Hello, my friends!

Among the most highly anticipated economic data releases this week was the August edition of the consumer price index (CPI), the nation’s best-known inflation gauge, which revealed that even as Fed policymakers are expected to resume interest rate reductions shortly, the fight against troublesome price pressures remains far from over.

On Thursday, the Labor Department reported that headline, or all-items, CPI rose 0.4% for the month, 0.1 percentage point above forecast and the fastest rate since January. That acceleration bumped the annual rate to 2.9%, 0.2 percentage point faster than the pace set in July.

Core CPI, which excludes more volatile food and energy prices, also reflected inflation’s stubbornness last month, rising 0.3% for the month and 3.1% year over year.

The resilience of consumer price pressures might preclude a rate cut altogether next week if not for the now-glaring signals pointing to a slowdown in the labor market. The same day that CPI was released, the Labor Department also announced that filings for weekly unemployment compensation rose to a seasonally adjusted 263,000…the highest in nearly four years.

Addressing the counterweight to persistent inflation represented by rising labor-market uncertainty, Seema Shah, chief global strategist at Principal Asset Management, wrote:

“Today’s CPI report has been trumped by the jobless claims report. While the CPI report is a tad hotter than expected, it will not give the Fed a moment of hesitation when they announce a rate cut next week. If anything, the jump in jobless claims will inject a bit more urgency in the Fed’s decision making, with Powell likely signaling a sequence of rate cuts is on the way.”

In other news this week:

Surprising Drop in August Wholesale Inflation Helps Clear Path to Rate Cut

Another reason why the latest consumer inflation numbers aren’t expected to derail a rate cut is because one day prior to their release, we learned that monthly inflation at the wholesale level actually declined in August.

On Wednesday, the Labor Department announced that the monthly producer price index fell 0.1% in August, which is a far better result than the 0.3% rise economists were expecting and a significant improvement from the 0.7% increase recorded in July.

The surprise drop went a long way to containing annual PPI, which rose “just” 2.6% in August, much slower than the 3.3% pace that had been forecast.

As for monthly core PPI – which like its consumer counterpart, strips out food and energy prices – that also fell 0.1% after analysts had pegged it landing at 0.3%.

Like annual headline CPI, annual core CPI benefited significantly from the big improvement in the monthly number, coming in at 2.8%. That’s much better than both the 3.5% rate forecast by economists and the 3.4% increase recorded in July.

In a statement following the announcement of August PPI, Chris Rupkey, chief economist at Fwdbonds, suggested the outright drop in monthly wholesale inflation is proof positive that tariff-induced price pressures remain largely MIA – and that it bodes well for a rate cut next week.

“The inflation shock that was not is rocketing markets higher as inflation barely has a heartbeat at the producer level…which shows the tariff effect is not boosting across-the-board price pressures yet,” Rupkey said. “There is almost nothing to stop an interest rate cut from coming now.”

12-Month Job Growth Through March Revised Downward by More Than 900,000 Jobs

Other big news this week included the release on Tuesday of an annual Labor Department report that this year revealed there were 911,000 fewer jobs created by the economy than first thought during the 12-month period ending March 2025.

Each year, the revisions are calculated by reconciling the results of the Labor Department’s monthly employment surveys with its much more accurate Quarterly Census of Employment and Wages. The time around, the differences between the two reports were notable to say the least: The revised number was well in excess of that which was projected by Wells Fargo economists, who were expecting to see it fall somewhere between 475,000 and 790,000 jobs. Additionally, the figure was more than 50% higher than the 2024 adjustment and the largest revision on record going back 23 years.

The stunning update underscored what have been persistent concerns about the accuracy of the data collection methods used to compile the monthly numbers as well as suspicions that the economy is weaker than some of the government’s headline gauges have suggested.

Regarding the latter, Oren Klachkin, market economist at Nationwide Financial, believes the massive downward revision is another critical piece of data that the Federal Reserve will use to justify a formal return to accommodative monetary policy:

“The slower job creation implies income growth was also on a softer footing even prior to the recent rise in policy uncertainty and economic slowdown we’ve seen since the spring. This should give the Fed more impetus to restart its cutting cycle.”

Small Business Optimism Rises in August Despite Ongoing Concerns About Labor Quality

Finally this week, the latest data from a key sentiment gauge suggests that America’s business owners remain broadly confident in their outlook for the economy despite concerns about the quality of available labor in the U.S.

On Tuesday, the National Federation of Independent Business reported that its Small Business Optimism Index rose 0.5 percentage point in August, to 100.8. It’s the eighth time in the previous 10 months since President Trump was reelected that the index has come in above its historical average of 98.

A collateral measure, the NFIB Uncertainty Index, dropped four points to 93, but remains above its historical average.

In a statement on the numbers, Bill Dunkelberg, chief economist of the NFIB, said:

“Optimism increased slightly in August with more owners reporting stronger sales expectations and improved earnings. While owners have cited an improvement in overall business health, labor quality remained the top issue on Main Street.”

On that note, 32% of business owners reported job openings they couldn’t fill last month. The NFIB said that the last time unfilled job openings dropped below 32% was in July 2020, while the country was still reeling from the economic effects of the pandemic.

That’s all for now; have a wonderful weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Among the more notable features of gold’s impressive march higher is the fact it has managed to sustain its upward momentum in the face of historically metals-adverse conditions such as surging interest rates and the flourishing of risk assets. Despite these ostensible challenges, gold has reached new all-time highs more than 70 times since just the beginning of 2024 and appreciated an astonishing 100% since January 2022, strongly outperforming the world’s most prominent equities indexes over the same period.

According to Amy Gower, head of metals and mining commodity strategy at Morgan Stanley, gold’s seemingly unprecedented demonstration of strength is evidence of an equally unprecedented intensification in the uncertainty which has been sitting at the foundation of gold’s jaw-dropping resilience.

“The Role of Gold Is Evolving in 2025”

“Gold has always been the go-to asset in times of uncertainty,” Gower said in a commentary earlier this week. “But in 2025, its role is evolving. Investors are watching gold not just as a hedge against inflation, but as a barometer for everything from central bank policy to geopolitical risk.”

“When gold prices move, it’s often a sign that something big is happening beneath the surface,” Gower added.

Gower’s reference to the “evolution” of gold’s function as both a tactical and strategic asset speaks to the degree to which the nature – including the complexity – of metals-favorable uncertainty has proved to be such a potent catalyst of gold prices over the last several years.

It is, in fact, the length, width and breadth of this uncertainty…comprised of an array of factors that includes an unsustainable U.S. fiscal trajectory, aggressive worlwide de-dollarization and the most dangerous geopolitical environment since World War II… which has generated sweeping levels of interest in the yellow metal from individual investors to central banks.

“Central banks are on track for another year of strong buying, with gold now representing a bigger share of central bank reserves than treasuries for the first time since 1996,” Gower said. “This is a strong vote of confidence in gold’s long-term value. Also, gold-backed exchange-traded funds, or ETFs, saw inflows of $5 billion in August alone, with the year-to-date inflows the highest on record outside of 2020, signaling renewed interest from institutional investors too.”

Gold Poised to Reach $3,800 by Year End, Says Gower

In addition to the foundational support for gold provided by the multidimensional uncertainty that Gower and so many others expect to persist, the strategist also said the likely resumption of rate cuts should further energize gold in the coming months, noting that “gold does tend to outperform after Fed rate cuts.”

So, what’s Morgan Stanley’s end-of-2025 price target for gold?

“From here, we see around 5% further upside to gold by year end, to $3,800 per ounce,” Gower said.

Since Amy Gower’s commentary aired a handful of days ago, gold already finds itself around $3,700, just 2.5% below Morgan Stanley’s $3,800 EOY price target. Whether it actually reaches $3,800 or even sustains its current price level remains to be seen, of course. But a couple of points are worth noting.

All Gas, No Brakes: Analysts See Gold Between $4,000 and $5,000 in 2026

For one thing, Morgan Stanley analysts by no means are alone in their robust expectations for gold to continue rising well into record territory. Numerous, highly credible analysts expect the metals bull to keep running through at least the foreseeable future…including those at Goldman Sachs, whose projections for 2026 range from $4,000 (base case) to as high as $5,000.

Moreover, practically no one in the analyst community is forecasting gold to suffer a meaningful correction anytime soon…a fact that State Street strategist Aakash Doshi says is even more revealing than the optimistic upside price targets many have proposed.

Which brings me here: Doshi’s fundamental point…the thing he believes is “revealed” by gold’s resistance to backsliding…is that the metal remains highly supported by a multitude of uncertainty-representative factors and conditions so significant that it’s all but impossible for a universally revered safe-haven asset like gold to materially decline in value right now.

That’s also the “something big beneath the surface” to which Amy Gower referred; it’s what she means when she says gold’s “role is evolving.”

And it’s why, at the end of the day, gold remains especially well-suited to continue serving as a valuable hedge and diversifier on behalf of so many investors at all levels.

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Hello, my friends!

In what was, by a country mile, the week’s most prominent data release, the Labor Department revealed on Friday that nonfarm payrolls increased by a positively anemic 22,000 jobs in August…well below both the 75,000 jobs projected by economists and the 79,000 jobs added in July.

As for the unemployment rate itself, that ticked up 0.1 percentage point to 4.3%…the highest it’s been in nearly four years.

The fresh numbers are just the very latest sign of rapidly growing weakness in the labor market; a weakness that already was widely expected to prompt a quarter-point rate cut later this month and which now, following this latest jobs report, may have some policymakers considering a reduction by 50 basis points.

It wasn’t just the feeble August data that added to the consternation over the condition of the labor market. The report also contained a troubling downward revision to the figures for June, revealing that instead of gaining 14,000 jobs that month, the economy actually suffered a net loss of 13,000 jobs…the first outright decline since December 2020.

Major indexes fell only modestly on Friday in the wake of the news. The consensus view is that while markets obviously are concerned about what the jobs numbers say about the economy, they’re anticipating that growing signs of labor-market weakness all but ensure a rate cut by the Fed this month. For the week, the Dow Jones Industrial Average was down 0.32%, but both the S&P 500 and Nasdaq Composite finished in the black, up 0.33% and 1.14%, respectively.

Also this week:

Unemployed Outnumber Available Jobs for the First Time Since Pandemic

Other widely followed labor-market metrics released earlier in the week also implied that the jobs picture may, indeed, be in the process of darkening some.

On Wednesday, the Labor Department released the latest edition of its Job Openings and Labor Turnover Survey – also known as the JOLTS report – which revealed not only that U.S. job openings fell to a 10-month low in July, but also that the number of unemployed Americans exceeded the number of available jobs for the first time since the pandemic.

According to the report, job openings in July dropped by 176,000, to 7.181 million, the lowest since September 2024 and roughly 40% below where they were at three years ago.

Of particular note is the 181,000 fewer job openings in the areas of health care and social assistance recorded in July. This marks the second straight month these sectors have seen a decline in available positions, which some observers regard as especially concerning given the degree to which job growth in these areas have buttressed the overall job market recently.

Private-Sector Jobs Number for August Reflects Pervasive Concerns About Economy

The following day, Thursday, ADP checked in with its contribution to the week’s gloomy updates on the jobs market, reporting that the private sector created just 54,000 jobs in August. That’s well below the 75,000 jobs projected by economists and significantly below the 106,000 jobs added in July.

Although ADP’s data has proved to be an unreliable predictor of the government’s nonfarm payrolls numbers which routinely follow in subsequent days, analysts say the bigger, more important issue is that each of the nation’s highest-profile labor-market gauges has reflected noticeable weakening over the course of the year so far.

“The year started with strong job growth, but that momentum has been whipsawed by uncertainty,” said Nela Richardson, chief economist of ADP. “A variety of things could explain the hiring slowdown, including labor shortages, skittish consumers, and AI disruptions.”

Whatever the culprit(s), this week’s ADP report added more fuel to the growing rate-cut fire, with Jamie Cox, managing partner for Harris Financial Group, noting:

“ADP data continue to reinforce the narrative that the rate of positive change in the labor market has slowed significantly, so you can expect the Fed to tilt its balance of risks to cut rates in September.”

Manufacturing Sector Remained in Contraction Last Month

In other news this week, the Institute for Supply Management reported on Tuesday that its Manufacturing Purchasing Managers’ Index increased modestly in August, but not enough to lift the widely followed metric out of the contraction territory in which it’s persisted since March.

According to ISM’s numbers, Manufacturing PMI increased by 0.7 percentage point last month to come in at 48.7. Although technically an improvement, the result isn’t much to crow about; the reading is two-tenths of a point less than economists were expecting and marks the sixth straight month its landed below the key level of 50 that distinguishes contraction from expansion in the nation’s manufacturing sector.

The overall index might have seen a bigger gain last month if not for largely offsetting results from two critical component measures: the New Orders and Production Indexes. While the New Orders Index jumped a little more than four points in August to land at 51.4 and squarely back in expansion, the Production Index fell by nearly the same increment, pushing that metric into contraction.

Comments from survey respondents indicate that volatile tariff policy…along with associated uncertainty in the broader economy…is making life difficult for U.S. producers, with one manufacturer saying:

“Orders across most product lines have decreased. Financial expectations for the rest of 2025 have been reduced. Too much uncertainty for us and our customers regarding tariffs and the U.S./global economy.”

Fed Beige Book Tells Tale of Impending Slowdown

Finally this week, the Federal Reserve on Wednesday published the sixth of eight Beige Books scheduled for release in 2025, with its contents seeming to underscore the growing economic uncertainty generated by the White House’s aggressive tariff policy.   

Beige Books contain more qualitative – even anecdotal – information about economic conditions across all 12 Fed districts. The insights are gathered through interviews with business contacts and other key observers in each district. Beige Books…so called because of the color of their covers…are published two weeks before each meeting of the Federal Open Market Committee and consulted by central bank officials as they consider how to proceed with monetary policy.

Among the highlights of this most recent edition was an acknowledgment by the Fed that there was “little or no change in economic activity since the prior Beige Book period,” along with suggestions that evidence of a tariff-induced slowdown is revealing itself.

“Nearly all districts noted tariff-related price increases, with contacts from many districts reporting that tariffs were especially impactful on the prices of inputs,” the Federal Reserve said. Relatedly, the central bank also revealed that “across districts, contacts reported flat to declining consumer spending because, for many households, wages were failing to keep up with rising prices.”

Observers say that while the latest Beige Book serves as additional confirmation of a looming slowdown, it likely won’t make much difference to Fed policymakers who likely have already decided that a rate cut of between 25 and 50 basis points is in order when they meet again on September 16.

That’s all for now; have a terrific weekend!This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Now that the gold futures price finally appears to be breathing easier in the rarified air above $3,500 per ounce, observers are wondering aloud as to just what might be next for the yellow metal.

The growing belief that a resumption of rate cuts could be imminent has energized chatter suggesting $4,000 gold may be around the corner. But even as many are setting their sights on $4,000, strategists at global investment banking giant Goldman Sachs are going a step further, now suggesting that the practically stratospheric $5,000 price level could come close to being achieved before the current metals bull market has reached its climax. If it happens, says Goldman, the core driver is likely to be an intensification of already-mounting concerns about Federal Reserve independence.

Goldman Analysts Say Damage to Fed Independence Would Push Gold Considerably Higher

In a note, the analyst team…which includes Samantha Dart, Goldman’s co-head of global commodities research, said, “A scenario where Fed independence is damaged would likely lead to higher inflation, lower stock and long-dated bond prices, and an erosion of the dollar’s reserve-currency status.”

“In contrast,” the strategists added, “gold is a store of value that doesn’t rely on institutional trust.”

The Goldman team says $4,000 is their baseline price target for gold over the next year. That target price rises to $4,500 if the analysts’ tail-risk scenario comes to pass, one that sees central bank gold demand increase to 110 metric tons per month and inflows into gold-backed exchange-traded funds revisit the record levels set during the pandemic.

And $5,000 gold? The analysts believe we could see it if a profound loss of faith in U.S. Treasuries…triggered in no small way by persistent and growing concerns about Fed independence…drives just 1% of the privately owned Treasury market (investors other than the federal government and the Federal Reserve) into the metal.

“Gold Remains Our Highest-Conviction” Trade in the Commodities Space

“We estimate that if 1% of the privately owned U.S. Treasury market were to flow into gold, the gold price would rise to nearly $5,000 an ounce, assuming everything else constant,” the Goldman analysts said. “As a result, gold remains our highest-conviction long recommendation in the commodities space.”

It remains unclear at how much risk Fed independence really is, although there’s no shortage of notables who’ve gone on the record to voice their concerns about it. In a recent interview, for example, European Central Bank President Christine Lagarde suggested that focused efforts by President Trump to push out Fed Chair Jerome Powell or Fed Governor Lisa Cook would pose “a very serious danger for the U.S. economy and the world economy.”

As for me, rather than deciding how much stock to put in the threat of a compromised Fed or even in specific price targets, I remain focused on what I believe is the broader message about gold being transmitted by Goldman analysts and others right now: Namely, that the unprecedented uncertainty which has helped power the price of gold higher by more than 100% over the last three years is poised to continue through the foreseeable future. And that as long as it does, investors of all stripes would do well to view gold with the same “conviction” with which Goldman’s esteemed analysts see it.

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Throughout much of this year, the price of gold had been hanging around $3,500 per ounce, occasionally peeking its head above the vaunted price level while failing to surpass it in any meaningful way.

That changed at the end of August, when the gold futures price once again powered above $3,500 – and, this time, rode the latest burst of momentum past $3,600 for the first time ever.

For many analysts, gold’s forceful breaching of what had proved to be a rather stubborn level of price resistance in the shorter term has effectively confirmed what they already “knew” intuitively: that the gold bull – along with the comprehensive uncertainty feeding it – remain very much intact.

And that the $4,000 price target many have eyed for some time remains a sound, viable projection.

“Investors Have Not Missed the Boat”

“We have been waiting for a spark to ignite gold, and when we look back, we will see that this was the time,” Michele Schneider, chief strategist at MarketGauge.com, recently said. “From a technical perspective, the longer a consolidation phase persists, the stronger the breakout move is likely to be.”

“I would say $3,800 to $4,000 is extremely practical, without getting too hyperbolic,” she added. “That would probably be my next legitimate target before we might see some profit-taking. Even at these prices, investors have not missed the boat. When investors start buying the strength – buying on these important breakouts – that’s when parabolic moves happen.”

Although Schneider believes there’s a multitude of drivers fueling the uncertainty which lies at the heart of gold’s upward momentum, she suggests the Fed’s apparent shift to prioritizing labor-market concerns over current inflation could be the spark which pushes the metal the rest of the way to $4,000.

In fact, since Fed Chair Jay Powell aired his unexpectedly dovish take on monetary policy at Jackson Hole, traders’ expectations of a September rate cut have surged from a little more than 70% to nearly 100%.

Schneider: Gold’s Surging Over “a General Lack of Faith” the Fed Will Keep Fighting Inflation

“ What we’re seeing is that there’s just a general lack of faith that the Fed is going to do what it needs to do, that the government knows what it’s doing,” Schneider said, referring to the growing likelihood the central bank will resume rate reductions in spite of ongoing price pressures. “ There’s this flight into gold because there are worries all over the place about fiat currency.”

Indeed, while rate cuts are known to strengthen gold by lowering the opportunity cost of holding the metal, it’s really the potential fiscal implications associated with cutting rates in the face of higher inflation that are poised to send the metal soaring from here.

As another respected strategist, Aakash Doshi of State Street Investment Management, recently told ABC News:

“The Fed is cutting because of a weak labor market but inflation is still elevated. That supports alternative fiat assets like gold.”

Whether gold reaches $4,000 in relatively short order remains to be seen. But if it doesn’t, neither should anyone reasonably expect it to lose much ground, given both the number and potency of the metals-favorable catalysts in play right now.

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

Hello, my friends!

It likely comes as no surprise that the week’s most eagerly anticipated data was generated by yet another inflation gauge: the personal consumption expenditures (PCE) price index, known to be the Federal Reserve’s preferred measure of inflation because of how (relatively) well it accounts for changes in consumer behavior.

On Friday, the Commerce Department revealed the PCE numbers for July, which showed that while inflation remains well moderated from the near-10% levels at which it sat three years ago, price pressures may be reenergizing because of President Trump’s aggressive tariff policy.

According to the government’s report, the headline, or all-items, PCE index climbed at an annual rate of 2.6%, equal to the pace set in June; as for the core index, which strips out volatility-prone food and energy prices, that accelerated 0.1 percentage point to land at 2.9%…the fastest rate for core PCE since February.

For now, the prospect of a tariff-induced inflation spike doesn’t seem to be much of a cause for concern on Wall Street. Markets were relatively unmoved by Friday’s numbers and closed out August solidly higher from where they started: the Dow Jones Industrial Average surged 3% higher for the month, while the S&P 500 and tech-heavy Nasdaq Composite rose 2% and 1.6%, respectively.

Expectations for an interest rate cut in September weren’t dimmed by the inflation figures, either, with traders still seeing a 90% chance the Federal Reserve resumes rate reductions next month.

In other news of note this week:

Durable Goods Orders Rise…and Fall…in July

The Commerce Department reported on Tuesday that orders for durable goods – products made to have an average life of three years – fell 2.8% in July, due largely to weak sales of commercial aircraft; new orders for planes…primarily from Boeing…tumbled a whopping 32.7% last month.

But a closer look at the numbers reveals that the current state of product orders, overall, may not be as unfortunate as the headline metric suggests.

For one thing, that near-3% decline is better than the 4% drop economists had expected, and much improved over the 9.4% drop recorded in June.

Beyond that, a look at last month’s activity sans notoriously volatile sectors reveals durable goods orders actually grew at a solid pace in July.

For example, durable goods order ex. transportation climbed 1.1% last month. And so-called core capital goods orders, which exclude both transportation and defense, also surged a relatively robust 1.1%. That’s a big turnaround from June, which saw orders for core capital goods tumble 0.6%.

Indeed, some observers view July’s growth in core capital goods orders…considered a proxy for business investment in equipment…to be evidence that companies could be thriving in spite of tariff distress.

As Stephen Stanley, chief economist at Santander Capital Markets, said in a note:

“Despite overwhelming anecdotal commentary suggesting that many companies put their investment projects on hold as they sought to navigate the choppy waters caused by policy-related uncertainty, the data show that firms have in fact continued to invest at a reasonably healthy pace.”

Key Regional Data Underscores Pervasive U.S. Manufacturing Weakness  

Also making news this week were a couple of key regional gauges of U.S. economic health, both of which underscored the manufacturing-sector weakness which has been evident in national gauges such as those from S&P Global and the Institute for Supply Management.  

On Monday, the Federal Reserve Bank of Dallas reported that the index derived from its Texas Manufacturing Outlook Survey – a monthly assessment of factory activity in the Lone Star state – fell back into contraction this month after landing in expansion territory last month for the first time all year.

According to the Dallas Fed, the survey’s index for general business activity declined to -1.8 in August from 0.9 in July. Readings below zero imply contraction in the manufacturing sector, while those above zero imply that the sector is expanding.

Of particular note was the decline in the survey’s Production Index…a component measure of the broader metric…which tumbled nearly 30% this month. Noteworthy, as well, is the number of survey respondents who said they’d been negatively impacted by tariffs this year: roughly 70%.

“Tariffs and the continuous contradictory, knee-jerk announcements that are a complete change in governmental/regulatory policy [are issues of concern],” said one manufacturer, while another made this ominous declaration:

“We are probably going out of business within 90 days.”

The following day, Tuesday, the Richmond Fed chimed in with its update on manufacturing conditions in the Mid-Atlantic states, noting that activity in August continued to reflect the persistent weakness which has been characteristic of the region for months.

According to the report, the composite index derived from what’s known as the Fifth District Survey of Manufacturing Activity did rise 13 points in August. However, the metric remained squarely in negative territory because of how low it was the month before. The index landed at -20 in July, which is why August’s sizable point gain was able to push the gauge no higher than to -7 this month.

Unsurprisingly, all three of the overall measure’s component indexes followed the same pattern in August, rising substantially from July’s readings but nevertheless remaining in negative territory: The Shipments Index increased to -5 from -18; the New Orders Index rose to -6 from -25; and the Employment Index climbed to -11 from -16.    

Consumer Confidence Index Lands in “Pessimism” Territory for Sixth Consecutive Month

Finally this week, a widely followed gauge of consumer sentiment revealed little change in Americans’ uncertain outlook for the economy, more broadly, as well as for their own personal economic fortunes.

On Tuesday, The Conference Board reported that its proprietary Consumer Confidence Index (CCI) came in at a reading of 97.4 this month. Although that’s just modestly below the upwardly revised 98.7 posted in July, August marks the sixth straight month the index landed below the neutral reading of 100. CCI measures below 100 imply greater pessimism, overall, among Americans.

The story was largely the same with the Expectations Index, a component measure of the headline metric that evaluates consumers’ six-month outlook for the economy.

In August, the Expectations Index also saw a small decline, ticking down 1.2 points to 74.8. But while the magnitude of change was relatively slight, the reading marked another month in which the subindex landed below the critical level of 80, a threshold which implies recession could lie ahead.

Stephanie Guichard, senior economist at The Conference Board, said in a statement that concerns over the potential impacts of White House trade policy continue to weigh heavily among consumers, noting:

“Consumers’ write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices. Meanwhile, references to high prices and inflation, including food and groceries, rose again in August. Consumers’ average 12-month inflation expectations picked up after three consecutive months of easing and reached 6.2% in August—up from 5.7% in July but still below the April peak of 7.0%.”

Anxiety over the outlook for the labor market remains prominent among Americans, as well, with Guichard also emphasizing that “consumers’ appraisal of current job availability declined for the eighth consecutive month.”

Persistent pessimism in consumers’ view of the economy can be a key consideration of Fed policymakers who are weighing how to proceed with possible changes to interest rates. Some observers, like renowned investor Louis Navellier, believe the chronic pessimism which now characterizes consumer sentiment effectively demands that Fed policymakers resume rate reductions.

“It is imperative that the Fed cuts key interest rates and continues to cut in the upcoming months to bolster consumer sentiment and avoid a recession,” Navellier said recently.

That’s it for now; have a marvelous weekend!

This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

As you likely know, gold reached a new intraday high last Friday, surpassing the previous high of $3,500 reached in April and topping out at $3,534 (continuous contract) per ounce.

The new high came on news that imports of gold bars would be subject to tariffs. Shortly thereafter, however, the White House characterized the report as “misinformation,” with President Trump confirming on Monday via Truth Social that “gold will not be tariffed.”

By Wednesday of this week, gold had retreated about $130 from its latest record high. But that means the metal nevertheless remains relatively close to its highest-ever price.

That resilience is worth a closer look. Since the beginning of 2022, the price of gold has climbed roughly 85%; since January of 2024, gold has achieved new all-time highs nearly 70 separate times…a remarkable record of achievement. But what makes it even more noteworthy is that gold’s powerful push higher in recent years has come amid circumstances universally considered to be adversarial to the metal’s success.

Among the most prominent of those circumstances is the sharp rise in interest rates during 2022 and 2023, as well as the persistence of those higher rates to this day.

Gold Couldn’t Be Contained by the Fastest Cycle of Rate Hikes in 40 Years  

Over a strikingly short span of time…from March 2022 through July 2023…the Federal Reserve raised the benchmark federal funds rate 11 times and by 525 basis points in its effort to rein in runaway price pressures. The explicit increase in nominal interest rates combined with the rates of inflation over this period resulted in an overall increase in real rates over this period, as well – an increase that has remained largely intact to this day.

Despite this increase, however, rate-sensitive gold has managed to rise significantly over the last three years, as I mentioned just a minute ago.

But this epic surge by gold has taken place in the company of not only the fastest nominal rate increase in four decades…but also the record-breaking momentum demonstrated recently by equities.

Record Stocks? Gold Has Outperformed All Major U.S. Indexes So Far in 2025

Typically, periods that see risk assets characterized by great strength are oftentimes hostile to gold. There’s no great mystery as to why; when investors are confident in the near-term growth potential of the economy and financial markets, risk-off assets such as gold tend to fall in disfavor.

Yet during this most recent wave of strength among equities, gold has managed to remain exceptionally resilient, largely holding on to all of the gains it’s made during this metals bull market even as it has been outperformed by the three major U.S. indexes over the past few months.

Indeed, despite a recent surge that has seen the S&P 500 and Nasdaq Composite achieve new all-time highs, gold’s 28% rise since the beginning of January still far outdistances the increases logged so far this year by the S&P and Nasdaq as well as the Dow Jones Industrial Average.

So, what gives? How has gold managed to keep its strength despite the onslaught of rate- and market-based Kryptonite?

Uncertainty: The Biggest and Baddest Influence Over Gold Right Now

Simple. In a nutshell, the impact of traditional gold headwinds like higher rates and surging markets is being more than offset by a traditional gold tailwind that’s blown with great strength over the last several years: substantial economic, fiscal and geopolitical uncertainty.

It’s an uncertainty fueled by a multitude of drivers, including:

• an ever-worsening U.S. fiscal trajectory;
• ongoing deglobalization trends expected to generate an array of consequences, including higher structural inflation on a global scale and a lasting uptick in international tensions;
• America’s continued and aggressive use of dollar-based economic sanctions;
• continued related efforts at de-dollarization by many of the world’s central banks;
• and an anticipated increase in social and political unrest around the world.

The list could be a good deal longer – but you get the picture.

It’s not really the case, then, that there’s been a paradigm shift in the way gold reacts to higher rates and robust markets; those conditions always will tend to act as hinderances to gold. But remember that gold is subject to being moved in one direction or another by multiple influences. Each of the headwinds and tailwinds discussed here is every bit as relevant to gold today as it’s ever been. It’s just that comprehensive and multifaceted uncertainty has proved to be such an acutely strong driver of gold in recent years that the metal’s properties as a safe–haven asset have been more vigorously energized than its properties as a monetary asset (such as rate sensitivity).

The safe-haven properties of gold that have provided the metal with so much energy are expected to remain highly optimized as worrisome uncertainty continues to be a central feature of the global order. Should that projection, in fact, be realized, the investment terrain is likely to remain fertile for gold through at least the foreseeable future.  

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