The Federal Reserve’s minutes from June show worries about how tariffs might affect inflation over time. The CME FedWatch Tool suggests there’s a 62.9% chance of a 25 basis point rate cut in September.
President Trump announced a 50% tariff on copper imports and Brazilian goods due to political and security issues. He confirmed that the August 1 deadline for these tariffs will remain unchanged.
Gold prices have recently crossed the $3,340 mark, showing strong growth. However, the 23.6% Fibonacci retracement level at $3,372 might hold back further increases. On the other hand, a stronger US Dollar could put pressure on Gold, making the 50-day Simple Moving Average (SMA) of $3,325 an important support level.
In uncertain times, Gold and safe-haven currencies such as the US Dollar, Yen, and Swiss Franc tend to perform well. These assets see increased demand during market fluctuations, offering stability.
Managing Exposure
As tariffs change expectations and inflation risks rise, central banks are feeling more pressure week by week. The Federal Reserve is carefully watching inflation forecasts while trying to balance its two main goals. The latest minutes from the Fed’s June meeting show concern about potential long-term inflation due to new trade barriers increasing supply chain costs. Though there’s a market expectation of a 25 basis point rate cut in September—about 63% likely—traders are cautious.
We’re now seeing how political decisions, especially those related to national security and domestic benefits, are causing quick market reactions. The tariffs on goods from Canada and Brazil have shaken regional confidence and impacted global risk assessments. This situation creates significant pricing pressure in forward contracts and implied volatility for metals and currency pairs, extending beyond August.
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by VT Markets
Jul 12, 2025
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