserve and financial markets. The cost of living remains politically sensitive ahead of the November 2026 midterm elections, when voters will determine control of Congress.
Inflation is particularly relevant because President Donald Trump won the 2024 presidential election in part on promises to reduce the cost of living. A renewed acceleration in consumer prices could therefore create a difficult political backdrop for the administration, particularly if households continue to feel the cumulative impact of elevated prices.
A disappointing CPI report could reinforce concerns about purchasing power and make economic management an even more prominent issue for voters. Conversely, sustained disinflation could provide some relief for households and improve the administration’s economic narrative.
This does not mean the Fed will adjust monetary policy because of the elections. Its mandate remains focused on price stability and employment. However, the timing creates an additional layer of market sensitivity. The Fed meeting following September takes place only days before the midterms, potentially making the timing of any policy move more politically scrutinized.
For markets, this could make the path toward the end of the year particularly volatile. Stronger US inflation could constrain the Fed’s room to ease, while persistent Australian inflation could simultaneously keep the RBA open to further tightening.
Absolutely. I would merge the two sections into one genuine bottom-line section, rather than repeating the same bullish/bearish logic twice. The conclusion should synthesize the RBA message, the US CPI risk and the rate differential, then leave traders with the key signals to watch.
AUD/USD outlook: RBA-Fed rate differential holds the keyThe outlook for the AUD/USD ultimately comes down to the direction of the monetary-policy gap between the RBA and the Federal Reserve. The RBA’s August decision has kept the door open to further tightening, while the US CPI report could determine whether expectations for Fed policy move in the opposite direction.
The most supportive environment for the Australian dollar would be one in which Australian inflation proves persistent while US price pressures continue to moderate. Such a combination would increase the likelihood that the RBA keeps rates elevated or even raises them again, while giving the Fed greater scope to ease. A widening expected rate differential in Australia’s favour could then provide the AUD/USD with further upside potential.
The risk to this scenario is a renewed acceleration in US inflation. A stronger-than-expected CPI reading, particularly in the core measure, could push Treasury yields and the dollar higher as markets scale back expectations for Fed easing. If Australian inflation were simultaneously cooling, the relative advantage of the RBA’s hawkish stance would diminish, potentially putting renewed pressure on the AUD/USD.
For traders, the key is therefore not simply whether either central bank raises or cuts rates at its next meeting, but how expectations for their respective policy paths evolve. The RBA’s hawkish pause has provided the Australian dollar with a potential monetary-policy tailwind, but the US inflation data will determine whether that advantage widens or narrows.
The next major AUD/USD move could consequently depend on whether markets begin to see Australia and the United States moving into opposite phases of their inflation and interest-rate cycles. Core CPI, Treasury yields and changes in rate expectations will be crucial signals in determining which scenario gains the upper hand.
The AUD/USD pair prolongs its consolidative price move for the third straight day and trades around mid-0.7000s through the early European session on Wednesday. The Reserve Bank of Australia's (RBA) hawkish outlook continues to act as a tailwind for the Aussie, though a modest US Dollar (USD) keeps a lid on the currency pair.
The USD Index (DXY), which tracks the Greenback against a basket of currencies, preserves its weekly gains as inflation risks stemming from volatile oil prices back the case for at least one rate hike by the Federal Reserve (Fed). This, along with persistent geopolitical uncertainties, supports the Greenback's safe-haven status and contributes to capping the upside for the AUD/USD pair.
From a technical perspective, spot prices have been struggling to extend momentum beyond the 100-day Simple Moving Average (SMA) and break out through the 50% Fibonacci retracement level of the May-June decline. This suggests that the topside progress is slowing but not yet reversing as momentum indicators on the daily chart retain a mildly bullish near-term bias.
In fact, a firm Relative Strength Index (RSI) around 58 and a positive, though modest, Moving Average Convergence Divergence (MACD) reading hint that underlying momentum still favors a grind higher rather than a deeper pullback. A sustained move beyond the 50% retracement near 0.7071 will reaffirm the outlook and lift the AUD/USD pair to the 61.8% level at 0.7120.
Should bulls extend the advance, the next relevant barriers align at 0.7189 and 0.7276. On the downside, initial support is seen at the 100-day SMA around 0.7054, ahead of a Fibonacci cluster at 0.7023 and 0.6963. Meanwhile, deeper demand is expected at the 200-day SMA near 0.6931 and the structural low around 0.6867 if corrective pressure around the AUD/USD pair intensifies.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
AUD/USD daily chart
Economic Indicator Consumer Price Index (YoY) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
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The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
The British Pound (GBP) remains in a limited range at around 1.3500 against the US Dollar (USD) during the European trading session on Wednesday. The GBP/USD pair is expected to remain sideways, with investors awaiting the United States (US) Consumer Price Index (CPI) data for July in the North American session and the United Kingdom (UK) Q2 Gross Domestic Product (GDP) data on Thursday.
Investors expect the US CPI data to have a meaningful impact on Federal Reserve (Fed) interest rate expectations, as comments from Chairman Kevin Warsh in the July policy meeting press conference signaled heightened concerns regarding upside inflation risks.
Analysts at Danske Bank highlight that “today's most important data release will be the US July CPI,” with the bank forecasting “headline inflation at 0.2% MoM SA, 3.4% YoY (prior: -0.4% MoM, 3.5% YoY) and core inflation at 0.2% MoM SA, 2.5% YoY (prior: 0.0% MoM, 2.6% YoY).” The projections point to a modest month-on-month rebound in both headline and core price pressures, alongside slightly lower annual rates compared with June.
On Thursday, the UK Q2 GDP data is expected to arrive lower at 0.4% from 0.6% in the first quarter this year. On an annualized basis, the GDP growth is seen at 1.1%, faster than the previous reading of 0.9%.
GBP/USD Technical Analysis
GBP/USD trades at around 1.3500 above the 20-day exponential moving average (EMA) at 1.3437 and has broken through the downward resistance trend line, now offering support around 1.3465, which together suggests a constructive bullish bias while price consolidates near recent highs.
The Relative Strength Index (14) at about 60 keeps upward momentum intact without yet entering overbought territory, hinting that buyers still control the near-term direction as long as spot remains anchored above these supports.
On the downside, initial support is seen at the former trend-line break level near 1.3465, followed by the 20-day EMA at 1.3437, where a deeper pullback would be expected to attract dip-buying interest. Below the 20-day EMA, the pair would be exposed to the July 28 low at 1.3273. Looking up, the pair could advance towards 1.3600 if it rebounds above the August 10 high at 1.3530.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Gross Domestic Product (QoQ) The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
The euro and pound are holding their ground against the US dollar, although the momentum in European currencies has become more subdued following their previous gains. Market participants are reluctant to establish new positions ahead of the release of the July US inflation report, which could alter expectations for the Federal Reserve’s future policy. Recent labour market data is also encouraging caution: a weak ADP report and a decline in the ISM employment component have added to signs of a gradual cooling in the US labour market.
Today, the main focus will be on the US Consumer Price Index (CPI). According to forecasts, annual inflation may slow to 3.4% from 3.5%, while monthly prices are expected to rise by 0.1% after falling 0.4% a month earlier. Core CPI is forecast at 2.5% year-on-year and 0.2% month-on-month. Weaker-than-expected figures could strengthen expectations of monetary policy easing by the Fed and put additional pressure on the dollar. If inflation comes in above forecasts or proves more persistent, the US currency could receive fresh support. Final inflation figures for Germany and Italy will also be released in Europe, although their impact is likely to remain limited in the absence of significant deviations from preliminary estimates. Therefore, US inflation data is likely to be the main driver for EUR/USD and GBP/USD during today’s session.
EUR/USD In recent trading sessions, EUR/USD has been moving within a relatively narrow range of 1.1500–1.1580. Technical analysis suggests the possibility of another test of the lower boundary, as a Dark Cloud Cover pattern has formed on the daily timeframe. If sellers manage to establish a position below 1.1500, the pair could resume its downward move towards 1.1430–1.1460. Conversely, weaker-than-expected US inflation data could push the price towards 1.1600–1.1620.
Key events for EUR/USD:
today at 09:00 (GMT+3): German Consumer Price Index (CPI); today at 11:00 (GMT+3): Italian Harmonised Index of Consumer Prices (HICP); today at 15:30 (GMT+3): US Consumer Price Index (CPI).
GBP/USD GBP/USD buyers managed to push the pair to a new local high around 1.3500. Technical analysis indicates the possibility of further gains towards 1.3540–1.3560 if the 1.3480–1.3500 area is established as support. Stronger-than-expected US inflation data could support the dollar and trigger another test of the 1.3400 level in GBP/USD.
Key events for GBP/USD:
tomorrow at 09:00 (GMT+3): UK GDP; tomorrow at 14:00 (GMT+3): NI’s monthly GDP tracker; tomorrow at 21:00 (GMT+3): US federal budget execution report.
Overall, EUR/USD and GBP/USD are holding their ground after their previous gains, but their next direction will largely depend on today’s US inflation report. Weaker CPI data could strengthen expectations of Fed easing and put additional pressure on the dollar, creating room for further gains in European currencies. If inflation comes in above forecasts, however, the US currency could receive fresh support, increasing the likelihood of EUR/USD and GBP/USD returning to their nearest support levels.
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UOB’s Quek Ser Leang and Lee Sue Ann report EUR/USD holding near 1.1540 after a quiet session, with momentum indicators mostly flat. Intraday, they expect consolidation between 1.1530 and 1.1560, but a break above 1.1560 could trigger a quick move to 1.1580. Over the next 1–3 weeks, further gains require a close above 1.1580 to open 1.1600 and beyond.
Euro holds but needs a breakout"24-HOUR VIEW: When EUR was at 1.1545 in the early Asian session yesterday, we noted that “momentum indicators are mostly flat,” and we expected EUR “to trade in a range between 1.1530 and 1.1560.” EUR subsequently traded within a tight range of 1.1530/1.1549, closing largely unchanged at 1.1540 (-0.02%). The price action provides no fresh clues, and we continue to expect EUR to trade between 1.1530 and 1.1560. That said, should EUR break above 1.1560, it could trigger a quick rise toward 1.1580."
"1-3 WEEKS VIEW: We continue to hold the same view as yesterday (11 Aug, spot at 1.1545). As highlighted, “the hurdle for further gains has risen,” and EUR “must close above 1.1580 before a move to 1.1600 and beyond can be expected." On the downside, if EUR breaks below 1.1515 (no change in ‘strong support’ level), it would indicate that EUR is not rising further"
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
The Euro (EUR) trades marginally lower at around 1.1534 against the US Dollar (USD) at the start of the European trading session on Wednesday. The major currency pair edges down as investors turn cautious ahead of the United States (US) Consumer Price Index (CPI) data for July, which will be published at 12:30 GMT.
At press time, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades slightly higher to near 99.90.
According to estimates, the US headline CPI grew at an annual pace of 3.4%, slower than 3.5% in June. In the same period, the core CPI – which excludes volatile food and energy items – is also seen lower at 2.5% Year-on-Year (YoY) from the previous reading of 2.6%. On a monthly basis, the headline and core inflation grew by 0.1% and 0.2%, respectively.
Signs of price pressures cooling down would ease fears of Federal Reserve (Fed) interest rate hikes further, which have already subsided significantly in the past few days, following the release of weak US Nonfarm Payrolls (NFP) figures for July.
US labor market stumbles as July payrolls disappointAccording to TD Securities, the latest US employment report marked a clear setback for the labor market. The bank highlights that July payrolls "surprised sharply to the downside on Friday, posting -23k job gains," with the weakness compounded by "negative revisions subtracting 103k jobs from May and June." While the unemployment rate "declined again to 4.1%," TD Securities stresses this occurred "for 'bad reasons' as the participation edged down again," underscoring a deterioration in labor force engagement rather than an improvement in underlying job conditions.
Meanwhile, the Euro (EUR) trades cautiously due to rising energy prices amid restricted oil supply in the wake of Middle East tensions. Squeezed energy supply through the Strait of Hormuz and Bab al-Mandab Strait has boosted energy prices.
Given that the Eurozone relies heavily on energy imports to meet its needs, higher oil prices bode poorly for the shared currency.
US Dollar FAQs The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
The geopolitical risks are making gold look better. Defensive assets remain in demand on Wednesday following fresh attacks on shipping in the Middle East and a North Korean missile launch. Meanwhile, the gold price gained strength while bitcoin was virtually unchanged. The additional uncertainty comes from the rising price of oil. The price of Bitcoin may face challenges in near term if these risks reduce demand for speculative assets.
Bitcoin Price Forecast as ETF Demand Meets Selling Near $66,000 Bitcoin dropped to approximately $63,500 on Tuesday and continued to trade in the $62,000 to $66,000 range for the past few weeks. The price has increased by approximately 2% in the past week despite consistent demand by US spot Bitcoin ETFs. The response suggests that so far there has been no sufficient momentum to trigger stronger recovery from the fresh buying.
The recent ETF demand has met selling from the miners and corporate holders. This supply has absorbed much of institutional buying. The trading volume and implied volatility have also decreased to multi-year lows. When the activity is low, Bitcoin is likely to stay in tight range but it can also be a sign of sharp move once a strong catalyst comes.
Commodity markets have been unusually active over the past week, but the reasons behind the moves differ considerably from one market to another.
Copper is being driven largely by physical tightness and the movement of inventories into the United States. Gold has responded to weaker US labour-market data and changing expectations for Federal Reserve policy. Platinum continues to reflect a combination of precious-metal flows and a structurally tight physical market, while crude oil remains dominated by geopolitical risk and disruption around the Strait of Hormuz.
For traders, the important point is that these markets cannot be analysed through one common macro lens. Each commodity is responding to a different mix of supply, demand, monetary policy and geopolitical risk.
Copper: Tight supply is more important than strong growthCopper has remained exceptionally firm, trading around $6.65 per pound in the US and close to $14,400 per tonne on the London Metal Exchange.
COMEX copper reached a record closing price of $6.703 per pound on 5 August, but the strength in the market is not simply a story of accelerating global growth.
The more important development is the tightening physical market outside the United States.
More than 200,000 tonnes of copper arrived in the US during July, the largest monthly inflow in at least 12 years. US-based COMEX and LME warehouses have consequently accumulated more than 740,000 tonnes of copper.
By late July, CME warehouses alone held around 58% of visible global exchange inventories.
The reason is largely related to expectations surrounding possible US tariffs on refined copper. Traders have had an incentive to move metal into the United States before any change in tariff policy, effectively pulling available copper away from other parts of the world.
That geographical shift matters.
LME copper inventories fell from around 238,350 tonnes on 4 August to approximately 214,550 tonnes by 11 August. That is a fall of close to 10% in just one week.
The futures curve is also reinforcing the same message.
LME cash copper has been trading around $208 per tonne above the three-month contract. This is known as backwardation and is normally associated with tight immediate supply. Buyers are willing to pay more for copper today than for copper delivered several months from now.
Chinese exchange inventories have also fallen sharply from their March highs, although the demand picture in China is not entirely bullish. Manufacturing activity remains relatively soft, meaning the current copper strength is not being driven by a straightforward boom in Chinese industrial growth.
There are also continuing supply risks.
The Democratic Republic of Congo has introduced restrictions on exports of some copper concentrates, while production problems at major operations such as Grasberg remain part of the broader supply story.
Meanwhile, long-term demand remains supportive.
Electricity grids, electric vehicles, renewable energy infrastructure and the rapid expansion of AI data centres all require significant amounts of copper.
The overall picture is therefore unusual: global growth signals remain mixed, yet the physical copper market is tight.
For traders, that makes inventory levels, exchange spreads and the location of physical metal particularly important.
Gold: Weak US employment changes the rate storyGold has also had a strong week, but for very different reasons.
Spot gold is trading around $4,390 per ounce, compared with roughly $4,086 on 4 August. That represents a gain of more than 7% in just over a week.
The main catalyst has been a change in expectations for US monetary policy.
July's US employment report was significantly weaker than expected. Nonfarm payrolls were forecast to increase by around 80,000, but instead fell by 23,000.
May and June payroll figures were also revised down by a combined 103,000 jobs.
The unemployment rate remained relatively low at 4.1%, but the broader message from the report was that employment growth is losing momentum.
Markets responded by reducing expectations for another Federal Reserve rate increase.
Immediately after the jobs report, the probability of a September rate increase fell from around 57% to approximately 44%.
That matters enormously for gold.
Gold produces no yield, so when markets expect lower interest rates and lower bond yields, the opportunity cost of holding gold falls. A weaker US dollar can provide an additional tailwind because gold becomes cheaper for buyers using other currencies.
Geopolitical uncertainty has added another layer of support.
The continuing situation around Iran and the Strait of Hormuz has maintained demand for safe-haven assets, although the relationship is not entirely straightforward.
Higher geopolitical risk can support gold directly, but if the same risk drives oil prices significantly higher, it can also increase inflation expectations. If higher inflation forces the Federal Reserve to remain restrictive, Treasury yields could rise and create a headwind for gold.
Central-bank demand remains another important part of the picture.
China added around 20 tonnes of gold to its official reserves during July, while global gold-backed ETFs attracted roughly $3 billion of net inflows during the month. ETF holdings increased by approximately 23 tonnes.
This means investment demand is improving at the same time that central banks remain active buyers.
The next major psychological level is around $4,500 per ounce.
The broader gold story, however, remains centred on the Federal Reserve.
If US data continues to weaken without a corresponding acceleration in inflation, the environment remains supportive for gold. If inflation stays high enough to force further tightening, the market could become more vulnerable.
Platinum: A precious metal with an industrial supply problemPlatinum has been another strong performer, trading around $1,760 to $1,770 per ounce after gaining 7.1% in a single session on 4 August.
Platinum is more complicated than gold because it sits between the precious-metals and industrial-metals markets.
It can benefit from lower interest-rate expectations and a weaker dollar, but it is also heavily influenced by automotive demand, industrial activity and physical supply.
The physical market remains structurally tight.
Current forecasts suggest platinum demand of around 7.674 million ounces in 2026 against supply of approximately 7.377 million ounces.
That leaves an expected deficit of roughly 297,000 ounces.
If realised, this would mark the fourth consecutive annual platinum deficit.
Above-ground inventories are forecast to fall to around 1.747 million ounces by the end of the year, equivalent to less than three months of global demand.
That leaves the market relatively exposed to further supply disruption.
South Africa remains central to the platinum story, producing roughly 70% of global mine supply. This geographical concentration means any operational, labour or power-related disruption can have an outsized impact on the market.
Automotive demand remains one of platinum's most important demand sources.
Around 2.959 million ounces of demand is expected to come from the automotive sector this year. Hybrid vehicle production is forecast to rise by roughly 12%, which is important because hybrids still require catalytic converters.
Battery electric vehicles remain a longer-term risk because they do not use conventional exhaust systems and therefore do not require traditional autocatalysts.
Industrial demand is another supportive factor, with consumption forecast to increase by around 9%.
Jewellery is the weaker part of the picture. Global platinum jewellery demand is expected to decline by around 12%, with Chinese demand particularly soft.
Longer term, hydrogen technologies and potential AI-related PGM applications could create additional demand, although these areas should still be viewed as developing themes rather than dominant current drivers.
For now, the most important point is that platinum combines improving macro conditions with a physical market that remains in deficit.
That makes it very different from gold, where monetary policy dominates the discussion.
Crude Oil: Hormuz is driving the marketCrude oil is currently the most headline-sensitive of the major commodity markets.
WTI is trading around $84 per barrel, while Brent is close to $90.
The central issue is Iran and the Strait of Hormuz.
Roughly one-fifth of global petroleum flows normally pass through the Strait, making it one of the most strategically important shipping routes in the world.
WTI fell to around $75.77 on 4 August when markets became more optimistic that progress towards a US-Iran agreement could reduce regional tensions and restore more normal shipping conditions.
That optimism faded quickly.
As doubts over an agreement increased, oil recovered above $80 and WTI subsequently traded as high as approximately $84.60.
The physical disruption is significant.
Around 5.5 million barrels per day of Middle Eastern oil production was estimated to have been offline on average during July. That is more than 5% of global oil consumption.
Around 600,000 barrels per day of regional production could also remain offline through 2027, according to current projections.
This is why oil has been reacting so aggressively to every development surrounding Iran and Hormuz.
The market is not simply pricing political uncertainty. It is pricing whether crude can physically reach global consumers.
The US inventory picture provides an important bearish counterweight.
The latest official EIA data showed commercial crude inventories increasing by around 2.5 million barrels to approximately 407 million barrels.
Cushing inventories also rose by around 2.4 million barrels.
More recent preliminary API data indicated an even larger build of around 9.1 million barrels, although that figure should be treated as preliminary until confirmed by official government data.
Refined products tell a different story.
US distillate inventories are around 107.2 million barrels, close to a 30-year seasonal low. Tight diesel availability and refinery disruptions have therefore helped keep refined-product markets firm even while headline crude inventories have increased.
OPEC+ is another bearish consideration.
The group has agreed to an additional production adjustment of around 188,000 barrels per day from September.
In normal conditions, extra OPEC+ supply would place downward pressure on crude prices.
The problem today is that additional production does not fully resolve a logistics crisis. Producing more oil is of limited benefit if shipping routes remain heavily disrupted.
That is why geopolitical risk continues to outweigh some of the more conventional bearish supply signals.
The longer-term risk is demand destruction.
If oil prices remain elevated for long enough, higher fuel costs can weaken consumer demand, increase business costs and eventually slow economic activity. At that point, the same price increase caused by a supply shortage can begin to reduce demand.
Four commodities, four different storiesThe recent moves across commodities demonstrate why traders need to understand the underlying transmission mechanism rather than simply watching whether prices are rising or falling.
Copper is being driven by tightening physical availability, falling non-US inventories and structural demand from electrification and technology.
Gold is being driven by weaker US employment, changing Federal Reserve expectations, the dollar, central-bank buying and geopolitical risk.
Platinum is being supported by repeated market deficits, limited inventories and resilient industrial and automotive demand.
Crude oil is dominated by physical Middle Eastern supply disruption and the Strait of Hormuz, with rising US inventories and additional OPEC+ production acting as the main bearish counterweights.
The common lesson is that commodity markets rarely move for one reason alone.
The strongest trading opportunities often emerge when several drivers begin to point in the same direction. Equally, the greatest risks often appear when price momentum looks strong but the underlying fundamentals start to diverge.
For traders, the task is therefore not simply to ask whether a commodity is bullish or bearish.
The more useful question is:
What is driving the move, and is that driver getting stronger or weaker?
EUR/JPY moves little for the second successive day, trading around 183.90 during the Asian hours on Wednesday. The currency cross is maintaining a mildly bearish near-term tone as it slips beneath the 50-day Exponential Moving Average (EMA) while holding above the shorter nine-day EMA. This alignment suggests the recent bounce is vulnerable to renewed selling while intraday dips still find some demand.
The 14-day Relative Strength Index (RSI) at 48.21 sits close to its midline, hinting at neutral momentum that neither strongly favors a continuation lower nor an immediate bullish reversal.
The primary support lies at the nine-day EMA at 183.46. A successful break below the short-term moving average would reinforce the bearish bias and put downward pressure on the EUR/JPY cross to fall toward the eight-month low of 179.37, reached on August 3, followed by the nine-month low of 175.70.
On the upside, the EUR/JPY cross could rise toward the primary resistance at the 50-day EMA at 184.54. Further advances above the medium-term moving average would cause a bullish emergence and support the currency cross to explore the region around the all-time high of 187.95, which was recorded on April 17.
Yen steadies as intervention gains hold after recent slideStrategists at Scotiabank note that the Yen is holding firm after the latest bout of volatility, with the currency “steady and showing signs of stabilization following Monday’s worrisome decline that hinted to renewed pressure and a rapid reversal of its recent intervention-driven gains.” They suggest the current price action indicates those intervention gains are, for now, being preserved despite lingering market concerns.
EUR/JPY: Daily Chart(The technical analysis of this story was written with the help of an AI tool. Know more.)
Euro Price Today The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
USDEURGBPJPYCADAUDNZDCHFUSD0.07%0.00%0.08%0.05%0.11%0.24%0.17%EUR-0.07%-0.06%0.00%-0.02%0.02%0.18%0.10%GBP-0.01%0.06%0.04%0.03%0.06%0.24%0.16%JPY-0.08%0.00%-0.04%-0.03%0.01%0.15%0.09%CAD-0.05%0.02%-0.03%0.03%0.04%0.20%0.12%AUD-0.11%-0.02%-0.06%-0.01%-0.04%0.16%0.12%NZD-0.24%-0.18%-0.24%-0.15%-0.20%-0.16%-0.06%CHF-0.17%-0.10%-0.16%-0.09%-0.12%-0.12%0.06% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Gold prices rose in Philippines on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 8,670.10 Philippine Pesos (PHP) per gram, up compared with the PHP 8,607.13 it cost on Tuesday.
The price for Gold increased to PHP 101,126.10 per tola from PHP 100,391.80 per tola a day earlier.
Unit measure
Gold Price in PHP
1 Gram
8,670.10
10 Grams
86,700.75
Tola
101,126.10
Troy Ounce
269,670.00
FXStreet calculates Gold prices in Philippines by adapting international prices (USD/PHP) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices rose in Saudi Arabia on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 531.34 Saudi Riyals (SAR) per gram, up compared with the SAR 527.37 it cost on Tuesday.
The price for Gold increased to SAR 6,197.29 per tola from SAR 6,151.13 per tola a day earlier.
Unit measure
Gold Price in SAR
1 Gram
531.34
10 Grams
5,313.32
Tola
6,197.29
Troy Ounce
16,526.76
FXStreet calculates Gold prices in Saudi Arabia by adapting international prices (USD/SAR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices rose in United Arab Emirates on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 519.70 United Arab Emirates Dirhams (AED) per gram, up compared with the AED 515.82 it cost on Tuesday.
The price for Gold increased to AED 6,061.65 per tola from AED 6,016.47 per tola a day earlier.
Unit measure
Gold Price in AED
1 Gram
519.70
10 Grams
5,196.98
Tola
6,061.65
Troy Ounce
16,164.42
FXStreet calculates Gold prices in United Arab Emirates by adapting international prices (USD/AED) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices rose in Pakistan on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 39,250.39 Pakistani Rupees (PKR) per gram, up compared with the PKR 38,973.66 it cost on Tuesday.
The price for Gold increased to PKR 457,791.20 per tola from PKR 454,581.10 per tola a day earlier.
Unit measure
Gold Price in PKR
1 Gram
39,250.39
10 Grams
392,497.70
Tola
457,791.20
Troy Ounce
1,220,827.00
FXStreet calculates Gold prices in Pakistan by adapting international prices (USD/PKR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
Gold prices rose in India on Wednesday, according to data compiled by FXStreet.
The price for Gold stood at 13,493.33 Indian Rupees (INR) per gram, up compared with the INR 13,402.99 it cost on Tuesday.
The price for Gold increased to INR 157,382.80 per tola from INR 156,329.80 per tola a day earlier.
Unit measure
Gold Price in INR
1 Gram
13,493.33
10 Grams
134,932.60
Tola
157,382.80
Troy Ounce
419,695.80
FXStreet calculates Gold prices in India by adapting international prices (USD/INR) to the local currency and measurement units. Prices are updated daily based on the market rates taken at the time of publication. Prices are just for reference and local rates could diverge slightly.
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
(An automation tool was used in creating this post.)
TL;DR: Gold has kept climbing even as Brent rebounded from $70 toward $90, a divergence that reflects markets betting the Fed won’t tighten again without proof oil is feeding into core inflation — and Wednesday’s CPI is the first test of that bet.
Gold Is Defying the Oil Signal Gold heads into Wednesday’s US CPI release with an unusual message from cross-asset markets. Brent has rebounded from around $70 in July to near $90 this week, yet Gold has continued to climb. At the same time, the 10-year Treasury yield is still contained below 4.75%, while markets put roughly even odds on a September Fed hold. Oil has surged, but rate markets haven’t followed.
That matters because the relationship looked very different earlier this year. During the first Iran-war shock, higher oil translated much more directly into inflation fears, higher yields, and a more hawkish Fed outlook — Gold often struggled against that combination. This time, markets appear much less willing to assume another energy shock automatically means another round of tightening.
So Wednesday’s CPI isn’t simply an inflation release. It’s the first test of a broader market bet: can oil rise toward $90 without forcing the Fed back toward tightening? Gold is currently trading as though the answer may be yes.
Core CPI Could Return All the Way to Pre-War Levels Jan’26 Feb’26 Mar’26 Apr’26 May’26 Jun’26 Headline CPI (y/y) 2.4 2.4 3.3 3.8 4.2 3.5 Core CPI (y/y) 2.5 2.5 2.6 2.8 2.9 2.6 Consensus expects headline CPI to slow from 3.5% to 3.4% y/y, while core inflation is forecast to edge down from 2.6% to 2.5%. The monthly progression shows how far both measures have traveled since the first oil shock:
A 2.5% core reading would be significant because it would complete a full round trip back to levels seen before the Iran war disrupted the inflation picture. Core CPI was 2.5% in January and February, then accelerated to 2.6% in March, 2.8% in April, and 2.9% in May, before easing back to 2.6% in June — a July reading of 2.5% would therefore suggest underlying inflation has effectively unwound the entire first-war acceleration.
If today’s data meet consensus, markets would have strong evidence the first oil shock didn’t permanently dislodge underlying inflation. But there’s a catch.
Today’s CPI Comes From a World That Has Already Changed July inflation data were collected before the current Hormuz escalation reached its most acute phase. The latest tanker attacks, collapsing shipping crossings, the reparations standoff between Washington and Tehran, and Brent’s push back toward $90 are largely early-to-mid-August developments — they sit mostly outside today’s CPI window.
That means a clean 2.5% core reading wouldn’t prove inflation has shrugged off the latest energy shock. It would prove something narrower, but still important: core inflation managed to return to pre-war levels during the calmer period between two oil shocks. That distinction is crucial because this second episode isn’t identical to the first.
This Oil Shock Is Smaller — But Potentially More Persistent The first Iran-war shock was violent and immediate. Brent surged toward $120, and March CPI recorded a 10.9% m/m jump in energy prices, the largest since September 2005. Gasoline posted its largest monthly increase since the series began in 1967.
The current move is less severe in magnitude — Brent has rebounded from around $70 to $90 rather than exploding toward $120. But the character of the disruption is different. This is increasingly a prolonged negotiation and shipping crisis, with confirmed tanker strikes, sharply reduced Hormuz crossings, and a widening diplomatic standoff, rather than simply a repeat of a fresh outright closure.
That creates a genuine open question for inflation: a violent energy spike can fade quickly if physical disruption is resolved, while a smaller but persistent increase in transportation, insurance, and energy costs could potentially bleed into underlying prices differently. Markets don’t yet know which version they’re dealing with.
August CPI Is Where the Hawkish Thesis Starts Getting Tested That’s why today’s CPI is best treated as a baseline. The more consequential test comes with August CPI on September 11, because that release will begin incorporating the current rebound in energy prices. Even then, direct energy effects should show up in headline inflation sooner than in core — second-round pass-through through transportation, production costs, goods, and services can take longer. But August will still provide the first meaningful evidence on whether underlying inflation can remain anchored while Brent trades around $90.
That question goes directly to the hawkish argument advanced by officials such as Neel Kashkari, Lorie Logan, and Beth Hammack, as well as dissenting voices at the latest FOMC meeting. Their concern isn’t simply that energy prices temporarily lift headline CPI — it’s that prolonged energy and supply pressure eventually spreads into core inflation and forces the Fed to maintain or increase restraint.
The next comparison is therefore unusually clean: if core inflation stays around 2.5–2.6% even after the renewed oil shock begins entering data, it would provide strong evidence energy pressure is staying largely contained. If core starts accelerating again, hawks would have much stronger evidence that second-round effects are taking hold. Today tells markets where that experiment starts.
Weak Payrolls Have Raised the Bar for Another Hike The Fed is also confronting a labor backdrop similar to the start of the year, when markets and policymakers were debating rate cuts. July payrolls contracted, while May and June employment were revised substantially lower. That has made another rate hike much harder to justify, particularly with policy already at 3.50–3.75%.
There’s now a genuine reason for the Fed to eventually reduce restraint if labor deterioration continues. But inflation prevents an immediate pivot — core CPI around 2.5–2.6% is still above target, while renewed oil pressure creates another potential upside risk. The Fed therefore has little room to cut now, even as the case for additional hikes has weakened.
That leaves a fairly natural policy response if today’s CPI lands close to consensus: hold and wait. That would be the baseline as the Fed assesses August NFP on September 4, then August CPI on September 11, before the September 15–16 FOMC meeting. That policy expectation is supportive for Gold — another hike becomes harder to justify, while weaker labor conditions keep eventual easing risk alive.
Gold Is Trading the Rate Market’s Skepticism Gold’s rally therefore looks less like a pure geopolitical or inflation-fear trade and more like a bet on the rate market refusing to follow oil. Brent has surged, but Treasury yields haven’t broken higher. Fed hike pricing has barely moved. Gold has strengthened anyway.
If markets genuinely believed $90 oil was about to restart a tightening cycle, those signals should look different. Instead, investors appear to be saying the Fed now needs evidence of actual pass-through into core inflation before it can justify more tightening — especially after labor-market deterioration. That gives Gold a relatively favorable setup into CPI: a benign reading doesn’t need to prove the latest oil shock is harmless. It only needs to avoid giving hawks enough evidence to rebuild tightening expectations today.
ActionForex’s Technical View on Gold The technical problem is that Gold has already reached an important resistance zone. The rebound from 3,942.43 is pressing 4,417.62, the 161.8% projection of 3,942.43 to 4,203.21 from 3,995.82. At the same time, price is approaching the medium-term falling trendline that has defined the broader decline this year, making the reaction to CPI potentially sharper than usual.
As long as 4,317.72 support holds, the near-term outlook stays constructive. A core CPI reading around 2.5–2.6%, particularly if yields remain contained, should allow Gold to keep challenging current resistance. A decisive break would open room toward 4,575.31, the 38.2% retracement of the decline from 5,598.75 to 3,942.43.
But positioning near resistance creates clear downside risk if inflation surprises substantially higher. A strong core CPI print could revive tightening expectations and trigger a sharp rejection. A break below 4,317.72 would indicate the rebound has lost near-term momentum, bringing a deep and swift pullback to the 55 4H EMA near 4,244.25 and possibly below.
That makes the CPI outcome less symmetric than headline consensus suggests. A broadly expected reading keeps the existing Gold thesis intact; it probably takes a material upside surprise to seriously disrupt it.
Today Is the First Check. September Is the Bigger One. Wednesday’s CPI can tell markets whether underlying inflation returned to pre-war levels before the latest oil rebound. It can’t yet tell them whether inflation will stay there. That’s why Gold’s current rally is fundamentally a bet on patience — markets are betting the Fed won’t react to $90 oil alone without evidence that higher energy prices are once again contaminating core inflation.
A 2.5–2.6% reading today would reinforce that view and likely keep Gold’s rebound alive, even if current resistance slows immediate upside. A substantial upside surprise would challenge it quickly. But the bigger verdict comes in September: today’s July CPI decides whether Gold can keep betting against another Fed hike, while August CPI will begin deciding whether $90 oil eventually proves that bet wrong.
Key Takeaways Gold has climbed even as Brent rebounded from $70 to $90, a divergence from earlier this year when oil spikes reliably lifted yields and hurt Gold. A 2.5% core CPI print today would complete a full round trip back to pre-war inflation levels, but the data predates the most acute phase of the Hormuz escalation. August CPI on September 11 is the more consequential test, since it will be the first release to capture the current oil rebound’s actual pass-through into prices. Weak payrolls and heavy downward revisions have raised the bar for another hike, but above-target core inflation still rules out an immediate Fed pivot to cuts. Gold faces resistance at 4,317.72-4,417.62; an in-line CPI print keeps the rebound intact toward 4,575.31, while a hot surprise risks a swift pullback to 4,244.25.
ActionForex
ActionForex.com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.
Key Points:The US CPI report will likely drive the next move in gold and silver. Gold maintains bullish potential toward $4,500 while holding above $4,300. Silver’s breakout above $64 brings the $72 resistance into focus.
In this article:Gold
+0.03%
Gold ForecastSilver
-0.53%
Silver ForecastThe geopolitical tensions support the safe haven assets on Wednesday. The shipping attacks in the Middle East raised fears of supply disruptions and escalation. The missile launch by North Korea increased the uncertainty. The gold (XAU) price rebounds higher to $4,400 after a slight correction on Tuesday. These risks could also support silver but its industrial demand can limit any safe-haven gains.
The rising oil prices produce a mixed outlook for gold and silver (XAG). The higher energy costs can boost inflation and demand for precious metals as an inflation hedge. But if inflation remains high, the Fed could also be tempted to keep rates up or hike them again. The increase in interest rates tends to boost bond yields which can put pressure on precious metals.
The next move in gold and silver will likely be driven by the upcoming US CPI report. A softer inflation could weaken the U.S. dollar and reduce expectations of rate hike in September. Silver can benefit more if the decline in the rate expectations also improves the economic sentiment. But the stronger inflation can support the US dollar and US Treasury yields, which can increase the pressure on precious metals despite the geopolitical risks.
Gold Eyes $4,500 as US CPI Drives the Next Move The daily chart for spot gold shows that the price reversed on Tuesday after marking a high at $4,435. However, the price showed positive momentum again on Wednesday, which indicates that it may continue to rally toward the 200-day SMA at the $4,500 level. The RSI is also slightly below the 70 level, which indicates further upside in the short term.
But the market is now waiting for the CPI release, which may drive the next move in the gold market. The key reversal candle on Tuesday was due to the strong resistance near $4,400, which was discussed in the previous analysis.
A break above $4,500 will likely open the door for a strong rally toward the $5,000 area, which is defined by the descending trend line of the wedge formation.
The importance of the current support is also observed on the weekly chart. The chart shows that this support is defined by the ascending trend line. This line stretches from the October, 2023 low. A break above $5,000 will indicate that the bottom is confirmed and it will likely introduce a strong rally in the gold market toward new record highs.
The 4-hour chart for spot gold also shows that the price is attempting to break the key resistance at $4,370. This resistance formed the support on Wednesday. The price must remain above this level in the short term to build the strength to break the $4,435.
Silver Breaks Above $64 as Bulls Target $72 The daily chart for spot silver also shows a key reversal candle on Tuesday. But the price has already broken above the $64 area in the short term, which opens the door for a rally toward $72.
If the price continues to trade above $60, a strong move toward the $72 area is likely. The RSI also remains below the 70 level, which indicates the possibility of upside momentum in the silver market in the short term.
On the other hand, a break below the $60 level will likely push silver prices back toward the $55 and $50 areas.
The 4-hour chart for spot silver also shows strong positive structure within the descending wedge pattern. The immediate resistance in spot silver remains the $70-$72 area.
A break above $72 will likely push spot silver prices toward the $90 level. But a break below the $60 level will likely cause the price to continue dropping toward the lower boundary of the descending wedge pattern in the $50-$55 area.
US CPI Holds the Key for Gold and Silver Gold and silver remain supported by geopolitical risks and rising oil prices. But the US CPI report will likely decide the next major move. Gold must remain above $4,300 to target $4,500. A break above $4,500 could open the way toward $5,000. Silver remains positive above $60 and could test the $70-$72 area. A break above $72 may push silver toward $90. The stronger inflation could lift the US dollar and Treasury yields and put pressure on both metals.
Read more: Weak Dollar Supports Rebound Ahead of US CPI
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Muhammad Umair is a finance MBA and engineering PhD. As a seasoned financial analyst specializing in currencies and precious metals, he combines his multidisciplinary academic background to deliver a data-driven, contrarian perspective. As founder of Gold Predictors, he leads a team providing advanced market analytics, quantitative research, and refined precious metals trading strategies.
Silver price (XAG/USD) trades 1.1% higher at around $65.40 during the Asian trading session on Wednesday. The white metal reflects strength ahead of the United States (US) Consumer Price Index (CPI) data for July, which will be published at 12:30 GMT.
According to estimates, the US headline CPI grew at an annual pace of 3.4%, slower than 3.5% in June. In the same period, the core CPI – which excludes volatile food and energy items – is also seen lower at 2.5% Year-on-Year (YoY) from the previous reading of 2.6%.
On a monthly basis, the headline and core inflation grew by 0.1% and 0.2%, respectively.
Investors will pay close attention to the US inflation data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook. In the latest monetary policy announcement, Chairman Kevin Warsh warned of upside inflation risks, adding that the board is committed to bringing inflation down to the 2% target.
Meanwhile, surging oil prices due to restricted global energy supply on the back of Middle East conflicts will likely limit the Silver price’s upside.
According to data from Kpler, shipping traffic through the Strait of Hormuz, a vital passage to almost 20% of global energy supply, was recorded at just six vessels on August 10, down from a recent 10-day average of about 11. This remains a massive decline from pre-war levels of 130 to 140 ships daily, Reuters reports.
On Tuesday, the CME Group said that it will allow round-the-clock trading in its 100-ounce silver futures contract from September after seeing a strong response for the 1-ounce Gold futures contract, which began on July 24, Reuters reports.
Silver Technical Analysis
In the daily chart, XAG/USD trades at $65.53, extending its advance above the 20-day exponential moving average (EMA) at $61.28 and reinforcing a bullish near-term bias.
Price action has steadily pushed away from the prior consolidation zone, while the Relative Strength Index (14) at 61.21 stays in positive territory but short of overbought, hinting that upside momentum remains constructive without being overstretched.
On the downside, immediate support is seen at the 20-day EMA around $61.28, which underpins the broader rebound and would be the first line of defense on any pullback. Looking up, the white metal would attempt to extend the advance towards the June 17 high at $71.56 if it manages to break above the August 10 high at $66.59.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Gold is back on the bids and looks to regain the $4,400 level in Wednesday’s Asian trading, having found buyers near the $4,350 region. All eyes remain on the high-impact US Consumer Price Index (CPI) data, which could determine if Gold stretches higher or corrects sharply.
Gold’s fate hinges on the US CPI inflation reportGold has regained its upside momentum, following a brief profit-taking pullback from the ten-week high of $4,435 reached on Tuesday.
Nothing appears to have changed in the fundamental backdrop as the deadlock between the United States (US) and Iran over the talks on the reopening of the Strait of Hormuz and the US and Yemen's Iran-aligned Houthis’ separate attacks on shipping continues to keep Oil prices and inflation concerns elevated.
However, that fails to deter Gold bulls, as they remain hopeful of another benign inflation report from the US, following the weak Nonfarm Payrolls print for July, which helped markets dial down expectations on a US Federal Reserve (Fed) interest rate hike in September.
At the press time, the odds of a September Fed rate hike stand at a coin-toss level, according to the CME Group’s FedWatch Tool, shifting the focus back to the US CPI data release, particularly the core inflation readings, as they are shielded from the war-driven energy swings.
The annual core CPI is seen rising by 2.5% in July, slowing from a 2.6% increase in June. Meanwhile, core CPI inflation is expected to climb to 0.2% month-over-month (MoM) in July, following a flat reading in June.
Gold faces two-way risks ahead of the US inflation showdown, with hotter-than-expected core CPI readings likely to ramp up bets on a September Fed rate hike, boosting the US Dollar (USD) and US Treasury bond yields at the expense of the non-yielding Gold.
On the other hand, softer core prints could provide fresh legs to the bullion’s uptrend, as the data would further reduce bets on Fed rate hikes this year and fuel a USD downtrend.
However, the geopolitical risk premium will continue to remain in play and could leave Gold’s initial reaction to the CPI release short-lived.
Gold holds firm as stagflation narrative supports CTA lengthAccording to TD Securities, “precious metals maintain a bid,” with the yellow metal “holding gains, and maintaining CTA length north of $4,400/oz, even as oil prices and rates continue to churn higher.” The firm notes that “recent price action continues to hint at a growing stagflationary theme in the gold market,” adding that while “inflation data and Fed pricing will remain keenly watched, a stronger-than-expected inflation print may be needed to shake the current narrative.”
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,398.04. The metal holds a bullish near-term bias as the spot price remains above the 21-day, 50-day and 100-day simple moving averages (SMAs), with the latter providing nearby trend support around $4,388.40. The 200-day SMA at $4,500.55 looms as the next major upside barrier, while the Relative Strength Index (14) at 67.03 approaches overbought territory, hinting that the latest advance could be losing momentum as it nears that longer-term hurdle.
On the downside, immediate support is seen at the $4,398.04 area, followed closely by the 100-day SMA at $4,388.40, forming a shallow demand cluster before deeper support emerges at the 50-day SMA near $4,147.80 and the 21-day SMA around $4,133.91. On the topside, a decisive break above the 200-day SMA at $4,500.55 would open the door for a continuation of the broader bullish trend, while failure to clear this level would keep gold confined to a consolidative phase above its short- and medium-term averages.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Consumer Price Index ex Food & Energy (MoM) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as the Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The MoM print compares the prices of goods in the reference month to the previous month.The CPI Ex Food & Energy excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.
The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
Inflation FAQs Inflation measures the rise in the price of a representative basket of goods and services. Headline inflation is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core inflation excludes more volatile elements such as food and fuel which can fluctuate because of geopolitical and seasonal factors. Core inflation is the figure economists focus on and is the level targeted by central banks, which are mandated to keep inflation at a manageable level, usually around 2%.
The Consumer Price Index (CPI) measures the change in prices of a basket of goods and services over a period of time. It is usually expressed as a percentage change on a month-on-month (MoM) and year-on-year (YoY) basis. Core CPI is the figure targeted by central banks as it excludes volatile food and fuel inputs. When Core CPI rises above 2% it usually results in higher interest rates and vice versa when it falls below 2%. Since higher interest rates are positive for a currency, higher inflation usually results in a stronger currency. The opposite is true when inflation falls.
Although it may seem counter-intuitive, high inflation in a country pushes up the value of its currency and vice versa for lower inflation. This is because the central bank will normally raise interest rates to combat the higher inflation, which attract more global capital inflows from investors looking for a lucrative place to park their money.
Formerly, Gold was the asset investors turned to in times of high inflation because it preserved its value, and whilst investors will often still buy Gold for its safe-haven properties in times of extreme market turmoil, this is not the case most of the time. This is because when inflation is high, central banks will put up interest rates to combat it. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold vis-a-vis an interest-bearing asset or placing the money in a cash deposit account. On the flipside, lower inflation tends to be positive for Gold as it brings interest rates down, making the bright metal a more viable investment alternative.
Inflation days typically produce larger gold trading ranges Nearly one in four post-pandemic CPI days have seen 2%+ ranges $4,367 remains key level for XAU/USD Gold has had an extremely strong run, one that, as covered in a separate note yesterday, is close to unprecedented based on moves in traditional macro drivers such as the US dollar and US Treasury yields over such a short period. But after such a pronounced surge, there are now some warning signs that the move may be running out of steam.
What a Decade of Inflation Days Shows Based on a look back at inflation days over the past decade, it’s clear these releases generally don't provide a huge directional edge for gold traders. That said, they do tend to generate slightly larger trading ranges and a modest skew towards positive closes compared with non-inflation days.
Source: LSEG, FOREX.com
The average intraday range has been 1.54%, compared with 1.41% on other sessions, while gold has closed higher on 60.5% of inflation days versus 53.5% of non-inflation days.
While there’s no significant divergence in performance, that’s not to say these releases don’t provide trading opportunities. Over the past decade, around one in five inflation reports has coincided with an intraday range of at least 2%, with the vast majority sitting somewhere between 1% and 2%.
Source: LSEG, FOREX.com
Breaking the sample down either side of the pandemic also reveals an interesting shift. Before March 2020, inflation days produced a stronger skew towards positive closes and larger average gains. Since then, the directional edge has weakened, but volatility has increased, with the proportion of sessions generating an intraday range of at least 2% more than doubling from 11.6% to 23.7%.
That perhaps shouldn’t come as a surprise. Before the pandemic, inflation was generally low and often undershot expectations. Since then, we’ve moved into a much higher inflation regime marked by repeated supply shocks and far greater uncertainty. The predictability of the pre-pandemic world simply isn’t there anymore.
Of course, historical tendencies provide context rather than certainty and offer no guarantee of how gold will react later today.
XAU/USD Technical Setups
Source: TradingView
Looking at XAU/USD on the daily chart, the price failed to hold above the 100-day moving average on Tuesday, leaving behind a daily candle resembling a shooting star. Coming after such a strong rally, that raises the risk of a near-term reversal. Depending on how price action develops today, there is also the potential for a three-candle evening star to form.
For now, the price continues to find support around $4,367, a level that has acted as both support and resistance earlier this year. That makes it an obvious level to watch heading into US inflation later in the session.
If the bearish reversal signal is confirmed, one potential setup would be to wait for a break beneath $4,367. If the price can break below and hold there, shorts could be considered with a tight stop above for protection, targeting $4,300 initially before $4,200, part of the breakout zone smashed through last week.
However, this is not a slam dunk case for shorts. RSI (14) and MACD continue to point to the bulls having the ascendancy, while XAU/USD has already bounced from $4,367 during Asian trade on Wednesday.
If the price continues to hold above the level, pullbacks towards $4,367 could be bought with a tight stop beneath for protection. The first target would be Tuesday’s high around $4,435, with the 200-day simple moving average near the psychologically important $4,500 level beyond that.
Gold (XAU/USD) attracts some dip-buyers during the Asian session on Wednesday, stalling the previous day's retracement slide from the $4,435 region, or the highest level since June 5. The commodity, however, remains below the $4,400 mark as traders await key US inflation figures for fresh cues about the US Federal Reserve's (Fed) future policy path before placing fresh directional bets on the non-yielding yellow metal.
Friday's weak US Nonfarm Payrolls (NFP) report pointed to signs of a cooling labor market and undermined the case for the Fed to raise interest rates. Investors, however, remain worried about inflation risks stemming from volatile energy prices, which might force the US central bank to adopt a more hawkish stance. In fact, crude oil prices climbed to a one-and-a-half-week high on Tuesday after an advisor to Iran’s Supreme Leader Mojtaba Khamenei said that the Strait of Hormuz will not be opened until the US meets Tehran's demands.
Adding to this, Iran-backed Houthi rebels in Yemen escalated attacks on vessels in the Red Sea and Bab el-Mandeb, particularly targeting Saudi-linked ships. This led to increased war-risk premiums, which act as a tailwind for crude oil prices and should benefit the safe-haven Greenback. Furthermore, hawkish Fed expectations remain supportive of elevated US Treasury bond yields, further underpinning the buck and warranting caution before positioning for an extension of the XAU/USD pair's strong move up witnessed over the past week or so.
Analysts at Deutsche Bank highlighted that the sharp move in energy markets added to pressure on rates, noting that Brent crude “(+4.99% to $87.72/bbl) rallied past $85/bbl for the first time this month, whilst the 10yr Treasury yield (+6.2bps) unwound the entirety of its decline after Friday’s payrolls with September Fed hike pricing returning to above 50% ahead of tomorrow's CPI.” According to the bank, “that backdrop of higher oil prices and rate hike speculation meant it was a tricky session for sovereign bonds around the world,” with a “consistent picture of yields moving closer back to the highs from late-July.”
XAU/USD daily chart
Technical AnalysisThe metal is hovering around the 100-day Simple Moving Average (SMA), though it remains capped beneath a dense band of overhead resistance, starting with the 50.0% Fibonacci retracement of the April-June fall and extending towards the 200-day SMA at $4,500.51, suggesting that bulls need a clear break higher to regain control.
On the downside, immediate support is provided by the 100-day SMA at $4,388.33, with further cushions at the 38.2% retracement at $4,298.48 and the 23.6% level at $4,161.40. A break below the latter could expose the structural floor around $3,939.81.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
On Wednesday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.7882 compared to the previous day's fix of 6.7900 and 6.7430 Reuters estimate.
PBOC FAQs The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
US inflation surprises remain subdued versus history Fed rate hike pricing has eased through August EUR/USD grinds higher within ascending channel USD/JPY coils beneath 159.37 resistance For all the talk about today’s US inflation report, it is debatable whether anyone truly has a consistent edge in predicting how the data will print, let alone how markets will respond over a longer time frame. Looking at price action across major currency pairs heading into the release and identifying the technical levels that matter provides a framework as good as any for anticipating or reacting once it comes out.
No Repeat of 2022 Relative to the supply shock-driven inflation surge coming out of the pandemic and Ukraine war, the inflationary impact from the latest bout of energy price strength has so far been far less significant. Despite disruptions to energy supplies coming out of the Gulf, Citi’s US Inflation Surprise Index shows that, over recent years, inflation prints have by and large either met or undershot expectations.
The index measures whether inflation data is coming in above, in line with, or below market expectations, with readings above zero signalling upside surprises and readings below zero indicating downside surprises.
Source: LSEG, FOREX.com
Of course, that trend does not eliminate the risk of an upside surprise today. But it does suggest the recent skew has been towards inflation meeting or undershooting expectations rather than exceeding them.
Based on forecasts compiled by the Wall Street Journal, monthly estimates for headline CPI range from 0% to 0.16%, centred around a median of 0.12%. For core, the range is 0.16% to 0.26%, with the median at 0.22%. That leaves the hurdle for an upside surprise relatively low.
Importantly, it will not just be the headline figures that matter. Traders will be looking for evidence that inflationary pressures are becoming more entrenched in core services excluding housing, which would provide a read on domestically generated price pressures and labour market conditions. Core goods prices will also be important in assessing whether tariff pass-through is largely complete.
Those components will help shape expectations for the PCE inflation report later this month, with PPI due Thursday providing another piece of the puzzle.
Fed Hike Bets Retreat
Source: TradingView
Despite the re-emergence of energy-led inflationary pressures, market pricing for Fed rate hikes out to the June meeting next year has been edging lower in August. According to Fed funds futures, around 44 basis points of tightening is priced over this period, with the September meeting effectively deemed a coin flip.
Back in late July, around 62 basis points of hikes were priced over the same period. But a run of relatively tepid US economic data, following a series of strong beats earlier this year, including an underwhelming payrolls report last Friday, has curtailed hawkish pricing.
Euro Retains Its Bid
Source: TradingView
Looking at EUR/USD, we have seen a series of bullish breakouts over recent weeks. The first came from a minor downtrend in the wake of the Fed meeting two weeks ago. Then came the joint intervention by the US Treasury and Japan’s Ministry of Finance, which saw the pair bounce strongly from beneath former resistance around 1.1480, where the 50-day simple moving average was also located.
Since then, the price has settled into a grind within an ascending channel, breaking above downtrend resistance in place from the highs set earlier this year. That slowdown in the bullish move has coincided with renewed energy price strength, with the Gulf effectively shut as geopolitical tensions between Iran and the United States escalate again. Even so, it has not been enough to derail the euro yet.
The pair continues to attract bids within the ascending channel that formed from the 23.6% Fibonacci retracement of the January to June bear move, leaving the near-term options clear cut.
While the structure holds, longs can be considered on dips towards the lower end of the channel, targeting a retest of the 100-day simple moving average, which capped the pair late last week, followed by the upper end of the structure. Beyond that, the 38.2% Fibonacci retracement at 1.1614 comes into view, with the 200-day simple moving average at 1.1627 not far above and now flatlining.
On the downside, a break of the lower end of the ascending channel would bring the 23.6% Fib back into focus. Beneath that, 1.1480 is the next level of note, having previously acted as resistance, followed by the 50-day simple moving average.
Longs are marginally favoured over shorts, with the oscillators still siding with bulls even though upside momentum is no longer strengthening. RSI 14 remains above the neutral 50 level at around 60, while MACD has staged a bullish crossover and moved into positive territory, although it too is flattening out.
While upside momentum is no longer building, the broader technical picture suggests retaining a modest bullish bias may be more advantageous than turning bearish.
Yen Weakness Refuses to Fade
Source: TradingView
As correctly flagged in my weekend USD/JPY note, upside risk in the pair has played out so far this week. Importantly, that has occurred despite both the soft US payrolls report and a further pullback in Fed hike pricing, reinforcing the point that yen weakness is broader and more structural than simply a US rates story.
Following the push above last week’s high, USD/JPY finds itself coiling in what resembles an ascending triangle on the four-hourly chart on the left. Gains have been capped around 159.37, while dips continue to be bought at progressively higher levels. The structure has not been in place for an extended period, but it still warns of the potential for an eventual topside break and continuation of the rebound seen so far in August.
On the upside, the first levels of note are the 100-day simple moving average on the daily chart on the right, followed by 160.73, the former record high hit in late April. That level has flipped between support and resistance on subsequent tests, leaving it as an obvious reference point if the rebound extends.
On the downside, the gradually rising trendline visible on the four-hourly chart runs from the Liberation Day lows in April last year. Even though it was broken convincingly during the latest intervention episode, the price respected it earlier this week, suggesting it remains relevant. It kicks in today around 159.00.
Beneath that, 158.58, last week’s high, is the next level of note, followed by 157.95, which has acted as both support and resistance since the intervention episode.
The oscillators are mildly bullish, even though upside momentum is no longer building. RSI 14 is flatlining above the neutral 50 level at around 61, while MACD staged a bullish crossover earlier this month and has since moved into positive territory, although it is now converging back towards the signal line. Overall, the setup still favours retaining a bullish bias on the four-hourly timeframe.
The GBP/JPY ended Tuesday’s session unchanged at 215.17 as buyers remained reluctant to test the 50-day Simple Moving Average (SMA) at 215.43, seen as the first resistance level on its way to re-test yearly peaked at around 219.61.
GBP/JPY Price Forcast: Technical outlookPrice action suggests the GBP/JPY is facing key resistance that could cap the advance, which could open the door for sideways trading. Further confirmation of this, is the Relative Strength Index (RSI): The RSI shifted flat exactly at the 50-neutral level, an indication that neither buyers nor sellers are fully committed to push the cross above or below familiar levels.
On the upside, the first key resistance is the 50-day SMA, followed by the 216.00 mark. A breach of the latter will expose the 216.50 figure, followed by the 217.00 psychological mark
Downwards, the GBP/JPY first support would be the 215.00 milestone, followed by the 100-day SMA at 214.53. Below this, sits the 200-day SMA at 217.05 ahed the August 7 low of the day (LOD) at 211.47.
GBP/JPY Price Chart – Daily
GBP/JPY daily chart Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Spot gold daily chart shows initial bullish reversal signal above lower swing high. Source: TradingView $4,357 Line in the Sand A new higher daily low of $4,357 is now key near-term support, since a drop below it may lead to a deeper pullback. However, an eventual recovery and continuation of the short-term bull trend still look likely after a period of consolidation or correction. Monday’s breakout above the lower swing high of $4,382 was confirmed when the session ended above that level, with a close at $4,389. That provided a trend reversal signal and helped establish the bullish momentum that carried into Tuesday’s advance.
Since bullish momentum began following a declining trendline breakout last Wednesday, gold had advanced by approximately 8.0% from last Wednesday’s low to Tuesday’s high. That is a relatively healthy move in a short period of time. Therefore, some degree of correction, either through consolidation or a pullback, could be healthy for the advance before gold is ready to proceed higher. A break below $4,357 would increase the likelihood of that deeper correction, while holding above support would keep the bullish structure intact.
$4,500 Above, $4,267 Below Nonetheless, the next upside target is marked by the 200-day moving average near $4,500. A decisive breakout above Tuesday’s high would signal a continuation of the short-term advance toward the next target, which is less than 2.0% above the high.
If $4,357 support breaks, the 38.2% Fibonacci retracement of the prior advance is at $4,267 presents a possible minimum retracement target. It takes on added significance from its proximity to the long-term rising trendline and last Wednesday’s high of $4,268. Holding $4,357 would preserve the bullish setup and leave the door open for another test of $4,500, while a break below it would point to a deeper retracement toward $4,267.
The GBP/JPY continues its post-intervention recovery ahead of the US CPI report tomorrow, which could have a secondary impact on the pair. Current Setup The GBPJPY still retains the structural bullishness because of the interest rate differential that still exists between the British Pound and the yen. However, the overall risk-to-reward for this interest rate differential is no longer as one-sided as it was before the late July FX intervention by the Japanese financial authorities, followed by the Bank of Japan’s hawkish switch in monetary policy. However, the pair still retains its key macro divergence as the Bank of England still maintains its official bank rate at 3.75%, against the BoJ’s 1.0%.
The sudden switch to a more hawkish approach to monetary policy by Japanese authorities has triggered a round of strengthening in the last two weeks. Not only have Japanese financial authorities demonstrated a willingness to intervene in FX markets when required, but this has also been backed up by more hawkish messaging at last week’s BoJ monetary policy meeting.
The summary is clear. While the fundamentals of the carry trade continue to support a GBP/JPY uptrend, it is becoming riskier to keep chasing that trend at elevated price levels.
Macro Analysis of the GBP/JPY 1) The BoE-BoJ rate differential still favors the GBP
The rate differential remains the largest structural support for the GBP/JPY pair. Investors will therefore still choose to borrow the Yen (lower interest) and buy the Pound (earning higher interest); the so-called carry trade. As long as this differential remains, investors will remain incentivized to continue the carry trade.
The carry only collapses if the BoE reduces rates, or the BoJ fastens its tightening course. Otherwise, any interventions by the Japanese financial authorities will make it cheaper to get into the GBP/JPY uptrend, providing a dip-buying opportunity.
2) A More Hawkish BOJ is gaining market traction
Japan’s export-oriented economy depends on a weaker Yen relative to the other G10 currencies to make its products more attractive for other countries to import. But with the rise in oil prices due to the geopolitical tensions in the Middle East, it has become simply too expensive to use a gradually weakening Yen to fund oil imports. Japan is 100% dependent on imports of crude oil/refining derivatives for its fossil-fuel needs. The Yen’s weakness was starting to become an untenable situation. The Japanese financial authorities are no longer just threatening to intervene (verbal action). They actually consulted US authorities and performed a coordinated action to buy Yen and sell the US Dollar.
The message is clear, and BoJ Governor Ueda also sounded this at the last monetary policy meeting: the BoJ was prepared to use all means at its disposal to resist disorderly depreciation of the Yen and respond to any inflationary pressures brought on by wage growth. Estimates put the cost of the latest intervention at about ¥8.45 trillion. As is the culture, there are no official figures from the BoJ or Japanese Finance Ministry to this effect.
This is important because such an intervention usually leads to the yen strengthening across the board. Despite the USD/JPY being the primary target of this move, the GBP/JPY suffered collateral damage.
USD/JPY ↓ → JPY strengthens → GBP/JPY ↓
3) Intervention risk at elevated levels is now a credible factor
This is a major change for the macro fundamentals of GBP/JPY. There is now a risk of abrupt reversals without warning if the uptrend takes prices above 210.00. Maybe even lower. Trying to chase an additional upside move at that price level, or even trying to pre-empt an intervention, can quickly lead to severe losses if the trader’s account cannot handle the volatility.
4) The BoE is not straightforwardly dovish
The Bank of England’s pathway to rate cuts remains unclear and non-committal. UK inflation for June cooled significantly to 2.6% YoY. This should ordinarily be an impetus for a rate cut, but growth and employment data surprised to the upside, which is a sign that the UK economy presently does not need the BoE’s help via a dovish action.
The next UK inflation and employment data on 17-18 August 2026 are deemed as a key driver of the GBP/JPY’s near-term trend.
5) Risk sentiment
The GBP/JPY is more risk-sensitive than many major FX crosses. The pair gains when the market is risk-on, and loses ground when the market is risk-off. The geopolitical space has made risk sentiment an active determinant of intraday and ultra-short-term direction.
GBP/JPY Technical Outlook The 4-hr chart shows that the price action has broken above the 214.62 resistance (2 July) en route to the 216.03 barrier and prior high of 1 July 2026. If the bulls push past this resistance, the 217.23 and 218.56 resistance levels come into the picture, with the latter being the 30 July high from where the BoJ intervention took place.
Fig 1: GBP/JPY 4-hr chart showing post-intervention recovery levels (snapshot: 11 August 2026) On the flip side, downside targets at 212.61 (24 June low) and 209.51 (2 August low and post-intervention trough) become available if the bulls fail to defend the 214.62 support mark.
USD, USD/JPY Talking Points: The long-term USD/JPY carry trade is still swinging USD trends across the FX market. At root of the USD/JPY trade are rate expectations and as high US CPI forced expectations higher over the past two months, USD/JPY bulls drove a rally that eventually brought out coordinated intervention. Over the past four years some of the largest moves in USD/JPY have been sparked by US CPI rather than interventions and that puts even more interest behind tomorrow’s release.
The Bank of Japan and the US Treasury Department took their swing at USD/JPY two weeks ago, but since then, bulls have been clawing back. This puts perhaps even more importance on tomorrow’s US CPI report as rates markets still widely-expect the US to lift rates later this year, with an approximate 80% probability priced-in for at least one 25 bp hike.
Even September is looking like a coin flip, and that’s largely owed to the spike in CPI seen earlier this summer on the back of the war in Iran. As oil prices rallied, inflation followed, and there’s been a growing chorus of Fed-speakers that sound as though they’re warming to the idea of tightening policy, looking to avoid a repeat of the disaster in 2021 that saw the FOMC dismiss inflation as ‘transitory’ until, eventually, they had no choice but to hike aggressively in 2022.
US CPI Prints Since Jan 2021
Chart prepared by James Stanley
Rates Markets Right now rates markets are highly expecting a rate hike from the Fed later this year, which would fly in the face of President Trump’s strategy in which he wanted to install a Fed Chair that would cut rates. So far, Warsh has sounded more hawkish than dovish but as I shared after the last FOMC meeting, it seems as though he’s doing that to keep markets from just expecting that he’s going to cut rates whenever he can. If they did think that Warsh was a dove, that could give upward momentum to US Treasury Yields, such as we’ve seen, and that could complicate the picture for the US Treasury Department that has a considerable amount of debt coming due over the next four months and then more over the next year.
This is likely why he keeps saying that the market will adjust rates based on the preponderance of data rather than waiting for the Fed to do so. Nonetheless, that expectation still leans towards wide expectations for the Fed to hike, and this comes with numerous market responses such as a stronger USD, a stronger USD/JPY, etc. And if we do see those rate hike odds price out, then, reasonably, there could be a shift in price action for those markets, as well.
At this stage hike in September is a veritable coin flip.
CME Fedwatch Odds for September Chart prepared by James Stanley; data derived from CME Fedwatch US CPI is Important for USD/JPY, Which is Important for the USD and FX Market Some of the largest moves in USD/JPY over the past four years have been fueled by a US CPI release.
In October of 2022, when the Fed was hiking aggressively to tame the ‘transitory’ inflation that turned out to be not so transitory, USD/JPY was in a near-parabolic like state. To the point where Japanese officials were beginning to worry about the possibility of hyperinflation. So, they tried to step in at 145 and that largely failed, as the intervention merely prodded a pullback that USD/JPY bulls bid, eventually driving price up to 150.00.
At that point, the BoJ was forced to act, after a high of 151.95 traded. They intervened on a Friday ahead of the weekend and, again, price retreated to support before buyers piled back in.
But this time, as price re-approached that 150.00 handle that was previously defended, bulls began to back away. They still held and even bought at support, but as bounced showed up they came in with lower-highs.
What ultimately drove a reversal was the US CPI print on the morning of November 10th, 2022. That was when markets got warm to the idea that perhaps the Fed was getting a handle on inflation, and maybe they would soon be able to stop hiking and, perhaps even eventually cut rates. US CPI was 7.1% at the time and core was at 6.3% so this was still a distant prospect – but the possibility of change was enough to convince longs to bail on positions given that the theoretical cap on upside at the time, at 150.00 made chasing prices higher a less attractive setup.
That market reversed by about 2,000 pips over the course of around two months, with bulls ultimately getting back in the driver seat in January. They, again, drove right back to the same 151.95 level. And, again, it was a below-expected US CPI print in November that shook the branch of the carry trade. This time, it was a mere 23.6% retracement of that prior rally with bulls getting control in December and going right back up to the same 151.95 spot.
In April of 2024, hope was beginning to fade on rate cuts and on April 10th, the morning of a US CPI print, above expected data dashed rate cut hopes – and this time, USD/JPY broke out as the stops above 151.95 provided rocket fuel for longs, and the pair made a firm run up to the next big figure at 160.00.
The Bank of Japan, again, intervened, and that brought about a week of weakness to USD/JPY but that same 151.95 level provided a launch pad for bulls to get back in the driver seat, with price trickling back-above 160.00 shortly after.
The next intervention, in July of 2024, saw the BoJ take a different approach. This time, they waited until the morning of a US CPI print and the combination of the two forces, with inflation coming in below expectations and markets finally getting the confirmation they needed that the Fed could probably cut rates that year, sparked a dizzying reversal – and not just in USD/JPY, as the high-flying AI trade came under fire, as well.
USD/JPY Daily Chart Chart prepared by James Stanley; data derived from Tradingview Why USD/JPY is So Sensitive to US CPI The carry trade is driven by rate differentials, and those are largely driven by inflation. With central banks tasked with monitoring inflation, drops that lead to lower rate expectations or even just fewer rate hikes could be enough to compel longs to close positions, such as we saw in November of 2022 or 2023, or again in July of 2024.
And because the USD/JPY trade is still up more than 50% from early 2021 levels, then logically there’s a large built-in position on the long side of the pair, which means selling in USD/JPY can lead to USD-weakness elsewhere, such as we saw with the EUR/USD rally in Q3 of 2024, or even the bullish move in EUR/USD two weeks ago.
--- written by James Stanley, Senior Market Analyst, Global Macro
Scotiabank strategists Shaun Osborne and Eric Theoret observe that the British Pound (GBP) is consolidating gains near the top of its one-month and multi-month ranges, with price action closely tied to fading downside risk reversals. Improved United Kingdom (UK) political risk perception and slightly more constructive yield spreads support GBP/USD, while technicals point to resistance around 1.3600–1.36s and support in the mid/lower 1.34s.
Sterling consolidates near recent highs"The pound is quiet, consolidating its recent gains toward the upper end of both its local (one month) and medium term (multi-month) range."
"Price action continues to be driven by sentiment as we note the GBP’s tight correlation to risk reversals, which continue to fade their premium for protection against downside movement."
"The recovery is important, reflecting an overall improvement in the market’s assessment of UK (specifically political) risk and offers scope for further near-term strength for the pound."
"The release calendar is limited ahead of Thursday’s Q3 GDP (2nd), as well as the trade and industrial production figures for June. Yield spreads are also looking slightly more constructive for the pound as well, showing signs of a renewed recovery following their modest mid/late July pullback."
"Bullish – the overall technical setup remains constructive as the GBP recovers back toward its mid-July peak in the mid-1.35s, as well as the upper end of its range since mid-February."
"We note the potential for additional near-term resistance closer to 1.3600 and the May peaks in the mid-1.36s. We see support in the mid/lower 1.34s, and look to a near-term range bound between 1.3450 and 1.3550."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Silver price reverses its course, drops some 2.70% on Tuesday, even though US Treasury yields and the Greenback remained steady, amid news that if the US does not comply with Iran’s demands, the Strait of Hormuz would remain closed. The XAG/USD trades at $64.77, after hitting a daily high of $66.49.
XAG/USD Price Forecast: Technical outlookFrom a technical perspective, the white metal is neutral to upward-biased after it reclaimed the 50-day Simple Moving Average (SMA). Nevertheless, the market structure of lower highs and lower lows is intact, at risk of being broken, once Silver clears the June 16 swing high of $71.19
Momentum revealed that buyers continue in control as depicted in the Relative Strength Index (RSI). But a dip in the index suggests that consolidation lies ahead.
For a bullish continuation, the XAG/USD must surpass the 100-day SMA at $68.93. Above lies the $70.00 psychological figure, followed by the June 16 high at $71.19, ahead of the 200-day SMA at $71.39.
On the flip side, if XAG/USD retreats below the August 10 daily low of $63.28 it opens the door for a deeper pullback. The next area of interest would be the 50-day SMA at $61.76 ahead of the $60.00 milestone.
XAG/USD Price Chart – Daily
Silver daily chart Silver FAQs Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
FedWatch Tool indicates that there is a 50.1% probability that Fed will keep rates unchanged at the next meeting in September. In case the probability of a rate hike increases, gold may find itself under pressure.
U.S. dollar is swinging between gains and losses against a broad basket of currencies despite falling Treasury yields. The dynamics of the American currency did not have a material impact on gold price dynamics in today’s trading session.
Gold traders will also stay focused on the situation in the Middle East. Pakistan has recently said that U.S. and Iran could reach some kind of a deal. Oil traders remain cautious, and oil markets are up by 1%. In case U.S. and Iran reach a temporary deal, oil prices will move lower, providing additional support to gold markets.
In case gold stays above the resistance level at $4360 – $4380, it will head towards the next resistance, which is located in the $4480 – $4500 range. RSI remains in the moderate territory, so there is plenty of room to gain momentum in the near term.
On the support side, a move below the $4350 level will push gold towards the $4300 level. If gold manages to settle below $4300, it will head towards the nearest support at $4180 – $4200.
Silver Retreats As Gold/Silver Ratio Rebounds From Weekly Lows
Daily Spot Silver (XAG/USD) Spot silver is edging lower at the mid-session on Tuesday after giving back earlier gains. The rally stalled early in the session at $66.48. The price came in near the mid-point of the 50-day moving average at $61.75 and the 200-day moving average at $71.26.
The actual mid-point between the two indicators is $66.51. Let’s call that the pivot that will determine the direction of the last major move. A sustained move over $66.51 will indicate the presence of buyers.
If this generates enough upside momentum, we could see a near-term surge into the 200-day MA at $71.26 or a long-term 50% level at $72.08. A sustained move under $66.51 will signal the presence of sellers. This could fuel a near-term break into the 50-day MA at $61.75 or the long-term 50% level at $60.835.
What to Watch Silver is stuck between oil pushing inflation expectations higher and a CPI print that could reverse the pressure. The failure at $66.48 showed that buyers are not willing to lead ahead of the data, and rising hike odds say the rate trade is not going away on its own. Wednesday’s number is the catalyst. Soft inflation reopens the bid. Hot inflation keeps oil and the Fed in control.
The rejection at the midpoint between the 50-day and 200-day moving averages makes $66.51 the level that defines the next move. A push above it targets the 200-day. A sustained failure keeps sellers pointed toward the 50-day.
XAG/USD Current Price: $64.80Market participants keep an eye on developments in the Middle East in the absence of relevant data.The United States will publish the July Consumer Price Index on Wednesday. XAG/USD sheds some ground after peaking at a fresh multi-week high of $66.59.Silver prices are stable around the $65 mark in the American session on Wednesday, after briefly trading above $66, its highest in nearly two months. Market players have found no relevant drivers so far this week, with headlines pointing to continued tensions in the Middle East and to a conflict with no resolution in sight.
The latest on the matter indicates that Iran has submitted a new set of conditions for reopening the Strait of Hormuz, clarifying that negotiations with Oman over traffic through the strait have nothing to do with its reopening. The stalemate between the United States (US) and Iran continues to create uncertainty in financial markets, which closely monitor oil prices. Both Brent and West Texas Intermediate (WTI) crude prices have been on the rise over the last few days, reviving inflation-related concerns and speculation about tighter monetary policy by central banks.
A clearer picture on the matter, particularly in the US, will appear on Wednesday, as the country will publish July Consumer Price Index (CPI) data. The core annual CPI is foreseen at 2.5%, slightly below the 2.6% posted in June, a reading that would not affect the odds for future Federal Reserve (Fed) monetary policy decisions. However, if the outcome surprises to the upside, market players are likely to increase bets for a September hike, which in turn should strengthen the Greenback.
XAG/USD short-term technical outlook
On the four-hour chart, XAG/USD trades with a clear bullish bias, as price remains above the 20-period Simple Moving Average (SMA) around $63.96. The 100- and 200-period SMAs are clustered well lower near $59.77 and $59.37, respectively, reinforcing a well-supported uptrend. Momentum remains positive, with the Relative Strength Index (RSI) indicator hovering in the low-60s and the Momentum indicator still in positive territory yet retreating, suggesting the latest consolidation is more a pause within the prevailing advance than a topping pattern.
According to the daily chart, XAG/USD holds well above the 20-day SMA at $59.32, while the 100-day and 200-day SMAs at $68.93 and $71.39, respectively, remain overhead, leaving the broader trend still capped but the near-term tone constructive. Fourteen-day Momentum is positive, and the RSI at 59.99 stays in bullish territory, suggesting that buying pressure is improving as price recovers from recent lows.
On the downside, initial support emerges at the nearby 20-period SMA around $63.96, where buyers are likely to defend the short-term trend line. A deeper pullback would expose the next demand band around the 100- and 200-period SMAs at $59.77 and $59.37, where the broader bullish structure would still be intact as long as price holds above this medium-term base. On the topside, initial resistance emerges at the 100-day SMA near $68.93, ahead of the longer-term barrier provided by the 200-day SMA at $71.39. O
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold (XAU/USD) price registers modest losses on Tuesday, driven by a firm US Dollar as traders await the release of crucial US inflation data and the potential reopening of the Strait of Hormuz. The rise in energy prices is also capping the yellow metal´s advance. At the time of writing, the XAU/USD pair trades at $4,381, down 0.18% in the day after hitting a daily high of $4,435.
XAU/USD eases near $4,380 as traders await US inflation data and monitor elevated energy-price risksSo far, the economic docket has remained scarce, despite the release of the ADP Employment Change 4-week average, which showed that the labor market is decelerating, coming at 8.25K jobs created, while the previous print was downward revised by 4K to 11K.
Other data, mostly ignored by markets awaiting US inflation, showed that Existing Home Sales fell further in July, by 1.7%, from 4.13 million to 4.06 million. The report stated that higher mortgage rates due to the Middle East conflict and higher house prices are capping home sales. 30-year fixed-rate mortgage rates have risen by over 71 basis points since the beginning of the US-Iran conflict, and are now at 6.69%.
On Wednesday, the US economic schedule will feature the release of the US Consumer Price Index (CPI), with analysts expecting July's headline inflation to be 3.4% YoY, a tenth lower than June. Core CPI is also projected to decrease by the same margin to 2.5% YoY.
A day after the US CPI, traders will turn to the release of the US Producer Price Index (PPI) and jobless claims, the first of which follows a disappointing July Nonfarm Payrolls report.
Chicago Federal Reserve (Fed) President Austan Goolsbee said the economy's biggest problem is inflation, not the collapse of industry and jobs. He reiterated that “prices have been rising too fast, we have an inflation problem, and people hate inflation.”
Money markets are still adjusting their forecasts for a Fed rate hike in September, with a 52% probability of a 25-basis-point increase, based on Prime Terminal data.
Source: Prime TerminalIn the meantime, the US Dollar Index (DXY), which tracks the performance of the buck’s value against a basket of six currencies, holds steady at 99.82, unchanged. So far, US Treasury yields, which usually correlate inversely to Gold prices, are also down two basis points, at 4.687%.
Regarding geopolitics, the Secretary of the Supreme National Security Council of Iran commented that the Strait of Hormuz will not open until the US changes its behaviour and accepts Tehran’s conditions.
XAU/USD price forecast: Gold struggles as 100-day SMA, poised for sideways tradingGold price seems to be consolidating after two bullish days, pushing the yellow metal above the $4,350 area. Momentum, although bullish as indicated by the Relative Strength Index (RSI), has stalled somewhat, suggesting XAU might trade sideways in the short term.
For a bullish resumption, Gold must clear the 100-day Simple Moving Average (SMA) at $4,389. Once done, the next stop is the $4,400 psychological level, followed by the 200-day SMA at $4,498 and the $4,500 milestone.
On the downside, initial support is at the July 6 high, now at $4,202. If this level fails, the next support levels are the 50-day SMA at $4,150 and $4,100
Gold daily chart Gold FAQs Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Key Points:GBP/USD is mostly flat as traders react to BRC Retail Sales Monitor report from the UK. USD/CAD moves lower amid falling Treasury yields. USD/JPY stays below the resistance at 159.50 - 160.00.
In this article:EUR/USD
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EUR/USD ForecastGBP/USD
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GBP/USD ForecastUSD/CAD
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USD/CAD ForecastUSD/JPY
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USD/JPY Forecast
U.S. Dollar Is Little Changed As Existing Home Sales Miss Analyst Estimates
DXY 110826 4h Chart U.S. Dollar Index is mostly flat as traders focus on the Existing Home Sales report. The report indicated that Existing Home Sales decreased by -1.7% month-over-month in July, compared to analyst forecast of -0.7%.
U.S. Dollar Index continues its attempts to settle above the resistance level at 99.85 – 100.00. In case U.S. Dollar Index manages to settle above the 100.00 level, it will move towards the next resistance, which is located in the 100.50 – 100.65 range.
EUR/USD Pulled Back Below The 1.1550 Level
EUR/USD 110826 4h Chart EUR/USD is swinging between gains and losses as traders wait for geopolitical news from the Middle East. Defense Minister of Pakistan has recently said that U.S. and Iran were close to some kind of a deal despoite aggressive rhetoric from both sides. In case U.S. and Iran reach a temporary deal, oil prices will dive, providing support to the European currency.
If EUR/USD climbs back above the 1.1550 level, it will head towards the resistance level at 1.1600 – 1.1615. On the support side, a successful test of the support at 1.1510 – 1.1525 will push EUR/USD towards the next support level at 1.1435 – 1.1450.
GBP/USD Moved Away From Weekly Highs GBP/USD 110826 4h Chart GBP/USD is little changed as traders focus on the BRC Retail Sales Monitor report from the UK. The report showed that Retail Sales increased by +1% year-over-year in July, compared to analyst forecast of +1.5%.
The nearest support level for GBP/USD is located in the 1.3465 – 1.3480 range. If GBP/USD manages to settle below the 1.3465 level, it will head towards the next support at 1.3335 – 1.3350. On the upside, a move above the 1.3520 level will push GBP/USD towards the resistance level at 1.3550 – 1.3565.
USD/CAD Tests New Lows USD/CAD 110826 4h Chart USD/CAD is losing ground as traders focus on falling Treasury yields. The yield of 2-year Treasuries declined towards the 4.22% level, while the yield of 10-year Treasuries settled below 4.70%. Other commodity-related currencies are also moving higher despite the pullback in precious metals markets.
Currently, USD/CAD attempts to settle below the support level at 1.3920 – 1.3935. If USD/CAD manages to settle below the 1.3920 level, it will move towards the next support, which is located in the 1.3825 – 1.3840 range.
USD/JPY Is Mostly Flat As Traders Take Some Profits After The Strong Rebound
USD/JPY 110826 4h Chart USD/JPY is stuck below the resistance level at 159.50 – 160.00 as traders ignore the pullback in Treasury yields. Falling Treasury yields did not put pressure on USD/JPY as traders believe that BoJ will be forced to maintain its ultra-dovish policy. The major difference in yields between U.S. and Japan serves as the key bearish catalyst for the Japanese currency.
In case USD/JPY climbs above the 160.00 level, it will head towards the next resistance level at 161.50 – 162.00. RSI is in the moderate territory, so there is plenty of room to gain upside momentum in case the right catalysts emerge. It remains to be seen whether BoJ is ready to intervene in case USD/JPY tests the 162.00 level.
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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.
The Pound Sterling (GBP) holds firm against the US Dollar (USD) on Tuesday following the release of softer-than-expected US jobs data, while investors await US inflation data on Wednesday and UK GDP releases on Thursday. At the time of writing, the GBP/USD pair trades at 1.3508, nearly unchanged. Read More...
British Pound consolidates around 1.3500 vs USD; looks to US CPI, UK GDP for fresh impetusThe GBP/USD pair seesaws between tepid gains and minor losses through the early European session on Tuesday, though it remains close to the highest level since July 16 set the previous day. Spot prices currently trade around the 1.3500 psychological mark, nearly unchanged for the day, as traders opt to wait for this week's important macro releases from the US and the UK. Read More...
British Pound clings to gains against US Dollar, US CPI in focusThe British Pound (GBP) holds onto two-day gains marginally at around 1.3500 against the US Dollar (USD) during the Asian trading session on Tuesday. The GBP/USD pair remains firm as the British Pound outperforms despite financial markets pricing out the possibility of an interest rate hike by the Bank of England (BoE) in the near term. Read More...
Crude oil and bond markets are flashing warning signs for risk assets. Yet, investors seem remarkably relaxed. However, if the current situation doesn’t improve markedly, we could see stock markets stage a bit of a correction and in the FX space risk-sensitive currency pairs could take a dip. With that in mind, the risks to the near-term EUR/USD outlook remain titled to the downside. With CPI still a day away, all the focus is on crude oil and US-Iran headlines.
Crude oil remains the key risk for EUR/USD outlook Crude oil prices have surged in the last few days because the Strait of Hormuz remains effectively shut, and there are no signs of progress between the US and Iran.
Oil prices have been rising sharply in the last few days. Today, they were up more than 2% earlier, with Brent briefly reaching around $89 dollars a barrel, before giving back some of those gains.
Source: TradingView.com The latest headlines around talks between Oman and Iran provided some relief, but we shouldn’t confuse talks with an actual breakthrough. Indeed, Iran has come out saying that the Strait of Hormuz will remain shut until their conditions are met.
But current standings from both the US and Iran suggests any potential deal is still some way off, meaning risks remain skewed to the upside for oil prices and to the downside for EUR/USD.
Concerns about supply shortages are also evidenced in oil inventories data in the US, where crude stockpiles are now at their lowest level in more than four decades.
If oil (and gas) prices continue to push higher, this will be bad news for energy importing regions like the eurozone, making the EUR/USD outlook somewhat bearish.
Don’t forget about the bond markets On top of the US-Iran situation, the prospect of the Fed keeping rates high — or even tightening policy in September — is still on the table. Yet equity markets, including the German DAX index, have barely flinched. The DAX hit a new all-time high earlier today, before coming off its highs a few moments ago. So, is the market underestimating the risks?
There is also the persistent warning sign in the bond market. Yields, which have been rising alongside oil prices, during the US-Iran war, have remained consistently high across the curve.
If crude continues higher, investors could start worrying about another inflationary shock. That could push yields even higher, putting pressure on bond prices, and ultimately make equities much less attractive - especially growth stocks. That could also be bad news for foreign currencies, especially those where interest rates are already lower compared to the US, or those where the economy relies on energy imports – such as the euro.
Technical EUR/USD outlook and key levels to watch The EUR/USD was holding around 1.1550 handle at the time of writing, but the directional bias is far from clear. Volatility in this pair has been shocking low for a while now. It is not just because of the summer months, although clearly this is also contributing to subdued trading activity.
Source: TradingView.com The pair broke its bearish trend line a few days ago, yet there has been little desire to bid up the exchange rate meaningfully from here by the bulls. That’s understandable because we have the all-important inflation data coming up and not to mention the ongoing oil market uncertainty.
Perhaps it makes sense to trade this EUR/USD from one level to the next and moving on to the next opportunity in these circumstances.
Key short term resistance is between 1.1575 to 1.6000 area. The most recent high comes in at 1.1622, where we also have the 200-day average converging. A break above that zone would thus be a bullish technical development.
Support meanwhile is seen around 1.1500-1.1520 area. Below this 1.1470ish and 1.1410 are the next downside targets, followed by the recent lows near 1.1350.
In summary So, the EUR/USD outlook looks far from certain. For now, it is in a holding pattern ahead of US CPI. But if oil prices keep rising and bond yields continue climbing, the downside risks could become more pronounced - especially if US CPI also turns out to be hotter than expected.
In the slightly longer term outlook, the big question is whether the EUR/USD can continue looking through higher oil prices — or whether bonds eventually trigger the correction investors have been largely ignoring.
USD/CHF trades with a positive bias on Tuesday as the US Dollar (USD) consolidates its recent gains ahead of Wednesday’s US Consumer Price Index (CPI) data. Price action has stabilized above the 50-day Simple Moving Average (SMA) following a sharp pullback from above 0.8200 in late July.
At the time of writing, the pair trades around 0.8113, extending gains for a second consecutive day. Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, hovers around 99.80, holding above the 100-day SMA at 99.75.
USD/CHF holds a mildly positive technical tone above the 50-day SMA at 0.8067, though the 21-day SMA at 0.8112 keeps gains in check.
The 100-day SMA at 0.7968 supports the broader recovery structure, while the Relative Strength Index (RSI) near 52 points to balanced momentum after cooling from earlier overbought levels.
The Moving Average Convergence Divergence (MACD) remains in negative territory, suggesting that upside momentum has weakened. However, the broader tone stays constructive as long as the pair holds above the 50-day SMA.
A sustained break above the 21-day SMA could open the door to 0.8150, followed by the 0.8200 psychological mark. On the downside, a move below the 50-day SMA would expose the 0.8000 psychological level. Further losses could bring the 100-day SMA at 0.7968 and the horizontal support at 0.7900 into focus.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator Consumer Price Index (MoM) Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The MoM figure compares the prices of goods in the reference month to the previous month.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.
The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
Scotiabank strategists Shaun Osborne and Eric Theoret highlight that the Euro (EUR) is steady, extending a tight consolidation around the mid-1.15s after the Dollar’s late-July Fed-driven decline. EUR/USD trades close to a fair value estimate based on 2-year Germany–US yield spreads, with sentiment-driven correlations strengthening and a quiet data and European Central Bank (ECB) calendar pointing to continued range trading.
Euro steady in tight range"The EUR remains steady as it extends its tight consolidation in the mid-1.15s, with limited overall movement observed in the period following the USD’s broad Fed-driven decline from late July."
"The EUR continues to trade in tandem with a narrow FV estimate based on 2Y Germany-US yield spreads, currently at 1.1563."
"Correlation studies reveal a moderation in fundamentally- (spread) driven movement, while correlations to sentiment (risk reversals) are elevated and strengthening."
"Bullish/neutral – the EUR’s bullish momentum is fading, with the RSI drifting into the upper 50s. The recovery from late July has shown signs of deceleration while still maintaining a marginal bull trend with a sequence of higher highs and higher lows."
"Recent resistance has been observed around 1.1580 and we see additional resistance closer to 1.1600 and the 200 day MA at 1.1630. Support is expected at the 50 day MA at 1.1468. We look to a near-term range bound between 1.1500 and 1.1580. "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Last October India imported more than 1,500 tonnes of silver, and by May the figure was under 50, for reasons that had nothing to do with demand.
The reason is oil, and a currency under strain. Defending the rupee meant making bullion expensive and difficult to bring into the country, and the world's largest silver market went quiet almost overnight. What makes that worth reading this week rather than next quarter is that the oil price which set the whole thing in motion has just moved sharply the other way.
Silver trades near $62.17 an ounce as I write, up close to 6% in two days, with gold around $4,268 at a seven-week high. The move came from an unexpected direction. Iran and Oman moved toward a proposed framework for shipping through the Strait of Hormuz, oil fell roughly 10% on the week to three-week lows, and the market cut the odds of a September rate rise to 55% from 67% in two days. Cheaper oil, cooler inflation, lower rates. Tracing what that does to physical silver demand is the sort of work I do at Golden Meadow®.
The numberIn May 2026, India imported 46.8 tonnes of silver against 534.3 tonnes in the same month a year earlier. Importers reported June lower again. That is a 91% collapse from a country that buys more than 80% of its silver from abroad, and it was the weakest month since July 2023.
Hold on to that October figure, because of what was happening around it. Indian monthly imports ran above 1,500 tonnes during the squeeze that sent the cost of borrowing silver in London to record highs. Borrowing cost matters because a trader who has sold silver forward has to source the metal from somewhere, and when the vaults thin out that rental price spikes. The buyer at the centre of that episode is the one that has now gone quiet.
To put the scale in proportion, the roughly 487 tonnes India did not import in May is about 15.7 million ounces. Metals Focus and the Silver Institute forecast the entire global market running a shortfall of 46.3 million ounces across the whole of 2026, the sixth consecutive annual deficit. One month of missing Indian buying is around a third of that.
Why it happened, and why it was never about silverThe Iran war pushed crude toward $118 a barrel in April. India imports most of what it burns, so the bill arrived immediately: oil imports jumped 53% in a single month and the merchandise trade deficit widened 37.3% to $28.38 billion. The rupee became the worst-performing Asian currency of 2026, falling around 7% to a record low near 96 to the dollar.
Precious metals were the other half of the problem. Gold and silver imports reached $102.5 billion in the 2025-26 fiscal year, up 26.7%, lifting their share of India's total import bill to 14% from 11.8%. Silver alone hit a record $12 billion on 7,335 tonnes across that fiscal year.
So on May 13 New Delhi raised the import duty on gold and silver to 15% from 6%, days after the prime minister asked citizens to stop buying bullion for a year. A licensing regime followed. Most forms of silver were restricted in mid-May, June added silver grain and powder, and most banks still lack the permits they need to bring metal in. Amrapali Group Gujarat's chief executive told Reuters that imports have "nearly come to a halt."
Silver was collateral damage in a currency defence. Indian households did not stop wanting it. Their government made buying it expensive and difficult in order to protect the rupee.
Sources: Business Recorder / Reuters: India Silver Import Curbs Create Shortages | Business Standard: Imports Slump as Licensing Curbs Disrupt Shipments | SilverSeek: Indian Import Tax Driving Silver Shortage | Metals Focus and the Silver Institute, World Silver Survey 2026
What it looks like inside IndiaThe domestic market shows the mirror image of the global one. By early July, Reuters reported dealers charging premiums of $6.50 an ounce over official domestic prices, more than 10% above benchmark, against discounts of as much as $5.50 an ounce in May. That detail matters more than it looks. Official domestic prices already include the 15% import duty and a 3% sales levy, so this premium sits on top of the tax rather than inside it. It is what buyers pay purely because the metal is scarce.
Two shock absorbers have been used up. Withdrawals from Indian silver exchange-traded funds released metal that softened the shortage until dealers reported those volumes absorbed. That left buyers leaning on Hindustan Zinc, the country's largest domestic producer, to fill a gap it was never sized to fill.
Worth noting what kind of demand this is. India's record silver imports in the last fiscal year were driven by fund buying as a hedge rather than by jewellery. The demand being shut off is investment demand, which is the fastest kind to come back.
What this means to Silver investorsThree things follow, and the first is uncomfortable.
In the near term this is bearish, not bullish. Removing 15.7 million ounces of buying in a month makes the global shortfall smaller, not larger. If the curbs hold through the restocking window that runs ahead of the October and November festivals, the 2026 deficit is likelier to come in under the 46.3 million ounce forecast than over it. Anyone treating India's silence as a bullish setup has the sign backwards.
The second point cuts the other way. Demand suppressed by a rule is mostly deferred rather than destroyed. Nothing has changed about India's appetite for silver, its wedding calendar, or its habit of holding metal rather than paper. What changed is a customs notification, and notifications can be withdrawn as quickly as they were issued. Metals Focus and the Silver Institute recorded Indian physical investment rising 33% to 79.2 million ounces in 2025, with another 68.3 million ounces going into exchange-traded products, for a record total the survey puts at 147.6 million ounces. That is the buyer currently locked outside the door.
The third is the one to watch, and it is why this belongs in front of you now. The curbs were a response to crude near $118 a barrel. Oil is now trading in the $70s. If it stays there, the pressure on the rupee eases, the trade deficit narrows, and the fiscal case for taxing bullion at 15% weakens with it. The trigger that closed this door is already reversing, and any reopening should show up in Indian premiums before it shows up anywhere else.
One connection deserves stating carefully, because it is easy to overclaim. Western vaults have looked calm for months. Metals Focus and the Silver Institute reported that only 17% of London's silver was unallocated to exchange-traded funds by the end of September 2025, against almost 35% at the end of 2024, and that spare portion has since recovered. India's absence is one plausible reason for the improvement, alongside softer solar demand, fund redemptions and higher recycling. The available data do not separate those causes. What can be said is that the buyer who caused the last emergency in London has been switched off by a decision taken in New Delhi for reasons that have nothing to do with silver, and that decision is reversible. I track that channel issue by issue in the Silver Catalyst.
The longer-term case for silver rests on a structural shortfall that is running into its sixth consecutive year, met each time by drawing down metal already sitting above ground. India's absence changes the timing of that arithmetic. It does not change the arithmetic.
EUR/GBP is trading on the lower end of its weekly range near the 0.8540 price zone on Tuesday. With no Eurozone or British data until early Wednesday, the cross is trading solely on sentiment, led by Iran's ongoing blockade of the Strait of Hormuz and the United States' (US) counterblockade of Iranian ports.
Adding to the negative sentiment, US forces attacked a Panama-flagged ship that was trying to cross through the Strait.
The Sterling is trading with a firmer tone, maintaining the cross in the red for a second consecutive day.
On Wednesday, the main catalyst for the EUR/GBP will be the German Harmonized Index of Consumer Prices (HICP). On Thursday, the preliminary United Kingdom (UK) Gross Domestic Product (GDP) will be released, giving another indication of the direction of the cross.
Short-term technical analysis:On the 4-hour chart, EUR/GBP trades at 0.8545, holding a mildly bearish near-term bias as it remains capped beneath both the 100-period Simple Moving Average (SMA) at 0.8551 and the 20-period SMA at 0.8559. Short-term momentum is soft, with the Relative Strength Index (RSI) hovering near 37, hinting at lingering downside pressure even as the cross inches away from oversold territory.
On the topside, initial resistance aligns at 0.8547, followed by a tighter barrier at 0.8551 where a horizontal level coincides with the 100-period SMA, before the 20-period SMA at 0.8559 marks a stronger cap to any recovery attempts. On the downside, immediate support is seen at 0.8544, with a deeper floor at 0.8541. A clear break below this lower band would open the way for further weakness in the short term.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
The Bank of Japan intervened in the foreign exchange market in late July. Initial indications put the operation at roughly JPY8.45 trillion, near $52.8 bln, as the dollar approached JPY164.
Robust Canadian economic data and broad U.S. dollar weakness outweighed falling crude oil prices, pushing USD/CAD down toward two-month lows Key upcoming catalysts include Wednesday's US CPI release and new 50% US tariffs on Canadian goods effective August 19, both pivotal for direction Holding U.S. dollars carries risks from Federal Reserve rate cuts, whereas Canadian dollar exposure remains vulnerable to falling energy prices and trade friction Oil prices have fallen notably in recent weeks due to changing dynamics in the Middle East and evolving supply expectations. Despite this, the Canadian dollar has strengthened against the US dollar more than anticipated, with USD/CAD trading around 1.393, a level not seen in approximately two months.
This divergence suggests that oil prices are not the sole driver of the Canadian dollar’s performance. Other factors are providing more substantial support for the Canadian currency in the current market conditions.
Oil Is Down, But That’s Not the Story Right Now WTI crude’s been on a bumpy ride lately. After hitting a late July high near $86.89, it fell to about $74.30 in early August, though it’s since found its footing in the upper $70s. This dip came as Middle East tensions eased, partly due to a U.S.-Iran memorandum that calmed fears about Strait of Hormuz disruptions. Record U.S. output and expected inventory surpluses also played a part.
Ordinarily, a drop like that would hurt the loonie. But the currency has mostly shrugged it off.
Several key macro factors are insulating the Loonie from the recent slide in oil prices. For one, Canada’s own economic data has given the currency a lot of support. Strong domestic job numbers and steady GDP growth have boosted confidence in the country’s economic health.
Interest rate differences still favor the US dollar, as the Federal Reserve’s policy rate is higher than the Bank of Canada’s 2.25% target. While the Fed remains cautious, commentary from Vantage Markets suggests the Bank of Canada’s policy rate has reassured investors, signaling that Canadian rates have stabilized.
What to Watch in the Coming Weeks A few things could quickly change this situation. For one, everyone will be watching Wednesday’s US CPI release. A hot inflation number there could bring back Fed rate-hike expectations and give the dollar another boost.
Additionally, new U.S. tariffs of 50% on approximately $20 billion of Canadian goods are set to take effect on August 19. Unlike previous measures, these tariffs will apply even to goods that typically receive preferential treatment under the CUSMA trade agreement.
This presents a significant challenge for Canadian exporters and could exert downward pressure on the Canadian dollar once the tariffs are fully implemented.
Furthermore, the Bank of Canada’s interest rate decision on September 2 is approaching. The consensus among most analysts is that the bank will maintain its current rate of 2.25% as it continues to assess the impact of the tariffs.
Risks in Holding Either Currency If you hold Canadian dollars, you’re exposed to how commodity prices move. If oil prices fall for a while, it would hurt export earnings and the Canadian dollar. Trade uncertainty or weak Canadian economic news could also undo recent gains.
On the other side, the US dollar remains susceptible to weaker US economic indicators or a shift in Federal Reserve policy towards a more accommodative stance. Geopolitical risks can sometimes support the dollar as a safe-haven asset, while at other times, they can boost oil prices and the Canadian dollar.
Speculative positioning adds another wrinkle. Traders have been betting against the Canadian dollar more heavily than almost any other major currency. This means if something good happens for Canada, those bets could quickly unwind, causing sharp, exaggerated moves in the Canadian dollar in either direction.
Why has the Canadian dollar gained despite softer oil periods?
Stronger Canadian July jobs data, lower unemployment and relative US dollar softness have outweighed oil weakness in supporting the loonie recently.
What’s the risk of holding US dollars right now?
A weakening labor market and softer inflation data could deepen Fed rate-cut expectations, extending recent dollar weakness against major currencies including CAD.
What is the main risk for the Canadian dollar?
A sustained decline in oil prices, weaker domestic data or escalated trade tensions could reverse recent CAD strength against the US dollar.
Commerzbank's Chief Economist Dr. Jörg Krämer expects EUR/USD to recover once the Iran conflict eases and to grind higher over the coming quarters. Krämer links Euro strength to eroding Federal Reserve independence, falling US rate expectations and a significantly overvalued Dollar on purchasing power parity. Commerzbank's updated forecast sees EUR/USD at 1.18 by mid‑2027 and 1.19 by end‑2027.
Dollar seen weakening on Fed doubts"The EUR/USD exchange rate should rise again after the war ends and continue to drift higher in the following quarters due to the eroding independence of the U.S. Federal Reserve, especially since the dollar is significantly overvalued in terms of purchasing power parity."
"We expect the EUR/USD rate to be 1.18 by mid-2027 (previously 1.20)."
"We expect US interest rate expectations to correct even further downward in the coming months, weighing on the dollar."
"On the one hand, inflation risks are likely to diminish with the reopening of the Strait of Hormuz, which we expect to occur by the end of the year."
"All in all, we expect a gradual rise in EUR/USD toward 1.19 by the end of 2027 (previous forecast: 1.21)."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Brown Brothers Harriman’s (BBH) Elias Haddad explains USD/JPY has retraced half of its post-intervention drop, with US–Japan rate spreads already narrowing in favor of the Japanese Yen (JPY). Haddad sees crude price spikes as the main obstacle to Yen gains and argues FX intervention can cap USD/JPY upside but not drive a sustained decline, highlighting major resistance at 160.00.
Yen gains constrained by high crude"US-Japan rate spreads have already narrowed in favor of JPY, and we see room for further compression. The BoJ’s policy rate is near the lower end of its neutral range estimate (1.10%-2.50%) while Japan’s economy is operating above potential. In contrast, Fed policy is restrictive (assuming a neutral rate of 3.00%) and the economy is operating around potential."
"The bigger obstacle to JPY gains is the spikes in crude oil prices. Until crude retreats, FX intervention can contain USD/JPY upside but not force a sustained move lower. USD/JPY next major resistance is offered at 160.00."
"USD/JPY is consolidating yesterday’s gains, having retraced 50% of its intervention-driven drop since July 30."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
EUR/USD fluctuates on Tuesday, holding within the range seen over the past week. At the time of writing, the pair trades around 1.1546, virtually unchanged on the day.
The sideways price action comes as the US Dollar (USD) stabilizes near its recent lows, with traders closely monitoring developments in the Middle East, particularly around the reopening of the Strait of Hormuz.
Attention also turns to Wednesday’s US Consumer Price Index (CPI) data, which could shape Federal Reserve (Fed) rate expectations for the September meeting and drive the next move in the US Dollar and, in turn, EUR/USD.
Euro seen grinding higher as Fed independence erodes and Dollar overvaluation unwindsAccording to Commerzbank, the EUR/USD exchange rate is likely to regain traction once geopolitical tensions ease, with the bank arguing that "the EUR/USD exchange rate should rise again after the war ends and continue to drift higher in the following quarters due to the eroding independence of the U.S. Federal Reserve, especially since the dollar is significantly overvalued in terms of purchasing power parity." The bank also highlights the policy-rate backdrop, stating that "we expect US interest rate expectations to correct even further downward in the coming months, weighing on the dollar."
Reflecting these factors, the bank has trimmed but maintained a constructive medium‑term profile for the pair, now projecting that “we expect the EUR/USD rate to be 1.18 by mid-2027 (previously 1.20)” and, “all in all, we expect a gradual rise in EUR-USD toward 1.19 by the end of 2027 (previous forecast: 1.21).”
Technical analysis: Daily chart
EUR/USD is hovering between the short- and longer-term moving averages and thus maintaining a neutral near-term bias. Momentum remains constructive, with the Relative Strength Index (RSI) on the daily chart near 59 hinting at persistent buying interest and the Moving Average Convergence Divergence (MACD) line in positive territory, suggesting a mild bullish tone in the backdrop despite the layered resistance above price.
On the downside, initial support is seen at the 50-day SMA at 1.1468, followed by a horizontal floor at 1.1400 and a deeper structural base near 1.1350.
On the topside, immediate resistance is located at the 100-day SMA at 1.1567, with a more significant barrier at the 200-day SMA at 1.1630. A sustained break above these levels would be needed to unlock a more convincing bullish phase, while failure to do so would keep the pair confined within its current range.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
US Dollar Price Today The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the British Pound.
USDEURGBPJPYCADAUDNZDCHFUSD-0.02%0.02%-0.06%-0.02%-0.22%-0.08%-0.02%EUR0.02%0.04%-0.04%0.01%-0.16%-0.06%0.00%GBP-0.02%-0.04%-0.09%-0.04%-0.21%-0.10%-0.04%JPY0.06%0.04%0.09%0.05%-0.14%-0.02%0.06%CAD0.02%-0.01%0.04%-0.05%-0.18%-0.07%-0.00%AUD0.22%0.16%0.21%0.14%0.18%0.11%0.18%NZD0.08%0.06%0.10%0.02%0.07%-0.11%0.07%CHF0.02%-0.01%0.04%-0.06%0.00%-0.18%-0.07% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Commerzbank’s Carsten Fritsch notes Gold breaking above USD 4,400 per ounce despite a sharp Oil rally, with Fed rate expectations only modestly higher after weak US labour data. ETF investors added 14.5 tons over four days, and global Gold ETFs saw July inflows of 23.5 tons, mainly in Europe and Asia. Fritsch remains sceptical that Gold can defy higher Oil and rates for long.
Price surge driven by ETF demand"This morning, the gold price rose above the USD 4,400 per troy ounce mark for the first time since early June."
"Despite the higher oil price, interest rate expectations have risen only slightly and remain lower than they were before Friday’s disappointing US labour market data."
"Gold is receiving a boost from ETF investors."
"According to data from Bloomberg, there have been inflows into gold ETFs totalling 14.5 tons over the last four trading days."
"We view the recent price rise with scepticism, as interest rate expectations are unlikely to decouple from higher oil prices on a sustained basis."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Gold extends to $4,445 above both EMAs, with $4,600 as the next resistance level and $4,000 as support below. Source: TradingView The gold market has rallied a bit, gapping higher to kick off the trading session on Tuesday as traders continue to jump into this market. That being said, we have given back some of the initial gains, as perhaps we are getting a little stretched. It has been a pretty explosive breakout. We got a little bit of a boost on Friday after the jobs report came out negative for July, but there are still concerns in the Middle East that could cause chaos in the bond market, and that is part of our problem in the gold market, as the uncertainty is something that could continue.
Technical Setup and Bond Yield Impact The bond market has been screaming higher in yield, and that works against the backdrop of owning a non-yielding asset like gold. That being said, the breakout was real. It was voluminous from the $300 range we had been in, but that doesn’t mean that the market has to go straight up in the air forever, and quite frankly, eventually gravity will get involved. That’s part of what we’re looking at here, I believe at this point.
Silver trades at $65.36 between both EMAs, with $60 as the floor below and $70 as the next key level above. Source: TradingView The silver market has been hanging around the 200-day EMA for the last couple of days, but it did show a little bit of hesitation here in early Tuesday trading right at that same 200-day EMA. The market pulling back a bit is not a huge surprise, as technical indicators are so heavily followed. A lot of longer-term traders will be looking at this for determining the trend, and as we are approaching it, quite often we do see some pushback.
Technical Levels and Yield Dynamics The 50-day EMA sits just below, and that could offer a bit of support. We’ll just have to wait and see. But I think the main story here is that the market just got a little overstretched. We can say the same thing about gold as well, and the two do tend, at least over the longer term, to move somewhat in tandem. The $60 level has been a strong support region going down to the $55 level, but now we’ll have to watch whether or not non-yielding assets get a bit of a bid with the higher interest rates being offered.
