Bitcoin held largely steady near the $111,000 mark on Monday in choppy trading, as crypto markets showed a muted reaction to growing expectations that the US Federal Reserve will cut interest rates next week.

The world’s largest cryptocurrency was last up 0.3% at $111,164.6 as of 02:40 Eastern Time (06:40 GMT).

Bitcoin had shed more than 6% over the past month, erasing gains after reaching record highs above $124,000 in mid-August.

Rate-cut bets fail to spark fresh momentum

These limited moves came despite rising market expectations that the Fed will cut rates by at least 25 basis points at its September 17 meeting, with some analysts pointing to the possibility of a larger 50-bp cut.

Friday’s US jobs report showed a sharp slowdown in hiring and an uptick in unemployment to 4.3% in August, strengthening bets on easing.

Global markets broadly responded with optimism: equities gained momentum, US Treasury yields fell toward five-month lows, and gold extended its rally. Still, political developments in countries such as Japan and France added an element of caution to risk sentiment.

Liquidity backdrop and inflation data in focus

Improved global liquidity conditions, typically supportive of risk assets like cryptocurrencies, are expected under looser monetary policy. Yet investors remain cautious ahead of key US inflation releases — the Consumer Price Index (CPI) and Producer Price Index (PPI) — which could weigh more heavily on the Fed’s decision.

Corporate developments

On the institutional side, Japanese hotel operator Metaplanet Inc (3350.TYO) disclosed on Monday that it had purchased 136 Bitcoin worth roughly $15.2 million at an average price of $111,783 per coin.

The acquisition lifted the company’s total holdings to 20,136 BTC, cementing its position among the largest corporate holders of digital assets.

However, the company’s share price fell as investors expressed skepticism over such aggressive treasury management strategies.

Oil prices rose by more than one dollar on Monday, recovering some of last week’s losses, after OPEC+ announced a more limited production increase than expected, while fears grew over the possibility of further sanctions on Russian crude.

OPEC+ signaled plans for an additional output hike starting in October, though the volume was smaller than some analysts had anticipated. Reuters had reported earlier this month that members were considering another round of production increases.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said: “The market clearly overestimated the OPEC+ increase, and today we are seeing the classic reaction of ‘sell the rumor, buy the fact.’”

Brent crude rose by $1.16, or 1.8%, to $66.66 a barrel by 08:58 GMT, while US West Texas Intermediate (WTI) gained $1.09, or 1.8%, to $62.96.

Both benchmarks had dropped by more than 2% on Friday following a weak US jobs report that cast doubt over demand prospects, with weekly losses exceeding 3%.

OPEC+, which includes the Organization of the Petroleum Exporting Countries alongside Russia and other allies, agreed on Sunday to implement an additional production increase starting in October.

Since April, OPEC+ has been gradually raising output after years of supply cuts designed to stabilize the oil market. The latest decision comes despite risks of oversupply during the northern hemisphere’s winter months.

Output from the eight OPEC+ members will rise by 137,000 barrels per day beginning in October. This increase is far smaller than earlier hikes of about 555,000 bpd in September and August, and 411,000 bpd in July and June.

Analysts noted the impact may be limited since some members are already producing above quota, meaning the higher levels could reflect barrels already in the market.

Toshitaka Tazawa, analyst at Fujitomi Securities, said: “Expectations of tighter supplies from possible new US sanctions on Russia are also lending support to the market.”

US President Donald Trump said on Sunday he was prepared to move to a second phase of sanctions on Russia, marking his clearest signal yet of plans to escalate restrictions on Moscow or buyers of its oil due to the war in Ukraine.

Frederic Lasserre, Head of Global Research and Analysis at Gunvor, said on Monday that fresh sanctions on Russian oil buyers could disrupt crude flows.

Russia launched its largest airstrike since the start of the war on Sunday, igniting the main government building in central Kyiv and killing at least four people, according to Ukrainian officials.

Trump also said European leaders would visit the US on Monday and Tuesday to discuss ways of resolving the conflict.

In a weekend note, Goldman Sachs projected a slightly larger oil surplus in 2026, with rising supplies in the Americas offsetting downward revisions to Russian output and higher global demand. The bank left its 2025 Brent/WTI price forecasts unchanged and expects average prices in 2026 at $56/$52 per barrel.

The dollar index remained under pressure on Monday, holding negatively at 97.7 points, extending its recent weakness near levels not seen in months. This decline is attributed to a combination of market expectations regarding Federal Reserve policy, political pressures, and the potential impact of tariffs.

The Fed and Labor Market Signals

Investors are watching closely for a potential Fed rate cut at the upcoming meeting. As shown in the chart, speculation intensified after the latest nonfarm payrolls (NFP) reports signaled slowing job growth. July data showed a modest gain of 79,000 jobs, while August reinforced the slowdown with just 22,000 jobs added and unemployment rising to 4.3%.

Fed Chair Jerome Powell emphasized the labor market’s importance in policy decisions. This has driven expectations for a rate cut at the September 16–17 meeting, with cumulative cuts projected to total around 151 basis points by the end of 2026. Although the Fed left rates unchanged in July, Powell indicated restrictive policy may still be warranted but left the door open for cuts should labor market weakness persist.

Analysis of the US Labor Market

The chart highlights trends in key indicators—nonfarm payrolls, unemployment rate, and average hourly earnings versus the Fed funds rate. It shows job growth slowing sharply in recent months, while unemployment has inched higher. These signals point to a weakening labor market, potentially pushing the Fed toward monetary easing.

Divisions Within the Fed

Fed officials broadly agree on the likelihood of cuts but remain divided on the path ahead. Christopher Waller supported a September cut, citing labor weakness, while Raphael Bostic, despite favoring a cut this year, stressed inflation remains the key risk. Neel Kashkari acknowledged the growing complexity of policy calibration, while Charles Evans expressed doubts due to tariff effects.

Political Pressures and Tariff Risks

Fed independence faces mounting challenges from political pressure. Public criticism and the appointment of allies to key roles may push the central bank to be more responsive to administration demands, raising the risk of faster-than-expected cuts.

Tariffs add another layer of uncertainty. While politically appealing in the short term, their long-run effect could be higher consumer costs and slower economic growth. A weaker dollar may boost exports, but reshoring manufacturing is a complex, costly process not easily solved through tariffs alone.

Technical Outlook and Future Prospects

From a technical standpoint, the dollar remains in a fragile position. As illustrated in the chart, the DXY index trades below its 55-, 100-, and 200-day simple moving averages, reinforcing the broader bearish bias. A break below 96.37 (the 2025 low) could open the way toward support at 95.13 and 94.62.

On the upside, resistance lies at 100.26, followed by 100.54 and 101.97. Momentum indicators also reflect weak upward potential, with the 14-day RSI at 46.90 and ADX (14) at 10.34, signaling a weak trend.

What’s Next for the Market?

In the coming days, attention will turn to key US inflation data, including the Consumer Price Index (CPI), Producer Price Index (PPI), and weekly jobless claims. These reports will provide more clarity on the Fed’s policy trajectory.

The dollar’s current weakness stems from an interplay of economic and political forces. While consensus points to continued downside, the high volume of open short positions may limit the extent of further declines.

Gold prices rose in the European market on Monday at the start of the week, extending gains for the second consecutive day to break above the key psychological level of $3,600 per ounce for the first time in history, continuing to set fresh records, supported by the current weakness of the US dollar.

A series of weak US labor market data boosted the likelihood that the Federal Reserve will cut interest rates by 25 basis points next week, with rising expectations for a 50 basis-point cut.

Price Overview

• Gold prices today: Gold rose by 1.2% to $3,617.19, its highest level ever, from the opening level of $3,586.48, with a low of $3,579.72.

• At Friday’s settlement, gold gained 1.2% after weaker-than-expected US jobs data.

• Last week, gold rose by 4.05%, its third consecutive weekly gain and the largest since May, supported by accelerating safe-haven buying.

US Dollar

The dollar index fell by 0.2% on Monday, extending losses for the second session in a row, nearing a five-week low at 97.43 points, reflecting continued weakness of the greenback against a basket of major and minor currencies.

This decline followed a series of weak US labor market figures in August, which renewed concerns about the pace of growth in the world’s largest economy during the third quarter of this year.

US Interest Rates

• The US economy added fewer-than-expected jobs in August, with unemployment rising to 4.3% from 4.2% in July, the latest gloomy labor market data.

• Following the data, and according to the CME FedWatch tool: the probability of a 25 basis-point rate cut in September rose from 98% to 100%, while the odds of no change dropped from 2% to 0%. Expectations for a 50 basis-point cut increased from 0% to 10%.

• The probability of a 25 basis-point cut in October also rose from 99% to 100%, with odds of no change falling from 1% to 0%. Expectations for a 50 basis-point cut increased from 0% to 8%.

• To reaffirm these probabilities, investors await key US inflation data for August this week, ahead of the Federal Reserve meeting next week.

Outlook for Gold

Kyle Rodda, market analyst at Capital.com, said: “The main driver is US jobs data and the new possibility of a 50 basis-point Fed rate cut in September. It’s a slim chance, but it’s a major shift from before the jobs data.”

He added: “Basically, all the favorable factors are supporting gold right now. Despite awaiting inflation data this week, we’ll see strong attempts to push past $3,600.”

SPDR Gold Trust

Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged on Friday, with the total remaining at 981.97 metric tons.