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Thursday, August 21, 2025
What’s happening: Gold prices rose on Wednesday amid weakness in the US dollar.
What happened: The latest minutes from the Federal Reserve’s August meeting showed that policymakers remain concerned about the labour market and inflation.
Investors continued to add safe havens to their portfolio as US President Donald Trump remained in conversation with the premiers of Russia and Ukraine.
Why it matters: US President Donald Trump recently met with Ukraine’s President Volodymyr Zelensky and European leaders to discuss ending the ongoing war with Russia. Trump announced that he had spoken with Russia’s President Vladimir Putin following the meeting.
Meanwhile, Russia said that attempts to discuss security issues related to Ukraine without the Russian Federation are a “road to nowhere.”
The US dollar moved lower on Wednesday after Trump called on Fed Governor Lisa Cook to resign, intensifying his efforts to gain control over the central bank.
Trump has been urging Fed Chairman Jerome Powell to cut interest rates to stimulate the economy, while Powell has held back citing inflationary concerns due to the aggressive tariff policies. Investors expect a more dovish appointment by Trump following the end of Powell’s term in May.
Meanwhile, Goldman Sachs maintained its mid-2026 gold forecast of $4,000 per ounce amid strong demand by central banks and ETF inflows.
Weakness in the US dollar lent support to gold on Wednesday, as a lower greenback makes metals more affordable for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell to 98.22.
Gold prices gained 0.9% to close at $3,388.50 an ounce on Wednesday.
In other metals trading, silver surged to $37.773 an ounce, copper rose to $4.44 and platinum climbed to $1,341.6, while palladium settled at $1,121.40.
What to watch: Investors awaited Powell’s speech at the Fed’s annual Jackson Hole symposium for insights into future interest rate cuts. Ongoing talks to end the Russia-Ukraine war will also remain in focus.
Data on initial jobless claims (1630 UAE Time), S&P Global manufacturing PMI (1745 UAE Time) and services PMI (1745 UAE Time) from the US will be released today. Initial jobless claims in the US, which fell by 3,000 from the previous week to 224,000 in the first week of August, are expected to rise to 225,000 in the latest week. Analysts expect the S&P Global US manufacturing to decline to 49.5 in August from 49.8 in July, while the services PMI is projected to ease to 54.2 in August from 55.7 in July.
Context: Equity markets in Europe closed mixed on Wednesday as investors assessed the latest economic data.
Details: Eurozone’s headline annual inflation rate came in unchanged versus the previous month at 2% in July, in-line with the flash reading. The figure was slightly higher than market estimates of 1.9%. Hourly labour costs climbed by 3.7% year-over-year in the second quarter, up from 3.4% in the previous quarter.
Meanwhile, UK’s inflation rate came in higher than expected, with CPI rising 3.8% year-over-year in July. This was the fastest pace since January 2024 and surpassed market expectations of 3.7%.
Industrial giants were among the biggest losers on Wednesday, with shares of Airbus, Siemens, and Rolls Royce settling lower following strong momentum earlier during the week. However, consumer defensive stocks rose, with shares of L’Oreal and AB InBev recording gains during the session.
The STOXX Europe 600 Index rose 0.23% to close at 559.09 on Wednesday. London’s FTSE 100 jumped 1.08% to settle at 9,288.14. However, Germany’s DAX 40 and France’s CAC 40 lost 0.60% and 0.08%, respectively.
What to watch: Investors await the release of data on Eurozone’s HCOB composite PMI Flash (1200 UAE Time), HCOB manufacturing PMI (1200 UAE Time) and HCOB services PMI (1200 UAE Time) today. The HCOB Eurozone composite PMI, which climbed to 50.9 in July, is expected to decline to 50.7 in August. Analysts expect manufacturing PMI to decline to 49.5 in August from 49.8 in July, while services PMI is projected to fall to 50.8 from 51.0 in the previous month.
Markets will also continue monitoring the ongoing talks between the US and Russia related to Ukraine.
Other Markets: US trading indices closed mixed on Wednesday, with the S&P 500 and Nasdaq 100 down by 0.24% and 0.58%, respectively, and the Dow Jones index up by 0.04%.
Ukraine’s commander-in-chief Oleksandr Syrskyii said Russia’s military forces are intensifying their pressure near Lyman in the north of Donetsk. The news sent the RUB/USD pair higher in forex trading this morning.
Japan’s S&P Global manufacturing PMI rose to 49.9 in August, from 48.9 in July. The latest reading topping market estimates of 49 lent support to the JPY/USD forex pair.
New Zealand’s trade deficit shrank to NZ$0.578 billion in July, from NZ$1.022 billion in the year-ago period, which sent the NZD/USD pair lower in forex trading this morning.
South Korea’s producer prices climbed 0.5% year-over-year in July, matching the previous month’s pace, which lent support to the KRW/USD forex pair.
Argentina’s trade surplus declined to $0.988 billion in July, from $1.459 billion in the year-ago period, which sent the ARS/USD pair lower in forex trading this morning.
Eurozone’s construction output (1300 UAE Time) and consumer confidence flash (1800 UAE Time), UK’s S&P Global manufacturing PMI (1230 UAE Time), S&P Global services PMI (1230 UAE Time), S&P Global composite PMI (1230 UAE Time) and CBI industrial trends orders (1400 UAE Time), France’s 2028 OAT auction (1300 UAE Time), 2030 OAT auction (1300 UAE Time), 2031 OAT auction (1300 UAE Time), 2032 Index-Linked OAT auction (1400 UAE Time), 2040 Index-Linked OAT auction (1400 UAE Time) and 2053 Index-Linked OAT auction (1400 UAE Time), Canada’s CFIB business barometer (1500 UAE Time), PPI (1630 UAE Time) and raw materials prices (1630 UAE Time), South Africa’s building permits (1500 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), Mexico’s retail sales (1600 UAE Time), US Philadelphia Fed manufacturing index (1630 UAE Time), continuing jobless claims (1630 UAE Time), S&P Global composite PMI (1745 UAE Time), existing home sales (1800 UAE Time), CB leading index (1800 UAE Time), EIA natural gas stocks change (1830 UAE Time), 4-week Bill auction (1930 UAE Time), 8-week Bill auction (1930 UAE Time), 15-year Mortgage Rate (2000 UAE Time), 30-year Mortgage Rate (2000 UAE Time) and 30-year TIPS auction (2100 UAE Time), Argentina’s consumer confidence (1900 UAE Time) and retail sales (2300 UAE Time), as well as Mexico’s monetary policy meeting minutes (1900 UAE Time).
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