Gold at $3,400 as Markets Await Aug 28, 2025 PCE Data

Gold Steady as Investors Eye Friday’s Inflation Data

Gold prices are holding steady as investors await Friday’s crucial inflation report: the personal consumption expenditures (PCE) index, the Federal Reserve’s preferred gauge of inflation. Spot gold is hovering near $3,400 an ounce, with December futures around $3,447. Market participants are closely watching the PCE because its readings will influence expectations for interest-rate policy and the outlook for safe-haven assets.

Markets currently place a high probability on a September rate cut, with the CME FedWatch tool indicating roughly an 88% chance. Even so, Fed officials are signaling caution. New York Fed President John Williams has emphasized the importance of incoming data before making a judgment on policy. Consensus estimates expect July’s headline PCE to remain around 2.6% year-over-year, while the core PCE — which excludes volatile food and energy components — is forecast to climb by about 0.2% month-over-month and register roughly 2.7% on an annual basis.

The PCE figures matter for gold because inflation trends and the Fed’s response affect real interest rates; lower real yields and heightened economic uncertainty typically support demand for non-yielding assets like gold. Other precious metals showed mixed moves in recent trading: silver inched higher, while platinum and palladium were relatively steady. Traders and investors are balancing anticipated policy easing against still-elevated inflation readings, making the immediate outlook for bullion more dependent on the interpretation of the PCE release than on headline price momentum.

Trump’s Attempt to Fire Fed Governor Rattles Markets, Lifts Gold

An unprecedented political development weighed on markets this week when President Trump announced he was attempting to remove Federal Reserve Governor Lisa Cook over mortgage fraud allegations that have not been proven. Cook has retained attorney Abbe Lowell and is contesting the action, calling the move illegal. The episode marks a rare and significant challenge to the Fed’s institutional independence and has added an element of political risk to financial markets.

The market response was immediate: the dollar index declined about 0.3%, and stock futures fell amid the uncertainty. For gold investors, such political disruption tends to reinforce the metal’s role as a safe haven because bullion carries no counterparty risk. Gold has already advanced strongly this year, rising roughly 30%, and concerns about central bank independence and broader political volatility can add further support to the rally. Related assets such as real estate and some commodities have also seen increased interest, while cryptocurrencies remain volatile and unpredictable in the face of shifting risk sentiment.

Japan’s Central Bank Flags U.S. Tariff Risks

Bank of Japan board member Junko Nakagawa warned that lingering uncertainty around U.S. trade policy, including tariff risks, could weigh on business confidence in Japan and beyond. Such uncertainty can make firms hesitant to invest or expand, which in turn could slow global growth if it persists. The upcoming “tankan” business sentiment survey, scheduled for October 1, will provide a fresh snapshot of how Japanese companies are handling this trade-related uncertainty.

The BOJ itself faces a delicate policy balance. After stepping back from massive stimulus, the bank has already moved policy rates to about 0.5% this year. Surveys indicate that a sizable portion of economists expect another quarter-point increase by year-end, reflecting the central bank’s response to persistent price pressures. At the same time, ongoing food inflation and rising wages in Japan add to the challenges of anchoring inflation expectations, meaning policymakers must weigh growth risks against the need to contain inflationary pressures.

Nvidia Crushes Earnings, But Bubble Talk Grows Louder

Nvidia reported another exceptionally strong quarter, with revenue jumping about 47% year-over-year, and CEO Jensen Huang described the surge in artificial intelligence chip demand as the start of “the next industrial revolution.” Demand from cloud providers and enterprise customers for AI-related hardware remains intense and continues to drive headline performance for the semiconductor leader.

Yet the enthusiasm has revived concerns among some market observers about stretched valuations and the potential for a speculative excess similar to past technology bubbles. Critics point to very high valuations, massive capital flows into AI-related names, and a widening gap between industry promises and near-term real-world outcomes. If the AI growth narrative were to lose momentum, overleveraged and highly valued technology stocks could experience sharp corrections. Historically, during periods when speculative frenzies unwind, investors often turn to traditional safe havens like gold.

Fidelity: Gold’s Bull Market Has Room to Run

Fidelity International’s Ian Samson argues that gold’s bull market is not yet over. Gold has risen strongly this year — up roughly 27% in 2024 and about 28% year-to-date through late August — and some portfolio managers have increased their allocations to the metal. Several Fidelity funds, for example, have reportedly doubled their gold exposure from a typical 5% allocation to around 10%, reflecting a strategic tilt toward bullion amid the current macro backdrop.

Samson’s bullish case rests on a combination of factors: declining nominal rates, sticky inflation, slowing economic growth, and a softer dollar can all support higher gold prices. Strong central bank purchases by countries such as China, India, and Turkey, together with constrained supply dynamics, further bolster the argument for continued upside. Based on these conditions, Samson sees a potential path for gold toward higher price targets over the coming months and years, drawing comparisons to long prior gold runs when the metal delivered sustained returns. As he put it, “This bull market is far from over.”