The Chicago Purchasing Managers’ Index (PMI) in the United States showed a reading of 47.1 for July 2025. This exceeded the expected level of 42, indicating better performance than anticipated. In currency news, the Euro-US Dollar pair reversed its previous decline, with the EUR/USD rising to around 1.1460 even as the US Dollar remained strong.

Gold Hitting a Barrier

Gold is facing a challenge as it attempts to break past the $3,300 mark per troy ounce. This price movement occurs alongside falling US yield rates and slight declines in the US Dollar. Ripple’s (XRP) price fell to $3.09 after failing to surpass $3.32. This drop reflects weak retail demand and changing market feelings following the US Federal Reserve’s recent decision on interest rates. The Federal Open Market Committee (FOMC) is currently discussing the effects of tariffs, weighing potential risks to inflation and the job market. These talks reveal differing views on how tariffs could impact the economy. Although the Chicago PMI reading is better than expected, it remains below 50, indicating contraction. This means the economy isn’t collapsing but isn’t thriving either, leading to uncertainty about future actions from the Federal Reserve. Historically, similar recoveries from low PMI levels often result in stagnant markets instead of sustained growth.

Expect Increased Market Volatility

Given the FOMC’s split opinions on tariffs, we expect more market volatility in the coming weeks. The CBOE Volatility Index (VIX) recently rose by 5% to 19.5, reflecting conditions similar to the volatile markets during the 2018-2019 trade conflicts. Buying VIX call options or options on volatility ETFs could be a wise way to prepare for sudden market changes due to policy shifts. The Euro’s rebound to 1.1460 against a strong dollar is significant. This level has previously acted as a major barrier between 2018 and 2020. If we believe this is a solid breakout, we should think about buying long-dated call options. Alternatively, if we see it as failing at resistance, short-term put options may be appropriate. Gold is facing a notable hurdle at the $3,300 level, which serves as both a psychological and technical barrier. Data from major exchanges shows many call options sold at this price, creating a ceiling for now. We plan to sell call spreads to take advantage of this resistance while monitoring falling US yields, which could trigger a breakout. Ripple’s failure to push past $3.32 is a bearish signal, especially close to its inflation-adjusted peak from 2018. The low retail demand hints at a fundamental shift in sentiment rather than just a temporary dip. For now, we prefer buying put options or taking short positions through futures until buying activity increases. Create your live VT Markets account and start trading now.

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