Gold Extends Rally as Weak US Jobs and Sentiment Data Cement Fed Rate-Cut Bets
Gold prices rose by 0.44% on Friday, closing the week with strong bullish momentum as markets priced in a near-certain chance of the Federal Reserve easing next week. The precious metal traded at $3,649, after dipping to a daily low of $3,630, with investor demand fueled by deteriorating US labor market data and weaker consumer sentiment.
The University of Michigan’s September Consumer Sentiment report came in below expectations, while five-year inflation expectations unexpectedly ticked higher. This combination, alongside a significant $911,000 payroll revision earlier in the week and the most significant increase in jobless claims in four years, provided further evidence of a cooling US economy. Traders are increasingly convinced that the Fed has little choice but to act at its September 17 meeting, with markets now assigning overwhelming odds to a 25-basis-point rate cut.
Fed Prepares for Policy Shift as Powell’s Warnings Materialize
Fed Chair Jerome Powell’s Jackson Hole remarks three weeks ago signaled that policymakers were open to rate adjustments, stressing that the labor market was cooling faster than anticipated. With unemployment claims rising and household sentiment slipping, those warnings have now translated into a strong policy response. Analysts expect the Fed to not only deliver a cut next week but also update its Summary of Economic Projections (SEP) to reflect a more accommodative path for the remainder of the year.
Geopolitical tensions are also keeping safe-haven demand elevated. US President Donald Trump escalated his rhetoric against Russia, warning of “tough” sanctions if diplomacy fails. This backdrop of political risk, combined with expectations of monetary easing, provided a double tailwind for gold.
Technical Outlook: Bulls Eye Fresh Highs Near $3,700
From a technical perspective, gold has continued to consolidate its gains after reaching a record high of $3,674 on September 9. The Relative Strength Index (RSI) indicates overbought conditions, suggesting the metal may experience short-term pullbacks. However, as long as prices hold above $3,600, the broader uptrend remains intact. A breakout above $3,650 would put the $3,700 psychological level in play, with further upside targets at $3,750 and $3,800. On the downside, failure to defend $3,600 could expose support at $3,550 and the April peak of $3,500.
US Dollar Recovery Falters as Labor Market Weakness Dominates Headlines
The US Dollar Index (DXY) briefly bounced on Friday but struggled to break above 97.80, leaving it trapped below the 98.00 mark and firmly within a bearish channel. The greenback’s limited upside highlights how strongly the market is focused on labor market weakness rather than inflation surprises.
Thursday’s data showed consumer inflation picking up moderately, but the sharp increase in weekly jobless claims overshadowed the print. Investors are increasingly convinced the Fed will have to cut rates not only next week but potentially again before year-end.
Technical Outlook:
Technically, DXY remains vulnerable. Immediate support lies at 97.50, with a more critical zone at 97.10–97.25. A break lower would expose July’s 96.90 lows. On the upside, buyers need a push above 98.15–98.50 to shift sentiment toward a sustainable recovery.
Bitcoin Weekly Forecast: BTC Extends Recovery as Traders Embrace Risk-On Sentiment
Bitcoin had a positive week, rising nearly 4% to stabilize around $115,000 on Friday. Institutional inflows and corporate accumulation fueled the rally, while expectations of Fed easing kept risk appetite alive across equities and cryptocurrency markets. Some traders are even considering a larger 50-basis-point cut, although the baseline remains at 25 bps.
US macroeconomic data supported this move. Producer Price Index (PPI) fell to 2.6% YoY in August, from 3.1% in July, while core PPI slipped to 2.8% YoY from 3.4%. Combined with rising jobless claims, the data reinforced the view that demand is softening and that monetary policy will have to ease.
Bitcoin briefly touched $114,331 midweek, while the S&P 500 and Nasdaq logged fresh all-time highs, highlighting how rate-cut bets are feeding a broader risk-on environment. Traders are now almost entirely pricing in three rate cuts by year-end, with CME FedWatch assigning a 92.7% chance of a 25-bps cut and 7.3% chance of a 50-bps move next week.
BTC Technical Picture: Eyes on $120,000
Technically, Bitcoin is building momentum after bouncing from July’s weekly low of $107,429. The RSI on the weekly chart is at 59, suggesting bullish strength; however, the MACD remains in a bearish crossover from early September, hinting at the risk of waning momentum. A close above $116,000 could open the door toward the $120,000 psychological level. Conversely, failure here may trigger a correction back toward the 50-day EMA at $113,112.
Ethereum (ETH) Analysis: Supply Squeeze Strengthens Case for $5,000 Rally
Ethereum traded at $4,658 on Friday, up 4.14%, as bullish signals accumulated across both fundamentals and technical indicators. The network’s NVT ratio has dropped to a historic low, indicating that network activity—roughly 1 million daily transactions—far exceeds its market capitalization, suggesting undervaluation. Historically, such lows have preceded sharp rallies, as seen during 2021’s 10x run.
Open interest surged to $32.27 billion, with Binance perpetual futures OI hitting $12 billion, underscoring trader confidence. Meanwhile, inflows into ETH spot ETFs reached $8 billion in 2025, further boosting demand. Supply dynamics strengthen the bullish case, with exchange reserves falling to 18.8 million ETH, their lowest level since 2016, while staking has climbed to over 36 million ETH, representing nearly 30% of the total supply.
Technical Outlook:
From a technical perspective, ETH trades within an ascending channel, making higher lows while testing resistance. The RSI has cooled to 60 from 69, giving room for further upside without being overextended. If momentum holds, bulls are eyeing the $5,000 milestone as the next primary target.
Closing Outlook
The past week highlighted a critical turning point across global markets. Weak US labor data and soft consumer sentiment not only weighed on the dollar but also fueled expectations that the Federal Reserve will begin cutting rates as early as next week. This shift set the stage for safe-haven demand in gold, which continues to hover near record highs, while simultaneously driving risk appetite in equities and cryptocurrencies.
Bitcoin’s recovery above $ 115,000 and Ethereum’s consolidation above $4,600 underscore how investors are positioning themselves for a dovish Fed. Gold, meanwhile, continues to benefit from both monetary and geopolitical tailwinds. With the Fed’s September 17 meeting on the horizon, traders should brace for heightened volatility. The outcome will likely dictate whether gold sets new records, Bitcoin advances toward $120,000, and Ethereum makes a push toward $5,000. Markets have made their bets—now all eyes turn to the Fed to confirm or challenge them.
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