Key Takeaways
- Russian Foreign Minister Sergey Lavrov and Serbian President Aleksandar Vucic held a phone call on August 26, 2025, discussing bilateral relations and the critical situations in Kosovo and Republika Srpska, emphasizing UN Resolution 1244 and the Dayton Agreements.
- Gold prices remained largely stable this week, trading around $3,370 per ounce, despite a previous bounce following Federal Reserve Chair Jerome Powell's dovish remarks.
- Powell's comments on Friday, August 22, at the Jackson Hole Symposium, hinted at a potential interest rate cut at the Fed's September meeting, driven by concerns over weakening labor market conditions.
- Markets reacted positively to Powell's signals, with traders now pricing in an 84-90% chance of a 25-basis-point rate cut in September, according to the CME Group's FedWatch tool.
- Inflation expectations persist, with tariffs contributing to price pressures, yet the focus has shifted to employment data, potentially keeping gold in a range-bound trading pattern.
In a significant diplomatic development, Russian Foreign Minister Sergey Lavrov engaged in a telephone conversation with Serbian President Aleksandar Vucic on Tuesday, August 26, 2025. The call, initiated by the Serbian side, focused on strengthening bilateral relations and addressing pressing regional issues.
According to the Russian Foreign Ministry (mid.ru), discussions included the volatile situations in Kosovo and Republika Srpska (Bosnia and Herzegovina). Both officials underscored the fundamental importance of UN Security Council Resolution 1244 for the Kosovo settlement and the necessity for all Bosnian parties to strictly adhere to the Dayton Agreements. Moscow reiterated its solidarity with Belgrade in safeguarding the essential rights of the Serbian people, while expressing concern over Pristina's continued obstruction of agreements to establish the Community of Serb Municipalities in Kosovo. The leaders also affirmed mutual interest in continuing a productive political dialogue and bilateral cooperation, including within the oil industry, despite Western attempts to impose restrictive measures.
Meanwhile, in financial markets, gold prices have shown relative stability this week, largely trading flat despite a notable bounce on Friday. Spot gold had surged $35.70, or 1.06%, to $3,417.30 per ounce on Friday, following remarks from Federal Reserve Chair Jerome Powell. However, by Monday, prices eased slightly, with spot gold down 0.1% to $3,370.14 an ounce, and US Gold futures for December delivery also declining 0.1% to $3,414.90.
Powell's highly anticipated speech at the Jackson Hole Economic Symposium on Friday, August 22, signaled a potential shift in the Federal Reserve's monetary policy stance. He hinted at a possible interest rate cut at the central bank's upcoming September meeting, citing a weakening labor market. Powell noted that "the balance of risks appears to be shifting" and that changing economic conditions "may warrant adjusting our policy stance."
This dovish pivot by Powell led to a significant market reaction, with Wall Street rallying on Friday, pushing the Dow Jones Industrial Average to an all-time high, surging 846 points, or 1.89%. Traders swiftly increased their expectations for a rate cut, with the CME Group's FedWatch tool indicating an 84-90% probability of a 25-basis-point reduction in September. The U.S. dollar also experienced a broad decline following his comments.
Despite persistent inflation expectations, partly fueled by tariffs, which Powell acknowledged remain above the Fed's 2% long-term target, the central bank's focus appears to be increasingly on the labor market. Analysts suggest that this dual concern, balancing inflation with employment risks, could keep gold prices in a range-bound pattern for the foreseeable future, as markets await further clarity from upcoming U.S. PCE statistics and nonfarm payrolls data.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.