Global financial markets are showing mixed signals as investors eagerly await crucial US economic data that could influence the Federal Reserve’s decision on interest rate cuts. Gold prices have risen, with US gold futures reaching $2,535.90 per ounce, as expectations of rate cuts increase. This aligns with Goldman Sachs’ bullish outlook on gold, maintaining a target of $2,700/oz by early 2025, citing imminent Federal Reserve rate cuts and ongoing emerging market central bank buying.European stock markets have opened weakly, with the STOXX 600 index showing little change and mining companies facing losses due to concerns over diminishing demand for industrial metals. The US dollar index remains stable around 101.6 points, near a two-week high against major currencies like the euro and yen.Investors are particularly focused on upcoming US data releases, including the ISM manufacturing survey and the jobs report on Friday. Economists forecast the ISM manufacturing index to improve to 47.5 in August, though still in contractionary territory, and expect a rise of 160,000 in non-farm payrolls with a dip in the unemployment rate to 4.2%.Market participants currently see a 69% chance of a 25-basis-point interest rate cut and a 31% chance of a 50-basis-point cut at the Federal Reserve’s mid-September meeting. This anticipation has contributed to gold’s 21% rise this year, reaching a historic high of $2,531.60 per ounce on August 20.As the financial world braces for these key economic indicators, the outcomes are likely to have significant implications for various asset classes, including stocks, bonds, currencies, and commodities, potentially reshaping investment strategies in the coming months.
Key points
- Markets await crucial US economic data that could influence Federal Reserve’s rate cut decision.
- Gold prices rise as rate cut expectations increase, with Goldman Sachs maintaining a bullish $2,700/oz target for early 2025.
- US dollar index remains stable near two-week highs against major currencies.
- Investors focus on upcoming ISM manufacturing survey and jobs report, with specific forecasts for each.
