Gold prices are $2,525 an ounce, increasing from $2,500 an ounce last Monday.

Last week, the  the Bureau of Labor Statistics made a significant announcement that 818,000 reported jobs created over the previous year were, in fact, not created. This correction, accounting for 30% of all nonfarm payroll jobs reported (April 2023 to March 2024), marks the most substantial error in U.S. job reporting since 2009.

The impact of this correction is profound. Stocks, bonds, commodities, and other markets worldwide rely on accurate U.S. job data to assess the economy's health and make informed investment decisions. The Federal Reserve, in particular, uses data points like employment to shape its monetary policy.

Last Friday, Jerome Powell gave one of his most dovish speeches in the past few years, indicating that "the time has come for policy to adjust" regarding interest rate decreases. It was a significant announcement as the Federal Reserve started increasing interest rates to cool the rising prices, hiking its benchmark rate 11 times between March 2022 and July 2023.

Powell's speech at the Fed's annual Jackson Hole meeting last week also eluded to the deteriorating labor market as the critical reason for adjusting policy. The inflation rate is trending in the correct direction, albeit not down to the 2 percent original stated target for policy.

Jerome added, "We do not seek or welcome further cooling in labor market conditions," and stated that the "downside risks to employment have increased."

Gold achieved countless record-high prices during an environment of high interest rates. As we move into a lower interest rate environment, gold prices traditionally increase as Treasury bonds, which compete as a lower-risk investment, have lower rates with less favorable returns.

Potential market-moving events for the week include:

• Monday, August 26: Durable Goods Orders
• Tuesday, August 27th: Consumer Confidence
• Thursday, August 28th: Initial Jobless Claims & GDP (2nd Revision)
• Friday, August 30th: Core PCE Index (inflation)

The Federal Reserve will closely review the inflation data this week, with Friday's July U.S. Personal Consumption Expenditures (PCE) Index being their primary marker. Markets will also receive July's U.S. Durable Goods Orders on Monday and August Consumer Confidence on Tuesday. Initial jobless claims and U.S. Preliminary Q2 GDP will be out on Thursday.

The next Federal Open Market Committee (FOMC) meeting to decide the interest rate will be September 18. Based on Jerome Powell's speech last week, this would be the most likely time for the Federal Reserve to cut the interest rate.