Gold started the week steady, with slight gains as the US Dollar stabilized, thanks to Nonfarm Payrolls data released last Friday. Currently, gold trades around $3,375, bouncing back from a low of $3,345. Market mood has shifted due to changing expectations about Federal Reserve rate cuts. July’s job report increased the likelihood of a Federal Reserve rate cut in September, following earlier speculation about stable interest rates. However, gold’s potential for growth remains limited, as steady US Treasury yields have restricted any bullish movement for this non-yielding asset. Concerns about political influence, particularly involving President Trump and the recent dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer, have also made investors cautious. Trump’s remarks on the reliability of economic data and his upcoming appointments to the Fed and BLS are important for market observers. The US Factory Orders report indicated a 4.8% decline month-on-month in June. Reactions to economic data and guidance from the Fed continue to shape the market. The US Dollar Index is stable, and US Treasury yields have seen a modest recovery after the NFP report. The Nonfarm Payrolls data showed only 73,000 new jobs, falling short of the expected 110,000. The unemployment rate rose to 4.2%, along with revised lower figures for previous months. Gold’s price lingers near $3,370, struggling to gain momentum after an initial rise. Indicators like the Relative Strength Index and Moving Average Convergence Divergence show there’s no clear direction for gold. Central banks have been increasing their gold reserves, adding 1,136 tonnes in 2022. Emerging economies are boosting their holdings, emphasizing gold’s importance during economic instability. Gold prices are swayed by geopolitical risks, shifting interest rates, and US Dollar trends. As gold typically moves opposite to risk assets and the US Dollar, it remains a safe option during market turmoil and economic uncertainty. Currently, gold trades around $3,375, caught between opposing pressures. Last month’s weak job report, indicating just 73,000 new jobs, makes a Federal Reserve rate cut in September more likely. This could be positive for gold, but steady US Treasury yields are preventing significant price increases for now. The Fed’s direction appears to lean towards easing, especially after last week’s Consumer Price Index data showed core inflation dropping to 3.1%, the lowest since late 2023. This slowing inflation, combined with a rise in unemployment to 4.2%, strengthens the case for a rate cut. Traders should position themselves for lower interest rates, which usually benefits non-yielding assets like gold. Political uncertainty adds another level of complexity to watch closely. Trump’s recent comments on economic data and future appointments to the Fed and BLS are causing market unease. This caution is evident in the derivatives market, where the CBOE Gold Volatility Index (GVZ) has risen to 19.5, indicating traders expect bigger price swings soon. The overall economic outlook remains cautious, as US Factory Orders in June showed a significant 4.8% decline. This slowdown hints at weaknesses in the economy, which typically boosts gold’s allure as a safe-haven asset. For derivatives traders, this could make long positions in gold profitable if economic data continues to falter. In the broader context, a strong support level for gold prices exists due to long-term institutional buying. Central banks added an impressive 1,136 tonnes of gold in 2022, and this trend continues. The World Gold Council’s report for the second quarter of 2025 confirmed an additional 270 tonnes purchased, mainly by emerging economies. With technical indicators like the RSI showing uncertainty, we believe making aggressive directional bets right now is risky. Instead, strategies that benefit from a defined range or a potential increase in volatility seem wiser. Selling out-of-the-money puts could be a viable strategy, capitalizing on strong central bank demand to limit significant sell-offs.

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