Global markets continue to show volatility as we start the new week. Last week, key economic data from the U.S. raised concerns about growth and employment. On Tuesday, job openings came in lower than expected, signaling weakness in the labor market. On Wednesday, U.S. GDP for the first quarter fell by 0.3%, sparking some recession fears. However, core inflation (Core PCE) slowed to 2.6%, offering relief that inflation isn’t rising too fast.
On Friday, U.S. jobs data showed mixed signals — the unemployment rate held steady at 4.2%, while job creation (Non-Farm Payrolls) exceeded expectations at 177,000. Overall, the data suggested that while inflation is under control, economic growth and job markets may be under pressure — increasing the likelihood of interest rate cuts from the Federal Reserve.
This week, important data releases continue. Inflation in Turkey came in below expectations on Monday, but possible agricultural damage from frost may push inflation higher later this month. If so, interest rate cuts could be delayed. Today’s U.S. PMI data might influence growth expectations and trigger market volatility. On Wednesday, the Fed will announce its interest rate decision. Although no cut is expected this week, political pressure from Trump may increase expectations for future rate cuts — a factor that could support gold prices.
Politics & Geopolitics
Trade tensions between Trump and China remain unresolved. These uncertainties have led the Fed to raise its inflation forecast to 2.7% and cut its growth forecast to 1.7%. As a result, investors are pulling money out of U.S. stock markets and shifting into safe havens like gold.
Gold prices are hitting new highs again this week. The rise in geopolitical tensions is a key driver. Trump recently said he has no plans to meet with the Chinese President, adding to uncertainty. Meanwhile, on May 5, Israel launched airstrikes on Yemen, Lebanon, Syria, and Gaza simultaneously — further raising tensions in the region.
Gold started 2025 at $2,625 per ounce and closed Q1 at $3,125. Now, with support levels holding above $3,250, the uptrend continues. Rate cut expectations, global political risks, and trade uncertainty are all helping to push gold higher.
Local Gold Market
In Turkey, gram gold closed last week at 4,085 TRY and is now trading around 4,180 TRY. The price of gold in Turkey is currently about $50 higher per ounce than global benchmarks, with a $1,600 premium per kilogram over London prices.
According to CME Fed Watch, markets are pricing in a 37% chance of a 100 basis point rate cut by December.
Disclaimer: The information provided here is general in nature and does not constitute investment advice. Investment decisions should be made based on your personal financial situation and risk preferences. Acting solely on the information in this report may not yield suitable results.
