WEEKLY MARKET RECAP SEP 01-05, 2025
Gold reached a new all-time high of $3,600 on Friday following weaker U.S. labor market data, which reinforced expectations of potential rate cuts. The dollar remained in a consolidation, while other major assets saw limited movement. This week’s economic releases highlighted a mixed global economic picture, with a softening labor market driving market sentiment and keeping gold bullish.
Here’s a breakdown of the key drivers that shaped markets this week.
Table of Contents
- Macro Overview: Global Economic Data
- U.S. Labor Market Weakness
- Manufacturing & Services PMI Reports
- Eurozone Inflation Trends
- Technical Analysis Highlights
- Gold Price Technicals
- Dow Jones (US30)
- Dollar Index (DXY)
- Fundamental Analysis Highlights
- Looking Ahead: Key Market Events Next Week
- Stay Ahead with MRKT
Macro Overview
- U.S. Labor Market:
- ADP employment data came in weaker than expected, particularly in the service sector, reinforcing the rate cut narrative.
- JOLTS job openings fell to 7.181M, with the largest decline in healthcare and social assistance.
- NFP came out at 22K while the unemployment rate rose to 4.3%;
- Manufacturing & Services PMI:
- In the United States, the Manufacturing PMI rose to 53, driven by higher production and new orders and the ISM Services PMI increased to 52, due to stronger business activity and new orders.
- In Europe, the Manufacturing PMI rebounded to 50.7, returning to expansion, while in the service sector it remained steady at 50.5.
- In the UK, the manufacturing PMI dropped further to 47 (still contractionary) marking the 11th consecutive contraction in manufacturing output. However the Service PMI jumped from 51.8 to 54.2, reflecting robust output, new business, and stronger domestic and international demand
- In Japan, the manufacturing PMI edged up to 49.7 while the Service sector rose to 53.1 amid a rise in new orders.
- Inflation:
- Europe's inflation rose slightly to 2.1% due to a rise in unprocessed food, but still remaining within near the ECB target.
Technical Analysis Highlights
- Gold: Broke previous all-time highs, after it approached the $3600 buyers started to close their positions to end the week.
- Dollar Index (DXY): Still in a secondary phase of market structure, failing to break both the range high of 98 and the range low of 97.
- US30: Consolidation observed after failing to break above recent all-time highs. Currently in an intraday consolidation.
Fundamental Analysis Highlights
- Economic data painted a mixed picture: soft labor market data supports dovish Fed expectations, while certain PMI readings indicated modest economic resilience.
- OPEC’s announcement of higher crude production contributed to the continued decline in oil prices.
- Market sentiment is still heavily focused on the Fed rate cut narrative, which is supporting gold and keeping the dollar weak.
- Any strong upside economic surprises may trigger short-term profit-taking in gold before buyers re-enter at better levels.
Looking Ahead
Key data and events for next week:
- U.S.: Inflation report (critical for Fed guidance);
- Europe: ECB rate decision expected to hold steady;
- UK: GDP MoM;
- Japan: GDP QoQ;
- China: Inflation YoY;
- U.S.: Michigan Consumer Sentiment MoM.
The market will closely watch these releases for signals on central bank policy direction, especially the US inflation report which if it’s higher-than-expected it could shift the Fed tone towards neutral or hawkish, while softer readings would support dovish expectations.
Currently market makers are expecting the inflation data to increase to 2.9%, however MRKT is expecting a different outcome, and if it’s right, several assets can see strong increase in volume and volatility.
Stay Ahead with MRKT
Want to stay on top of every market move, track key data, and make informed trading decisions? MRKT gives you the tools, insights, and real-time analysis to navigate volatility like a pro. Don’t just follow the market, understand it, trade it, and profit from it.