In August, US Pending Home Sales increased by 4% compared to last month, bouncing back from a slight decline of 0.3% in July. Meanwhile, Switzerland is looking to invest in US gold-refining to avoid a 39% import tax that was introduced recently.

Gold As A Safe Haven

Gold continues to be viewed as a safe-haven asset, particularly against inflation. When the US Dollar decreases in value, gold prices typically rise. Changes in gold prices can be affected by economic issues like geopolitical tensions and fears of a recession. Investing in open markets carries risks, including potential losses and emotional stress. Investors are responsible for any losses they incur, and the opinions expressed here do not represent FXStreet’s official view. As of September 30, 2025, current market conditions require close monitoring. The latest US Consumer Price Index for August 2025 is slightly higher than expected at 3.1%, raising concerns about ongoing inflation. This situation is complicating matters for the Federal Reserve, leading to uncertainty about future interest rate changes.

Current Market Dynamics

The US Dollar Index (DXY) is around 104. If it drops further, that could be beneficial for gold prices. We’re also observing US Treasury yields, with the 10-year note currently at 3.9%, down from earlier highs this year. A continued decrease in real yields (interest rates adjusted for inflation) would make gold, which does not yield any interest, more appealing. Looking back to the Trump administration, we saw a similar trend where expectations of Fed easing and lower yields led to a rally in gold prices. This suggests that what the Fed plans to do with monetary policy significantly impacts gold. In that time, even minor indicators like Pending Home Sales influenced expectations regarding the Fed. With the current uncertainty, the implied volatility for gold options has increased. This environment may favor trading strategies that benefit from large price movements in either direction, such as long straddles or strangles. The CME FedWatch Tool now indicates that the market estimates only a 40% chance of a rate cut by the end of 2025, down from 60% just a month ago. Ongoing geopolitical issues in Eastern Europe and the South China Sea continue to drive demand for gold as a safe haven. This sustained demand helps support gold prices, even when the dollar temporarily strengthens. Traders should stay alert to these developments, as they can lead to sudden price changes. Create your live VT Markets account and start trading now.

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