Opinion Article
By Finance 360 Editorial Desk, with insights from Mohanad Yakut, Senior Market Analyst at Scope Markets
Markets rarely move in isolation. The simultaneous rally in gold and oil this week signals more than short-term sentiment; it reflects an underlying unease about where monetary and economic policy are heading in the final quarter of 2025.
Gold’s surge to $3,612 per ounce underscores the market’s conviction that U.S. interest rates are headed lower. While the probability of a 50-basis-point cut at the Federal Reserve’s next meeting is only 10%, speculation around deeper cuts has been enough to drive safe-haven demand. As Mohanad Yakut of Scope Markets explains, gold thrives not only on actual policy shifts but also on the expectations that central banks may act aggressively to shore up slowing growth.
Oil’s climb is equally revealing, though for different reasons. The OPEC+ decision to increase output by 137,000 barrels per day from October was seen as conservative, reflecting producers’ caution over weakening demand. This modest increase pushed WTI crude up to $63.50 per barrel, as markets interpreted the move as a balancing act between maintaining revenues and managing global supply.
What ties these moves together is anticipation. Investors are waiting for the U.S. CPI inflation data for August, with headline inflation expected to rise to 2.9%. A higher print could constrain the Fed, forcing it to weigh cutting rates to support a cooling labour market against the risk of letting inflation become sticky. According to Yakut, the likeliest outcome is a modest 25-basis point cut, while leaving the door open for further action depending on incoming data.
The broader lesson is that markets are grappling with contradictions. Gold is climbing on expectations of easier policy, oil is rallying despite concerns over global consumption, and equities remain tethered to the Fed’s next decision. This reflects the fragile confidence of a late-cycle economy where sentiment can shift quickly.
As Q4 approaches, the credibility of central banks will be tested: can they manage inflationary pressures while stabilising growth and investor expectations without tipping the balance too far? For now, gold and oil suggest that markets are hedging their bets on both uncertainty and opportunity.
