Weekly Outlook (March 10-14, 2025)

Last week, on the U.S. front, critical PMI figures, which feed into growth data, were announced. In particular, the U.S. Services Purchasing Managers Index (PMI) came in at 51.00, above expectations, confirming that there will be no significant issues with growth data in the upcoming period.

On the other hand, critical employment data were in the spotlight for the markets. U.S. non-farm payrolls for February came in at 151K, below expectations, while the unemployment rate came in higher than expected at 4.1%. With the possibility of issues in employment, expectations for a rate cut from the Federal Reserve gained strength, and the Dollar Index pulled back from the 107.35 level to around 103.60. As critical interest rate hikes are also expected in the Japanese economy, the pullback in the Dollar Index seems likely to continue.

This week, in the U.S., the focus will remain on the economic data releases. On Tuesday, Job Openings and Labor Turnover Survey (JOLTS) data will be released, followed by critical headline and core inflation numbers on Wednesday. On Thursday, Unemployment Claims and Producer Price Index (PPI) data will be the main focus. Expectations for inflation are pointing to a slight decrease in headline inflation, with a forecast of 2.9%.

If the inflation data comes in as expected, it could support the Fed‘s rate cut path, and the Dollar Index may continue to pull back. In this case, if the decrease in inflation is confirmed, we may see increased demand for precious metals once again.

In Turkey, inflation numbers came in below expectations, with the rate at 39.05%, leading to a 250 basis point rate cut by the Central Bank of the Republic of Turkey (CBRT). Following the rate cut, USD/TRY continued trading around 36.59 in the Grand Bazaar.

Technically, the $2850 level on gold futures corresponds to the 233-day exponential moving average. If prices hold above this level, we can expect continued upward movement in gold. Particularly, the Fibonacci levels of $2950/$3120 remain medium-term targets.

In addition to the movement in gold, gold prices in Turkey have also reached historic levels. Following the rate cuts by the CBRT, which have also caused a slight upward movement in the exchange ratepolicy, gram gold prices have hit a new record at 3550 TRY in the Grand Bazaar, with prices continuing to trade around 3460 TRY this week. In Turkey, premiums on gold have risen by as much as $40 per ounce, while the premium on kilograms is around $1300 higher than the London market.

According to CME FedWatch, the likelihood of a 0.25 basis point rate cut in July is priced at around 45%.

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