Good morning. In 1884, Charles Dow created his very first stock index, made up of just 11 companies, mostly railroads. It later evolved into the Dow Jones Industrial Average we track today.

From trains to tech giants, the index has always been about moving markets forward.

-Shaun A, Jonathan Kibbler, Jordon Mellor

MARKETS

Prices supplied by Google Finance as of 4:00am ET - stock prices as of close. Here is what the prices mean.

TRADER INSIGHTS

Gold is clawing back modest gains in early European trading after sliding to its weakest level in over two weeks. The recovery comes as traders shift their focus to the Fed’s expected rate-cut cycle, with bond yields slipping and the dollar holding mixed.

Still, geopolitical risks and caution ahead of Powell’s Jackson Hole speech mean bulls may need more than short covering to extend this bounce.

Markets are almost certain the Fed will ease in September, but traders are no longer pricing a jumbo 50 bp move. Instead, the CME FedWatch Tool shows odds of at least two 25 bp cuts by year-end. Softer expectations have kept Treasury yields under pressure, giving gold some breathing room.

Last week’s PPI surprise, the fastest monthly gain since 2022, cooled talk of aggressive easing, drawing some demand back to the dollar. Short-term inflation expectations also ticked higher, with Michigan’s survey showing 1-year inflation at 4.9% (up from 4.5%). That mix has kept USD from breaking down, capping gold’s upside.

Trump’s meeting with Ukraine’s Zelenskiy, followed by talks with European leaders, is seen as an attempt to push forward peace negotiations on Europe’s deadliest war in decades. Safe-haven flows have been muted for now, but any disruption could quickly spill into XAU/USD.

The FOMC minutes on Wednesday and Powell’s remarks later in the week are the real catalysts for gold. Until then, positioning will likely stay cautious, with traders reluctant to chase breakouts in either direction.

Gold is still trading inside a tightening triangle, holding just above $3,349 but struggling to build momentum. The first real test for buyers sits at $3,355. A clean break above that could open the way toward the $3,372–3,374 zone and then $3,400–3,410, which marks the recent monthly peak.

On the other side, support remains close by. The first line to watch is $3,346, with heavier pressure likely if price slips toward $3,324–3,323. Losing that floor would bring $3,300 and $3,282 back into play.

Momentum has started to turn positive again, but until gold finishes the day above $3,355 with follow-through, the risk is that it drifts sideways between $3,324 and $3,372 instead of breaking out.

Gold is holding its bounce, but conviction is thin. Rate-cut bets and softer yields are supportive, while a firm dollar and cautious sentiment keep bulls in check. For us traders, the real action may come after the Fed minutes and Powell’s Jackson Hole speech the events that could decide whether XAU/USD reclaims $3,400 or retests $3,300.

-Shaun A

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FOREX

Sterling is on a tear right now. It led the G10 currencies yesterday with a 0.5% gain, and for August so far it’s the best performer of the bunch — up nearly 2.75%. The pound even tagged a fresh one-month high around 1.3590.

The UK economy has been surprising to the upside, flipping sentiment from July. Q2 GDP came in at 0.3% vs. forecasts for just 0.1%. Not huge, but it’s growth at a time when many expected stagnation. June’s GDP print was even better, up 0.4%, vs forecasts of 0.2%.

Government spending helped offset weak consumer demand and falling business investment, while services and industrial output kept things afloat. Basically, the UK ended Q2 on better footing than most thought.

The Bank of England did cut rates, but the vote was close. Almost half of the Monetary Policy Commitee wanted to hold steady. This tells us they’re not in a rush to slash rates aggressively.

Markets are now pricing just a 65% chance of another cut this year, compared to nearly 100% before last week’s meeting.

That shift is a big deal. It tells traders that UK policy might stay tighter for longer compared to peers. Combine that with stronger GDP, and GBP is getting stronger.

GBP/USD has been breaking key levels including the 1.3400 handle which was previous used as support and resistance spanning back to the highs in April.

We can see a clear head and shoulders formation forming if if the price can retrace and trade back to 1.3400. If this occurs it could potentially form the right shoulder of the pattern, which can be a strong reversal point.

For me, if the data out of the UK remains positive combined with the weaker USD we are seeing, then longs from 1.3400 make sense.

I will be monitoring price action if the price makes it back to this supporting zone, and looking for lower time frame confirmations.

Disclaimer: This is just my own trading idea. Please do your own research and come to your own conclusion before taking any trade.

-Jonathan Kibbler

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ANSWER

Answer: U.S. Treasury Bill (T-bill)