{"id":15202,"date":"2025-09-08T08:47:05","date_gmt":"2025-09-08T08:47:05","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&#038;p=15202"},"modified":"2025-09-08T08:47:06","modified_gmt":"2025-09-08T08:47:06","slug":"rate-cuts-and-gold-sep-2025","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/opening-bell\/rate-cuts-and-gold-sep-2025\/","title":{"rendered":"25 or 50 bps? Fed Cut Odds Rise as Institutions Shift to Gold"},"content":{"rendered":"\n<p>The CME Fedwatch tool jumped from a 86% rate cut decision last week, to a 90% expectation. This comes after an <a href=\"https:\/\/alchemymarkets.com\/education\/market-insights\/weekly-outlook\/weak-jobs-data-raises-pressure-ahead-of-key-inflation-print\/\">underwhelming ISM report and NFP report<\/a>, and has even catapulted the 50bps rate cut expectation up by 10%.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>ISM Manufacturing<\/strong>: Contractionary again, signalling weakening industrial activity.<\/li>\n\n\n\n<li><strong>NFP Jobs Report<\/strong>: Major miss, with payrolls stalling and unemployment edging higher.<\/li>\n<\/ul>\n\n\n\n<p>Now the question is, is the Fed too late? With U.S. government bonds maturing this month, rate cuts could be key to saving potentially trillions in refinancing costs.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"681\" src=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-1024x681.jpg\" alt=\"\" class=\"wp-image-15218\" srcset=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-1024x681.jpg 1024w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-300x199.jpg 300w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-768x511.jpg 768w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08.jpg 1536w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Institutional Rotation &amp; Hedge Demand<\/strong><\/h3>\n\n\n\n<p>Institutions are clearly rotating into gold as a defensive hedge. Global gold ETFs just notched their third straight monthly inflow, as per the <a href=\"https:\/\/www.gold.org\/goldhub\/research\/gold-etfs-holdings-and-flows\/2025\/09\">World Gold Council<\/a>, totaling $5.5bn in August.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Rotation Signal: Gold vs. Equities<\/strong><\/h3>\n\n\n\n<p>Price action underscores the rotation: gold is breaking out, while SPX and DJI grind into <a href=\"https:\/\/alchemymarkets.com\/education\/strategies\/rising-wedge-pattern\/\">rising wedges<\/a> and NDX is range-bound. Gold\u2019s impulsive breakout from its own <a href=\"https:\/\/alchemymarkets.com\/education\/strategies\/symmetrical-triangle-pattern\/\">symmetrical triangle<\/a> hints at a shift from growth into safety.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1536\" height=\"1051\" src=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-2.jpg\" alt=\"\" class=\"wp-image-15215\" srcset=\"https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-2.jpg 1536w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-2-300x205.jpg 300w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-2-1024x701.jpg 1024w, https:\/\/alchemymarkets.com\/wp-content\/uploads\/2025\/09\/OB-25.09.08-2-768x526.jpg 768w\" sizes=\"auto, (max-width: 1536px) 100vw, 1536px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Implications &amp; Outlook<\/strong><\/h3>\n\n\n\n<p>If the cut is perceived as too late, it&#8217;s viewed as a \u201chail mary\u201d. This means equities may rally momentarily, but gold likely continues its run. If well-timed, rate cuts may support equities more broadly \u2014 but that isn\u2019t shaping up to be the likely case (in this author\u2019s opinion).<\/p>\n\n\n\n<p>Job numbers have simply plummeted too hard, and the shock revisions don\u2019t help either. Beyond the data:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Gold ETFs keep dominating:<\/strong> Gold-backed funds pulled in over US$5.5 billion in August, extending a three-month inflow streak. GLD alone netted US$2.6 billion last week.<br><\/li>\n\n\n\n<li><strong>Gold outperformance is broadening: <\/strong>Gold funds jumped 20.7% in August, bringing their 2025 gains to nearly 80% \u2014 a performance far outpacing stock or bond equivalents.<br><\/li>\n\n\n\n<li><strong>Macro concerns are growing: <\/strong>Analysts (including Goldman Sachs) warn that threats to Fed independence and sticky inflation could see gold soar past $4,000 \u2014 even to $5,000 in extreme fears.<\/li>\n<\/ul>\n\n\n\n<p>In short: A late Fed cut hands defender\u2019s advantage to gold. Institutions are reallocating defensively, not just against slow growth\u2014but also against policy credibility risks.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>CME FedWatch shows 86% odds of a cut as ISM &#038; NFP disappoint, with 50bps bets climbing. Is the Fed too late as U.S. bond refinancing costs loom?<\/p>\n","protected":false},"author":159,"featured_media":15212,"parent":0,"comment_status":"closed","ping_status":"closed","template":"","market_insights_categories":[17],"class_list":["post-15202","market_insights","type-market_insights","status-publish","has-post-thumbnail","hentry","market_insights_categories-opening-bell"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>25 or 50 bps? Fed Cut Odds Rise as Institutions Shift to Gold - Alchemy Markets<\/title>\n<meta name=\"description\" content=\"CME FedWatch shows 86% odds of a cut as ISM &amp; NFP disappoint, with 50bps bets climbing. 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