Dollar Rally Pressures Gold as Traders Eye Friday’s Jackson Hole Speech

Initial unemployment claims in the United States rose to 235,000 for the week ending August 16, an increase of 11,000 from the previous week and the largest jump since late May. This figure exceeded economists’ forecasts of 225,000 claims, signaling that layoffs may be accelerating in a weakening labor market. The employment situation has been characterized by low firing rates but equally tepid hiring, as businesses grapple with President Trump’s protectionist trade policies that have pushed import duties to their highest levels in a century. Employment growth has slowed dramatically, averaging just 35,000 jobs per month over the past three

Gold prices slipped slightly to around $3,340 per ounce as investors await Federal Reserve Chair Jerome Powell’s speech at Jackson Hole on Friday. The precious metal had gained on Wednesday after President Trump called for Fed Governor Lisa Cook to resign. Markets expect the Fed to cut interest rates by at least 25 basis points next month, which would support gold prices since gold doesn’t pay interest. Gold has risen over 25% this year, reaching record highs, driven by central bank purchases and ETF investments.

Gold reached a historic high of $3,500 per ounce in April 2025, marking a 25% gain in the first half of the year, and currently hovers near this peak. The surge is driven by multiple factors: central banks are aggressively buying gold with 43% planning to increase reserves, the US dollar has fallen 8% despite high Treasury yields, and the Federal Reserve is expected to cut rates soon. Wealthy investors have doubled their gold allocations to 11% from 5%, while gold ETFs attracted $21.1 billion in Q1 2025. Analysts project gold could stabilize between $3,300-$3,500, with some forecasting prices reaching

China views the US GENIUS Act and the rise of dollar-backed stablecoins as a serious threat to its financial sovereignty. The new law allows regulated US banks to issue stablecoins that could attract up to $1.75 trillion in circulation over three years, creating digital dollars that can move globally beyond China’s capital controls. Beijing fears these blockchain-based tokens could undermine its financial repression system and the yuan’s role in international trade. In response, China is experimenting with its own controlled blockchain solutions, including potential renminbi-backed stablecoins in Hong Kong that would be fully traceable and programmable, reflecting Beijing’s vision of