Gold Drops, USD Surges — My Take on This Week’s Key Trades and the Fed’s Stand

This week, I dive straight into what matters for us traders: a volatile gold market, a hawkish Fed stance, and a strong U.S. dollar that’s shaking things up across the board. Now, let’s talk gold. We saw a dramatic $50 drop in less than 15 hours. That’s not just noise—it’s movement with real opportunity. Gold has already been sliding over the past week, and this sharp sell-off brings it below the $3,300 mark. The question I pose is simple: do we go long at this level or stick with the bearish momentum? Technically, gold is in a broad $200 range, but with a risk-on mood dominating markets, gold demand could keep fading. The real driver here is the Fed. They kept rates unchanged, but that doesn’t mean the market stood still. In fact, the USD rallied hard across every major currency. We’re seeing this across the board—against the euro, pound, yen, CAD, even CHF. This kind of broad strength tells me there’s more at play than just a paused rate. Looking into CME FedWatch data, I notice a sharp shift in rate cut expectations. Just yesterday, markets priced in a 68–70% chance of a September cut. Today? It's nearly 50/50. That’s a massive sentiment change. My view is this: we likely get one 25bps cut in December—nothing more. Inflation remains sticky at 2.3%, unemployment is elevated at 4.1%, and uncertainty is still the dominant theme in the Fed’s language. Higher for longer remains their unspoken mantra. Tariffs are another wildcard. With August kicking off and Trump's trade moves still unclear, inflation risks could intensify. Deals with Iraq, Japan, and a few others are a start, but we need a lot more progress to calm markets. Until then, inflation could spike again—and that reinforces my view that the Fed won’t rush to cut. Looking ahead, I’m watching the NFP print closely. I’m not expecting it to be strong, but I’m also not betting on it triggering a cut. Jobs data will be key in shaping September’s Fed outlook. For gold, I’m staying cautious. I’ll be fading rallies and looking to short on strength—unless the risk sentiment flips. We’re in a range, and until there’s a clean breakout, I’ll trade it accordingly. To wrap it up: the USD is king right now, gold is under pressure, and the Fed isn’t budging. I’m staying tactical, letting the data guide the bias, and focusing on setups with strong momentum and tight risk. This is a trader’s market—let’s make the most of it. Register here for the next webinar: https://acy.com/en/education/webinars/ Join Luca's Telegram Trading Feed: https://t.me/+bkfmaA76P2VlMTQ1 Catch up with the latest news and market analysis here: https://acy.com/en/market-news Get in touch today: Web: https://www.acy.com Twitter: https://twitter.com/ACY_Securities Facebook: https://www.facebook.com/acy.securities/ Spotify: https://open.spotify.com/show/2g4Py8AuAqUIxci9efdMmm?si=ac6ff082c5c84f78 Phone: Australia 1300 729 171 International +61 2 9188 2999 Disclaimer: Foreign exchange and derivatives trading carries significant risk and is not suitable for all investors. You do not own, or have any interest in, the underlying assets. Before you decide to trade foreign exchange and derivatives, we encourage you to consider your investment objectives, your risk tolerance and trading experience. ACY Securities Pty Ltd (AFSL: 403863) provides general advice that does not consider your objectives, financial situation or needs. You should consider if you are part of our Target Market by reviewing our TMD and read our FSG and PDS to ensure you fully understand the risks. The content of this presentation must not be construed as personal advice and the information in this presentation is prepared without considering your objectives, financial situation or needs; please seek advice from an independent financial or tax advisor if you have any questions. ACY Securities Pty Ltd is regulated by the Australian Securities and Investments Commission (ASIC AFSL:403863). Registered address: ACY Tower, Level 18, 799 Pacific Hwy, Chatswood NSW 2067. AFSL authorised us to provide financial services to Australian Residents or Businesses. ACY Capital LLC ('ACY LLC'), ACY LLC is incorporated in St Vincent and the Grenadines (Company number: 2610 LLC 2022). Registered address: Suite 305, Griffith Corporate Centre, Beachmont, Kingstown. ACY Securities SA Pty Ltd (Reg.: 2009/008731/07) is regulated by the Financial Sector Conduct Authority (FSCA: 51008). Registered address: 4 Stan Road, Sandton, Johannesburg, Gauteng, 2196. FSCA authorised us to provide financial services in terms of section 8 of the Financial Advisory and Intermediary Services. © 2020 - 2025 ACY Securities is a brand name of ACY AU and ACY LLC, ACY Securities Pty Ltd. All rights Reserved.