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Fed & yields

Fed’s Policy Trap Fuels Gold Bull Market: Caught Between Rising Unemployment and Sticky Inflation

Fed Takes Conservative Stance on 2025 Rate Cuts
Fed Takes Conservative Stance on 2025 Rate Cuts

Gold prices are consolidating near $3,355-$3,360 (spot) and $3,410 (futures) as investors position for a potential stagflation scenario—a combination of slowing economic growth and persistent inflation.

Following disappointing U.S. jobs data that showed only 73,000 jobs added versus 150,000 expected, markets now price an 81% chance of a Fed rate cut in September.

Citigroup has raised its 3-month gold target to $3,500, viewing stagflation as the base case rather than a tail risk. The upcoming CPI report on Tuesday will be crucial, with a softer inflation reading likely to push gold through resistance at $3,450.

Eight more from the desk

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