Slowing Down in Q3: A Strategic Pause Before the Next Boom

As the first half of 2025 draws to a close, macroeconomic indicators suggest that the economy is transitioning from a growth phase into a pre-boom adjustment period. Over the past two years (2023–2024), we experienced a “Goldilocks” phase—steady growth with balanced economic data. Looking ahead, the third quarter marks the end of this growth cycle. Investors are advised to reduce the pace of trading and investing, allowing markets to consolidate in preparation for a potentially prosperous new cycle aligned with the decades economic expansion.

(Chart 1: The Four Phases of the Economic Cycle | Source: XQ Global Investors)

The typical economic cycle includes four phases: Recovery, Growth, Boom, and Recession—each with a transitional correction. In this current decade-long cycle, recovery began in 2020–2021, followed by a correction in 2022. The subsequent growth period spanned 2023–2024. A market adjustment is expected in the second half of 2025, setting the stage for a boom beginning in 2026.

One of the key indicators marking the end of a growth phase is consumer behavior. U.S. personal savings data from May reveals an upward trend. Real disposable income stands at 1.69%, while real consumer spending is at 2.15%. The current dynamic—low savings rate, high spending, and declining disposable income—reflects a consumption pattern driven by financial overextension.

(Chart 2: Real Disposable Income vs. Real Consumer Spending vs. Personal Savings Rate | Source: MacroMicro)

If we reference the last cycle transition to the boom phase in 2015, we observed a noticeable slowdown in consumption as consumers prioritized saving. This upcoming phase is expected to see similar behavior, especially in goods consumption. While U.S. service spending remains strong enough to support overall economic performance, the weakening demand for goods poses risks for risk assets.

During the 2022 transition from recovery to growth, risk assets dropped nearly 30%—largely driven by geopolitical tensions and tightening monetary policy. This time, we anticipate a milder correction of around 10–20%, as central banks lean toward policy easing. The primary challenge lies in weakened end-user consumption, which may cap upside momentum in risk assets but is unlikely to trigger a steep crash. Instead, markets may trend sideways with higher volatility.

With the return of tariff uncertainty under former President Trump and fading market optimism, trading conditions for commodities have grown more complex. Nevertheless, once the third quarter concludes, a favorable trend resembling 2023–2024 may re-emerge, offering a critical window for investors to seize market opportunities.

Q3 Consolidation Is the Preparation for What Lies Beyond

Gold Price Technical Analysis

On the hourly chart, gold remains in a descending consolidation pattern with lower highs and lower lows. This trend suggests uncertainty and calls for caution. Investors are advised to stay on the sidelines and avoid overtrading. Should the choppy trend persist, consider shorting near the upper boundary of the channel around $3,331, with a stop-loss if the price breaks above.

Recommended Stop-Loss: $15

Support Level: $3,295

Resistance Level: $3,331

Risk Disclaimer: The views, analysis, research, and prices provided herein are for general market commentary only and do not constitute investment advice. Readers assume full responsibility for their investment decisions. Please proceed with caution.