Solid Goold Trading

Monday’s Edition

With Nick Goold

Markets started last week quietly as the U.S. Labor Day holiday marked the end of summer trading. The main focus was U.S. jobs data, which came in much weaker than expected. Only 22,000 jobs were added in August compared with forecasts for 76,500, and the unemployment rate rose to 4.3%, the highest in four years. The weak numbers increased worries about the economy and raised expectations that the Federal Reserve will cut rates later this month. The U.S. dollar, which had been stronger earlier in the week, gave back its gains.

Other data gave a mixed picture. U.S. PMI readings were weaker than expected, showing slower business activity, while U.K. retail sales were stronger than forecasts, pointing to solid consumer spending.

U.S. equities finished the week close to unchanged. Early gains were held back by profit-taking and growing concerns about the weakening economy. Gold, on the other hand, kept climbing to new record highs, helped by safe-haven demand and expectations of lower interest rates.

Markets This Week

U.S. Stocks

The Dow slipped last week as profit-taking set in on worries about the U.S. economic outlook, with investors now expecting a 0.25% rate cut from the Federal Reserve later this month following weak employment data. The quiet conditions were unsurprising as the U.S. summer came to an end, but sideways-to-lower price action still looks most likely. This week’s key U.S. inflation data could bring volatility, while technical indicators such as the 10-day moving average are starting to trend lower, pointing to further profit-taking unless unexpected news provides support. Resistance levels remain at 45,750, 46,000, and 47,000, with support seen at 45,000, 44,000, and 43,000.

Japanese Stocks

The Nikkei resumed its uptrend after U.S. President Donald Trump signed an executive order cutting Japanese auto import tariffs to 15% from 27.5%. The move boosted sentiment, with foreign investors continuing to buy Japanese equities. The index is expected to stay well supported on the tariff news, though with U.S. equities facing resistance, range trading looks like the best approach this week. Resistance is at 43,000円, 44,000円, and 45,000円, while support is at 42,000円, 41,500円, and 41,000円.

USD/JPY

The USD/JPY continued to trade sideways last week, climbing early toward resistance after confirmation of lower U.S. auto import tariffs boosted sentiment. However, much weaker-than-expected U.S. employment data raised the likelihood of further Fed rate cuts, sending the pair back toward its starting levels. Range trading between 146 and 149 remains the best approach until a clear breakout occurs, with upcoming U.S. inflation data likely to provide short-term trading opportunities. Resistance levels are set at 148, 149, and 150, while support lies at 146 and 145.

Gold

Gold had another strong week, surging to record highs as both speculators and investors increased safe-haven buying. Expectations of lower U.S. interest rates following weak employment data further boosted demand. The market remains strong but overbought, so the best approach is to wait for buying opportunities on weakness near the 10-day moving average. In the short term, aggressive traders may also find selling opportunities if momentum eases. Resistance levels are at $3,600, $3,700, and $3,800, while support at $3,500, $3,450, and $3,400.

Crude Oil

WTI came under pressure last week, dropping to three-month lows on expectations that OPEC+ may raise output targets. Additional selling appeared at the end of the week after weak U.S. employment data raised fears of reduced demand from a slowing economy. WTI remains range-bound but looks more likely to test support at $60 in the short term, making selling opportunities the preferred strategy this week. Resistance levels are set at $65, $70, and $75, while support lies at $60 and $55.

Bitcoin

Bitcoin stabilized last week as speculators returned as buyers, though previous support at $112,000 was tested and held as resistance. ETF demand remains weaker than in earlier months, leaving prices likely to stay under pressure and trade sideways to lower in the near term. Resistance levels are set at $112,000, $120,000, $125,000, and $150,000, while support lies at $105,000 and $100,000.

This Week’s Focus

Monday: Japan GDP, China Trade Balance
Tuesday: Australia NAB Business Confidence
Wednesday: China CPI and PPI, U.S. PPI
Thursday: E.U. ECB Interest Rate Decision, U.S. Initial Jobless Claims, U.S. CPI
Friday: Japan Industrial Production, U.K. GDP, U.K. Industrial Production, E.U. German CPI, U.S. Michigan Consumer Sentiment

This week is expected to start quietly, with the U.S. dollar and equities holding in small ranges as traders wait for new drivers. The main focus will be U.S. inflation data, where any surprises could bring short-term trading opportunities. Gold also stays in the spotlight, with investors watching to see if record highs can continue or if profit-taking pushes prices lower. In Japan, GDP data will be closely followed to see if growth is strong enough to support a Bank of Japan rate hike.