Gold prices climbed in European trading on Monday, extending gains for the fifth consecutive session and touching their highest level in five months. The metal is now moving closer to breaching the historic $3,500 per ounce threshold, supported by sustained weakness in the US dollar.

Markets are firmly pricing in a Federal Reserve rate cut at the September meeting, with investor attention this week shifting toward key US labor market data for fresh signals on the policy outlook.

Price Overview

Spot gold rose 1.1% to $3,486.15, the strongest level since April 22, after opening at $3,448.27 and hitting a session low of $3,437.17.

On Friday, prices gained 0.9%, marking a fourth straight daily advance, helped by moderate PCE inflation data from the US.

For August, gold rallied 4.8%, its biggest monthly gain since April, driven by heightened Fed easing expectations and concerns over Fed independence amid political pressure from Donald Trump.

US Dollar

The dollar index slipped 0.2% on Monday to a two-week low of 97.66, extending its losing streak to a fifth session as Treasury yields continued to decline. Weakness in the greenback has bolstered demand for dollar-priced bullion.

Commerce Department data on Friday showed the PCE price index rising 0.2% in July, after a 0.3% increase in June, leaving the Fed on course for a widely expected rate cut at its September 16–17 meeting.

Federal Reserve Outlook

San Francisco Fed President Mary Daly reiterated her support for a rate cut in a Friday post on social media, citing labor market risks.

According to CME FedWatch, markets are pricing an 87% chance of a 25 bp cut in September and a 94% chance of another move in October.

Key labor data this week will be decisive, including JOLTS job openings on Wednesday, ADP private payrolls and weekly jobless claims on Thursday, and the August nonfarm payrolls report on Friday.

Analyst Commentary

Matt Simpson, senior analyst at City Index, noted that cautious comments from Fed Chair Jerome Powell helped investors look past the moderate PCE data, keeping the door open for a 25 bp cut this month and fueling optimism for further upside in gold.

The euro rose in European trading on Monday, marking its third consecutive daily advance against the US dollar, supported by sustained pressure on the greenback amid strong expectations of a Federal Reserve rate cut later this month.

Investors are now awaiting Tuesday’s release of key eurozone inflation data for August, which is expected to provide clearer signals on whether the European Central Bank will move ahead with a rate cut in September.

Price Overview

EUR/USD: The euro gained 0.25% to $1.1714, up from the opening level of $1.1685, after touching a session low of $1.1684.

On Friday, the euro closed just 0.1% higher against the dollar, extending its recovery from two-week lows, supported by stronger-than-expected inflation data in Germany, the eurozone’s largest economy.

For August, the euro advanced 2.4% versus the dollar, its seventh monthly gain in the past eight months, driven by diverging expectations between ECB and Fed policy.

US Dollar

The dollar index fell 0.2% on Monday, marking its fifth straight daily loss and hitting a two-week low at 97.66, reflecting continued weakness against a basket of major and minor peers.

Data released Friday showed US core personal consumption expenditures (PCE) rising 0.2% month-on-month in July, in line with expectations. This reinforced market conviction that the Fed will move forward with a widely anticipated rate cut at its September 16–17 meeting. According to CME’s FedWatch Tool, markets are now pricing in an 87% chance of a 25-basis-point cut, up from 63% a month ago.

European Central Bank Outlook

Five sources told Reuters that the ECB is likely to keep rates unchanged in September, though discussions of additional cuts may resume in the autumn if eurozone growth falters.

ECB President Christine Lagarde recently noted in Jackson Hole that the tightening cycle of 2022–2023 did not trigger a recession or sharp unemployment spike as had historically occurred.

Market pricing currently shows less than a 30% probability of a 25-basis-point ECB rate cut in September.

Inflation data from Europe on Tuesday will be pivotal in reshaping market expectations.

The Japanese yen fell in Asian trading on Monday at the start of the week, marking its second straight day of losses against the US dollar, as easing inflationary pressures reduced expectations for an imminent policy shift by the Bank of Japan.

With the likelihood of a rate hike in Japan later this month diminishing, investors are awaiting further signals to clarify the path of monetary policy normalization in the world’s fourth-largest economy.

Price Overview

USD/JPY: The dollar rose 0.25% to ¥147.38, compared to the opening level of ¥147.04, after hitting a session low of ¥146.84.

On Friday, the yen ended 0.1% lower against the dollar, its second loss in the past three sessions, after Tokyo inflation data came in below expectations.

Despite the recent pullback, the yen gained 2.45% in August — its strongest monthly advance since April — supported by rising expectations of at least two Federal Reserve rate cuts before year-end, alongside renewed concerns over Fed stability.

Bank of Japan Outlook

BOJ board member Nakagawa warned of risks from trade policy and said he is looking to the upcoming Tankan survey for guidance on the direction of monetary normalization.

Recent Japanese price data shows reduced inflationary pressures, giving policymakers room to maintain accommodative settings.

Market pricing currently assigns less than a 40% probability of a 25-basis-point BOJ rate hike at the September meeting.

Investors are closely monitoring incoming data on inflation, unemployment, and wages in Japan, as well as further commentary from BOJ officials, for clues on the timing of any future tightening steps.

Ethereum prices declined in Friday’s trading as pressure weighed on most cryptocurrencies, with investors assessing the latest US inflation data and its implications for Federal Reserve interest rate decisions.

Government data released today showed that the US Personal Consumption Expenditures (PCE) index — the Fed’s preferred inflation gauge — rose sharply in July. Headline PCE increased by 0.2% on a monthly basis and 2.6% year-on-year, both in line with expectations. Core inflation also accelerated due to higher prices for some goods linked to import tariffs.

Traders increased their bets on a 25-basis-point Fed rate cut at the September policy meeting, with odds rising to around 89% from 85% before the data release, according to the CME FedWatch tool.

Ethereum exchange-traded funds (ETFs) in the US recorded strong inflows for the week, sharply outperforming Bitcoin ETFs and highlighting a notable shift in investor sentiment. Data from SoSoValue showed Ethereum ETFs attracted $1.83 billion in inflows between August 21–27, compared with just $171 million for Bitcoin ETFs.

Strong inflows for Ethereum ETFs

In the latest session, Ethereum ETFs posted net inflows of $307.2 million, compared with only $81.3 million for Bitcoin ETFs. The performance marks four straight days of positive flows into Ethereum funds, while Bitcoin funds continue to struggle to sustain momentum.

Since the start of August, Ethereum ETFs have attracted about $3.7 billion, while Bitcoin funds saw outflows exceeding $803 million, including withdrawals of $1.17 billion in a single week. Despite Ethereum’s smaller market capitalization compared with Bitcoin, its ETFs have drawn ten times more inflows in just five trading days.

Institutional momentum favors Ethereum

The strong inflows have coincided with a rally in Ethereum’s price, which recently approached its all-time high near $4,950. By contrast, Bitcoin is trading around $113,000 after briefly dipping to $109,000, posting a 5% monthly loss that has dented interest in its investment vehicles.

Institutional adoption has also tilted in Ethereum’s favor, with companies stepping up purchases while Bitcoin demand has slowed. Assets under management for Ethereum ETFs rose 58% over the past 30 days, compared with a 10.7% decline for Bitcoin funds during the same period.

This trend underscores a clear shift in the investment landscape: while Bitcoin ETFs previously dominated inflows, Ethereum funds are now gaining the upper hand, reflecting growing confidence in Ethereum’s growth potential and its appeal as a preferred institutional investment.

As of 21:09 GMT, Ethereum rose 2.7% to $4,329.1 on CoinMarketCap, though it remains down 10.6% for the week.