AUGUST — A MONTH OF CONSTANTLY SHIFTING EXPECTATIONSUS Dollar IndexCAPITALCOM:DXYchungngctIf July was relatively quiet, with gold trapped in a range and the DXY approaching 101.5 many traders became heavily focused on SELL positions, expecting gold to fall toward 3,800–3,600. Then August came — and everything changed at breathtaking speed. At the end of July, the U.S. coordinated with Japan to support the Japanese yen → the DXY reversed. Then came the jobs shock: July Nonfarm Payrolls came in at -23,000. The market immediately started thinking: Weak jobs → more room for the Fed to ease → weaker USD → stronger gold. Inflation, meanwhile, remained within expectations, but the decline was becoming slower and more persistent, with PCE still at 3.7%, well above the Fed's 2% target. → The expectation at that point leaned toward the Fed holding or cutting rates. Then the U.S. Treasury increased its long-term Treasury buyback program to at least $4 billion per operation. The $4 billion itself isn't huge. But the bigger question is: Why does the U.S. Treasury need to actively buy back debt that it issued itself? And then came Jackson Hole. The market was expecting a softer message. But Warsh emphasized: 2% is a fixed target. Inflation is still too high. There is not enough evidence to say inflation has truly been brought under control. There was no clear “roadmap” for interest rates. → Expectations turned again. From expecting rates to stay unchanged or fall → the market began pricing in the possibility of a September rate hike. What I find most interesting is this: The Fed is no longer looking only at whether inflation is rising or falling. It is looking deeper into whether inflation is spreading across the economy. And that is what I want to watch closely in September. MY PERSONAL VIEW I am still leaning toward this scenario: The Fed keeps rates unchanged in September. No hike. No cut. This is only my personal view, and I could absolutely be wrong. I believe political pressure ahead of the midterm elections is a variable that should not be completely ignored. Trump nominated Warsh, while previously putting public pressure on Powell to cut rates. I am not drawing any conclusions from this. But my intuition is: The actual policy may not change, but the Fed's communication could become slightly softer to support market expectations. And after the election? We'll see. BUT IN THE END, WE STILL HAVE TO COME BACK TO THE CHART. A gold rally of more than 700 points has: Killed the early BUY crowd. Killed the early SELL crowd. And even killed those who had successfully SELLed around 4,800 before, only to keep aggressively SELLing again. And then… The market pulled in the BUY FOMO crowd. Very shallow pullbacks. Price just kept grinding higher. No retest. How can you resist when you've been waiting for a pullback and the market simply refuses to give you one? 😂 And I think this is one of the most valuable lessons: The market doesn't only take money from people who are wrong. It also takes money from people who were right — but fell asleep in their own victory. In September, I will continue watching: CPI → inflation components → jobs → Treasury → Fed → expectations → price action. And in the next post, we'll take a closer look at: How did the market “hypnotize” traders through each individual candle? Because learning from the times the market beats you up often makes the lessons stick longer, deeper — and makes you a better trader. August was a month of shifting expectations. September — let's see who has to shift again. Nice weekend, bro!