In July, the United States ISM Manufacturing New Orders Index increased to 47.1 from 46.4 in June. This shows a moderate improvement in manufacturing. The US Dollar is still facing challenges, as EUR/USD rose above 1.1550 after weak employment and PMI data. Similarly, GBP/USD is also performing well, moving past 1.3250, supported by the same data.

Gold Market Movements

Gold gained value, reaching weekly highs around $3,350. A drop in US Treasury bond yields helped drive this increase, as markets reassess the Federal Reserve’s rate plans. Cryptocurrency markets are struggling after a strong July performance, with Bitcoin falling below $115,000. In contrast, the euro area’s economy shows resilience, bolstered by recent agreements between the EU and US and increased spending in Germany. This information about financial markets is for your reference only and should not be taken as investment advice. It is important to do thorough research and consult professionals before making any investment decisions, as risks and losses are your own responsibility. Given the weak US employment numbers released today, August 1st, 2025, the slight rise in the ISM New Orders index for July seems less important. The report indicates only 95,000 new jobs added, which is much lower than expected, reflecting a broader economic slowdown. Thus, we should be cautious about the manufacturing improvement, as it contradicts the more impactful jobs report. The US Dollar’s decline could speed up, making it attractive to take derivative positions against it in the coming weeks. With EUR/USD rising past 1.1550 and positive data from Germany, buying call options on the euro seems like a smart choice. This shows a clear strategy to favor European assets over American ones for now.

Market Strategy Observations

Gold’s rise to $3,350 is closely linked to the falling US Treasury yields, which dipped below 2.9% after today’s disappointing jobs report. This reaction indicates a strong belief that the Federal Reserve may pause its rate hikes. We should consider long positions in gold derivatives, as gold benefits when interest rate expectations decrease. The recent decline of Bitcoin below $115,000 suggests a potential separation from assets like gold, even in a weaker dollar environment. After a strong rally in July, the crypto market seems to be taking profits and may not be a safe haven at the moment. Traders should remain cautious and may want to use put options to protect against further declines. This situation resembles what we saw in 2019 when weak US economic indicators led to a declining dollar and rising gold prices. Based on that historical trend, strategies betting on ongoing US economic weakness could be promising. This might include options that perform well in a falling S&P 500 or a rising CBOE Volatility Index (VIX). Create your live VT Markets account and start trading now.

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