Looking to the Futures
Gold retraces post Jackson Hole
Last week we saw Federal Reserve Chairman Kevin Warsh deliver his most hawkish speech since taking over for Jerome Powell. Warsh’s stance at the Jackson Hole Economic Symposium surprised the street which ultimately boosted market expectations for a rate hike in upcoming meetings. There was a focus on near-term inflation data and its sensitivity.
As Warsh seeks to achieve the 2 percent target range for this persistently high inflation, it will likely continue to reduce longer-duration assets in favor of shorter-duration assets. This move will put the Fed at odds with the U.S. Treasury, who recently announced through Scott Bessent that they are stepping up their buybacks of long-term treasury securities to prevent yields from rising further.
If the Fed and Warsh are able to achieve their 2 percent target inflation rate through decisive monetary policy action, then the dollar will strengthen.
Gold is a commodity that historically has had a strong inverse correlation to the dollar. Some investors consider gold to be a safe-haven asset if there are expectations surrounding elevated inflation. If Fed Chair Warsh is successful in strengthening the dollar, then the need for a currency hedge will be limited which will put negative price pressure on gold values.
Another factor to take into consideration regarding the relationship between gold and the dollar would be interest rates. Gold is considered a tangible asset that generates no additional value as a result of an investment in it. The dollar on the other hand can be invested to return a real interest rate (nominal rate adjusted for inflation). If the dollar strengthens as interest rates rise, then investors will be tempted to leave the tangible asset in gold that does not provide a yield for one that does in the dollar.
Other factors impacting the relationship between gold and the dollar would be increases or decreases through treasury holdings. While the U.S. has remained steady year to date at 8,133.46 tonnes (approximately 261.5 million troy ounces), we’ve seen other countries increase their total reserves. Poland has the largest increase at 31.43 tonnes followed by Uzbekistan at 25.19 tonnes. For reference, estimated total global above-ground gold is around 226,600 tonnes as of mid-2026. There is an estimated 61,000 tonnes of economically extractable reserves according to the World Gold Council.
Per the CFTC Commitment of Trader’s Report, open interest increased by 21,697 contracts week over week. We saw the majority of the increase come from swap dealers increasing short positioning by 14,322 contracts primarily against longs in the other reportables category. Swap dealers also doubled down by decreasing long positioning by 2048 contracts.
What else to watch today
Major economic reports, trading events, and news items that could potentially impact specific futures markets:
8:15 AM ET- ADP National Employment Report
10:00 AM ET- Factory Orders
2:00 PM ET- Federal Reserve Beige Book
Today’s trading events
Futures first notice day: September Orange Juice
Futures last trading day: August Milk
Treasury auctions
17-week T-bills
New Products
New futures products are available to trade with a futures-approved account on all thinkorswim platforms:
- Ripple (/XRP)
- Micro Ripple (/MXP)
- 100 OZ Silver (/SIC)
- 1 OZ Gold (/1OZ)
- Solana (/SOL)
- Micro Solana (/MSL)
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