Global In‑Depth Market Report on Forex, Gold and Crude Oil

Release time：2026-08-17 Publisher：GINZO

I. Overview of the Forex Market: US Dollar Pressured by US Economic Data, Divergence Widens Among Non‑US Currencies

In early August, the core conflict in the global forex market centered on the tug‑of‑war between deteriorating US economic indicators and internal divisions within the Federal Reserve. The US Dollar Index fell from around the 100 level, touching a low of 99.36. It has recently traded within the 99.5‑99.8 range, ending its multi‑month strong trend.

The major driver behind dollar weakness was a string of cooling key US economic data. July year‑on‑year CPI stood at 3.4%, edging down from the prior reading, while core CPI came in at 2.5%, signalling easing inflationary pressure. The subsequent July retail sales print posted a month‑on‑month decline of ‑0.6%, far worse than the market consensus of +0.1%. This marked the first negative reading in nine months, pointing to a clear slowdown in household consumption momentum across the United States.

Following the data releases, market pricing on the CME FedWatch Tool shifted materially. The probability of a 25‑bp rate hike in September plunged from 55% to 33%, whereas odds for keeping rates unchanged rose above 67%. The 10‑year US Treasury yield also retreated to around 4.6%, directly weighing on dollar buying interest.

Nevertheless, opinions inside the Fed remain divided. Minutes from the July FOMC meeting showed three Federal Reserve Bank presidents still favoured an immediate 25‑bp rate increase. Hawkish officials have repeatedly stated in public remarks that rising crude‑oil prices could reignite inflation, and the option of rate hikes should not be abandoned prematurely. This has capped sharp dollar declines and contributed to heightened volatility across forex markets.

Performance among major non‑US currencies has diverged notably. EUR/USD has held above 1.15 and repeatedly tested the key resistance at 1.16. In Europe, energy‑related risks and manufacturing weakness remain medium‑to‑term headwinds; short‑term strength is largely passive, driven by a weaker dollar.

USD/JPY hovers near 159, with markets closely watching the psychological threshold of 160. Bank of Japan officials have delivered hawkish rhetoric, and investors await Japan’s GDP figures. Should yen depreciation accelerate, official intervention may re‑emerge. The sustainability of any intervention effect represents the biggest source of uncertainty for the yen.

Sterling advanced alongside risk sentiment. As commodity currencies, AUD and CAD benefit from recovering raw‑material prices yet are held back by fears of a global economic slowdown, resulting in choppy price action. Offshore renminbi fluctuates amid dollar softness, subject to domestic fundamentals and cross‑border capital flows, exhibiting distinct two‑way volatility.

II. Gold Market: Rally Driven by Dollar Weakness and Geopolitical Risk‑Aversion Followed by Profit‑Taking

Spot gold staged a powerful rally in August. Rebounding from an early‑August low of $4041 per ounce, it hit a two‑month high of $4450 per ounce. After a maximum monthly gain of roughly 9%, heavy profit‑taking from short‑term long positions triggered V‑shaped swings. Gold found support near $4310 and is now trading between $4370‑$4390 per ounce.

The rally was fuelled by multiple converging factors. First, receding Fed hike expectations and falling real US Treasury yields. Gold is a non‑yielding asset. When rate‑hike odds diminish and room for real‑yield increases shrinks, gold’s allocation appeal rises. Markedly soft US inflation, employment and consumption data prompted markets to reprice the Fed’s policy path, serving as the core macro driver for this upturn. Risks persist, however: a sharp crude‑oil rebound that rekindles inflation could prompt Fed officials to revert to hawkish stances and send gold sharply lower.

Second, ongoing geopolitical tensions in the Middle East have sustained a risk‑aversion premium. Shipping risks in the Strait of Hormuz persist. US‑Iran negotiations have experienced repeated twists, and the threat of renewed conflict lingers. Heightened global geopolitical uncertainty has driven capital inflows into gold as a hedging instrument.

Third, persistent central‑bank gold purchases have underpinned prices. According to IMF statistics, global central‑bank gold acquisitions remained elevated in 2026. The People’s Bank of China has increased its gold reserves for 21 consecutive months, adding another 640 000 ounces in July. Even amid steep price gains, strategic reserve accumulation by central banks has not slowed, providing medium‑term support and constituting one of the fundamental drivers behind gold’s multi‑year bull run.

From a positioning perspective, CFTC speculative data show rising net‑long speculative gold positions, reflecting bullish sentiment among Wall‑Street institutions. Over 90% of professional traders surveyed by Kitco expect higher gold prices in the short run. Meanwhile, bull‑bear divergence has widened to multi‑year extremes. Institutional forecasts span a wide range from $3450 to $7150 per ounce, implying greater ahead volatility and the risk of large‑scale profit‑taking corrections following rallies. On the technical front, $4450 acts as strong near‑term resistance, while key support levels lie at $4300 and $4220. Market participants will closely monitor Fed meeting minutes, US CPI, non‑farm payrolls and developments in the Middle East.

III. Crude‑Oil Market: Geopolitical Supply Disruptions Dominate; Production Increases Cannot Offset Shipping Risks

International crude oil saw extreme volatility in August. Brent crude posted a weekly gain exceeding 6%, and WTI crude also advanced substantially. Brent briefly neared the $90 mark while WTI stabilised around $83. The geopolitical risk premium became the primary driver for oil prices.

The most critical variable remains developments in the Strait of Hormuz in the Middle East. The strait handles a large share of global seaborne crude exports. Confrontation between the United States and Iran has reduced strait throughput, creating tangible physical supply shortfalls rather than mere risk sentiment. Indirect talks mediated by Oman occasionally yield conciliatory signals. Nevertheless, Iran’s tough demands, including sanction relief, troop withdrawals and conflict‑damage compensation, are unlikely to be fully accepted by the US. Negotiations remain tortuous; tanker attacks occur sporadically, and fears of supply disruption have not been fully dispelled.

Early in August, OPEC+ announced that seven major oil‑producing nations would extend a daily output increase of 188 000 barrels in September, phasing out prior voluntary production cuts to stabilise oil prices. Most analysts argue that paper‑based production quotas will have limited real‑world impact while Strait of Hormuz shipping remains constrained. Without full restoration of export routes, higher output cannot quickly ease supply tightness.

Inventory data show generally low global crude‑oil stocks, with US product inventories drawing down notably. Low‑inventory conditions amplify price swings, meaning even minor supply‑side news can trigger sharp oil‑price spikes. On the other hand, weak global manufacturing demand and fears of a global slowdown cap upside potential. The market is caught in a tug‑of‑war: upward pressure from supply risks balanced by downward pressure from demand concerns.

Institutions highlight two major risk scenarios. First, material progress in US‑Iran talks and restored strait shipping could trigger a rapid unwinding of geopolitically‑driven price gains. Second, further conflict escalation that largely halts maritime shipping would push oil prices even higher. Investors will continue to track US EIA inventory reports, monthly OPEC+ meetings and global macroeconomic indicators.

IV. Key Upcoming Events to Watch

Fed Meeting Minutes: Detailed internal discussions from the July FOMC will be published, offering clues on officials’ attitudes toward rate hikes or cuts, with direct implications for the US dollar and gold.
US Economic Indicators: Initial jobless claims, PCE price index and non‑farm payroll report. Each release will reshape Fed‑policy expectations.
Middle‑East Developments: Progress in US‑Iran negotiations and shipping safety in the Strait of Hormuz, affecting both crude oil and gold.
OPEC+ monthly market assessment report, monitoring compliance with production‑increase commitments among oil‑producing countries.
Bank of Japan policy remarks, watching whether yen‑exchange‑rate movements trigger official intervention.

Overall, forex, gold and crude‑oil markets are now in a high‑volatility environment. Intertwined macro‑policy expectations and geopolitical risks bring rapid trend reversals, and short‑term swing risks have risen markedly.