Gold prices have pulled back as markets assess a new US-Japan trade deal and await updates on EU-US negotiations. Currently, XAU/USD is trading above $3,400, supported by ongoing tariff risks and general policy uncertainty. The updated US-Japan agreement lowers tariffs on Japanese goods from 25% to 15% and includes plans for $550 billion in Japanese investments. Recent data showed a decline in US existing home sales, which fell to an annual rate of 3.93 million in June, below the expected 4.01 million. This decline points to high mortgage rates and affordability issues in the housing market. Meanwhile, EU-US trade discussions remain unresolved, raising concerns about potential new tariffs on EU imports.

Gold’s Appeal and Market Factors

Pressure on the Federal Reserve to lower interest rates has impacted yields, which in turn limits gains for the US Dollar. President Trump has publicly criticized Fed Chairman Jerome Powell and keeps pushing for lower rates. This political and economic backdrop has increased the attractiveness of gold. With XAU/USD at around $3,412, there’s a chance it could retest a high of $3,452, thanks to positive momentum shown by the Relative Strength Index at 63. Even though the USD is influential in global markets, its value remains tied to Federal Reserve policies. Changes in inflation or employment can affect USD strength. Typically, quantitative easing weakens the USD, while quantitative tightening strengthens it. We view the recent drop in gold prices as an opportunity rather than a warning. Despite some trade resolutions, ongoing policy uncertainty and tariff risks help support gold prices. Traders in derivatives should see this as a chance to position for an upward trend rather than selling long positions. The partial US-Japan agreement and recent temporary pauses on EU steel tariffs until 2025 may create short-term challenges for gold prices. However, we see these dips as good opportunities to enter the market. Buying call options with longer expiration times could help traders benefit from a bullish trend while minimizing risks.

Economic Data and Trading Strategies

New data shows US existing home sales dropped to an annual rate of 4.14 million in April 2024, adding to concerns about fragile economic conditions. This weakness, influenced by high mortgage rates, may push the central bank to consider easing its policies later this year, which supports gold as a hedge against a potential slowdown. The direction of the Federal Reserve is crucial, as Chairman Powell has indicated a “higher-for-longer” approach while under pressure to lower rates. The US inflation rate, still at 3.4%, complicates when adjustments might occur and can lead to market volatility. This situation makes strategies that profit from price fluctuations, like long straddles, particularly appealing. Historically, gold has thrived in uncertain times and before rate cuts, much like during the stagflation of the 1970s. With XAU/USD trading around $2,320 and its momentum indicator stable, we believe there’s potential to reach recent highs. We consider the current market conditions as a strategic opportunity to increase exposure and capitalize on potential gains. Create your live VT Markets account and start trading now.

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The White House has urged caution about rumors of a possible trade deal with the European Union. Officials mentioned that talks may be happening, but there isn’t any confirmed agreement or plan yet. They emphasized that it’s too early to jump to conclusions about what might happen. Current reports about a deal are seen as uncertain at this time.

Trade Deal Speculation

The White House’s warning suggests that any hopes for a quick trade deal are likely misguided. This uncertainty can shake the markets, especially for traders dealing with derivatives. It could be a good time to use strategies that benefit from price changes, which can be more profitable than just betting on market direction. The economic implications are huge, with U.S.-EU trade in goods and services recently topping $1.3 trillion each year. Even a small disruption or failure to remove existing tariffs can have serious consequences for many industries. Because of this strong economic connection, any news will likely have a big impact in the markets. We have noticed that volatility indexes, like the VIX, have stayed near all-time lows for most of the past year. This low level of implied volatility creates a good chance to buy options, acting as “cheap insurance” against sudden market shifts. If trade tensions increase, these options could quickly gain value.

Currency Market Impact

The EUR/USD currency pair, the most traded pair globally, will be a key indicator of market sentiment. We expect multinational companies to seek more currency options to protect themselves against unfavorable changes in exchange rates. This might create chances for traders to capitalize on wider trading ranges for this pair. Derivative activity will likely increase in sectors like automotive and aerospace. These industries are sensitive to tariff changes and have been at the center of past trade disputes. Buying protective puts on ETFs linked to these sectors could be a smart move if negative news arises. Looking back, periods of heightened trade tensions, like the U.S.-China trade war that started around 2018, led to extended volatility. Markets reacted quickly to official statements, creating opportunities for agile derivatives traders. We expect a similar trend could occur if current talks falter. Create your live VT Markets account and start trading now.

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The U.S. and Japan have made a trade deal that is larger and more complex than expected. However, UBS warns that this agreement might harm Japan’s economic growth. UBS highlights a 15% tariff that could hurt Japanese exports and corporate profits. As a result, business investment may decline, and consumer spending—both vital for Japan’s economy—could drop as well.

Impact on Japan’s GDP

According to UBS, these effects might lower Japan’s annual GDP growth by about 0.4 percentage points. Ongoing global trade uncertainties show just how delicate the recovery is. Given these challenges, UBS believes that the Bank of Japan will not raise interest rates anytime soon. They expect the central bank to keep its supportive policies in place until at least mid-2026, aiming to tighten only when a stronger recovery is visible. Based on this analysis, it seems that the Japanese yen will likely weaken in the coming weeks. The expected economic slowdown could lead the Bank of Japan to postpone any rate hikes, creating a gap in policy compared to other major central banks. This difference indicates a clear trend for currency traders. The U.S. dollar is currently near a 34-year high against the yen at 158, reinforcing this trend of a weaker yen. Although this situation raises the chance of government intervention, we view any declines in the USD/JPY pair as good buying chances. In this environment, buying call options on this currency pair becomes a wise strategy to capture potential gains while managing risk.

Forecast for Japanese Economy

The view of a weak recovery is backed by official data showing Japan’s economy shrank by an annualized 1.8% in the first quarter of 2024. This information strengthens the prediction that new trade tariffs will further hinder growth. Therefore, we expect that implied volatility on yen-related financial products will stay high, offering opportunities for traders who bet on price fluctuations. The outlook for the Nikkei 225 stock index is more complicated. A weaker yen helps Japan’s large exporters, but the economic slowdown presents a challenge for domestic demand. We believe this conflict will create uneven trading patterns, making strategies that benefit from time decay, such as selling out-of-the-money options, attractive. The expectation of continued supportive monetary policy through mid-2026 means that long-term interest rate swaps will likely reflect very low yields in Japan. This stability sharply contrasts with the uncertainty in the U.S. and Europe. Traders can use futures on Japanese Government Bonds to prepare for this extended period of low borrowing costs. Create your live VT Markets account and start trading now.

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NVIDIA’s stock has soared over 60% since April. The recent price correction found support at the Equal Legs zone, also called the Blue Box Area. According to the Elliott Wave analysis, there is a 7-swing pattern with a pullback to a buyers’ zone ranging from 101.78 to 76.16. The correction finished at 83.65, and a rally to new highs was expected. In less than three months, NVIDIA’s stock has risen as predicted, reaching all-time highs. This upward movement started from the Blue Box buying zone after a smart buying decision. Experts suggest holding onto the stock and not selling during any pullbacks due to its strong momentum. It’s important to recognize the risks of trading in the Foreign Exchange market, as it can lead to losing all your initial investment. The expectations in trading recommendations or Elliott Wave analyses don’t guarantee success, and losses can happen. Intellectual property rights protect this content, and unauthorized sharing is prohibited. Trading in the foreign exchange market requires a high level of caution since leverage can increase both profits and losses. Before getting involved, consider your goals, experience, and risk tolerance. We believe the analysis predicting the rally from the Blue Box area was spot on, paving the way for further gains. The stock has confirmed this outlook by reaching new all-time highs with strong momentum. We think this upward trend will continue for a while. This positive technical performance is strengthened by the recent 10-for-1 stock split that occurred on June 10, 2024. Such splits often attract new investors and can keep positive sentiment alive in the following weeks. We view this split as a catalyst for continued growth rather than a peak. For those trading derivatives, buying call options is a straightforward way to take part in the expected rise. Since selling during pullbacks is discouraged, these dips should be seen as chances to start or add to long call positions at better prices. Timing your entries will be critical to maximizing this strategy’s potential. Alternatively, selling out-of-the-money put credit spreads or cash-secured puts can help traders earn premiums while maintaining a bullish outlook. The stock’s strong performance has kept implied volatility high, which is advantageous for options sellers. This strategy can profit from price increases, stable movements, and the passage of time. We are further encouraged by the impressive Q1 earnings reported in May, where NVIDIA achieved $26.04 billion in revenue, far exceeding expectations. This shows that the stock’s rapid rise is supported by solid fundamentals and strong demand for its technology. We see a perfect match between the technical strength and the business reality. Historically, market leaders often experience continued strength after a stock split, and we expect a similar trend. However, the leverage involved in derivatives means traders need to manage their position sizes carefully to handle any short-term price fluctuations. It’s crucial to assess your risk tolerance before using these powerful trading instruments.

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The United States Energy Information Administration (EIA) reported a drop in crude oil stocks of 3.169 million barrels, which was greater than the expected decrease of 1.4 million barrels for July 18, 2025. This indicates a more significant reduction in oil inventories than anticipated. The AUD/USD traded at 0.6600, reaching new highs after four days of gains. This increase came after a positive sentiment following a trade agreement between the US and Japan.

Euro and US Dollar Movements

The EUR/USD rose for the fourth straight day, getting closer to the 1.1800 mark. This rise was fueled by a weaker US dollar and optimism regarding a potential deal between the US and EU. Gold prices fell to below $3,400 per troy ounce, influenced by reduced trade concerns. This change happened alongside the US-Japan agreement and the potential for US-EU deals. Bank of New York Mellon and Goldman Sachs announced a new opportunity for BNY clients to invest in money market funds. They will store ownership records using Goldman Sachs’ blockchain technology. Forex trading comes with significant risks. It’s essential to carefully consider your risk tolerance and investment goals before getting involved.

Crude Stock Decline and Market Impact

The larger-than-expected drop in crude stocks indicates strong demand, which could drive prices upward. Recent data showed a decline in U.S. commercial crude inventories, with the EIA reporting a 2.5 million barrel drop when a build was expected. This suggests a bullish trend, making call options on WTI futures an appealing strategy to benefit from potential gains. The Australian dollar has been rallying due to a renewed appetite for risk, which we expect to continue. A weaker US dollar, which recently saw its index (DXY) fall below 105 due to softer inflation reports, is providing significant support. We are positioning ourselves for further gains by considering bullish option strategies on this currency pair. Likewise, the Euro’s rise is benefiting from dollar weakness and optimism about trade between the US and Europe. Historically, periods of global growth paired with a weaker dollar have pushed the EUR/USD to break significant resistance levels. Our derivatives teams are looking into bull call spreads to profit from continued momentum while managing our risk. Gold’s price drop reflects a classic ‘risk-on’ shift, as investors move away from safe-haven assets. This trend mirrors previous periods when easing geopolitical or trade tensions led to sharp declines in precious metal prices. Therefore, we see a chance to purchase put options for further declines in gold prices. The blockchain initiative by the two financial institutions is a significant long-term move. Their use of this technology for core services points toward improved efficiency and transparency in the financial system. We will keep an eye on how it affects the broader fintech landscape for new opportunities. Amid these developments, it’s crucial to understand the considerable risks in foreign exchange markets. Every trading decision should follow careful consideration of your risk appetite and objectives. Create your live VT Markets account and start trading now.

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The major U.S. stock indices ended the day at their highest points, with the S&P and NASDAQ hitting new records. The Dow Jones was just 4 points away from its all-time high. – The Dow gained 507.85 points (1.14%) to close at 45,010.29. – The S&P rose by 49.29 points (0.78%) to reach 6,358.91. – The NASDAQ increased by 127.33 points (0.61%) to finish at 21,020.02. – The Russell 2000 also climbed, adding 34.37 points (1.53%) to close at 2,283.12.

Corporate Earnings Reports

Trading was influenced by several earnings reports, starting with Alphabet. Alphabet’s Q2 2025 earnings surpassed expectations, reporting an EPS of $2.31 and revenue of $96.43B, even though its shares fell by $3.12. Tesla fell short on EPS expectations but did beat revenue forecasts; its shares dropped by $1.46. ServiceNow beat both EPS and revenue estimates, leading to a $56.73 increase in its shares. Chipotle met EPS expectations but missed on revenue, causing a drop of $4.78 in its shares. IBM also exceeded EPS and revenue expectations, but its shares fell by $13.26. Both T-Mobile and CSX surpassed earnings estimates; T-Mobile’s shares declined slightly, while CSX shares rose by $0.42. With the market at record highs, there’s growing optimism, but this calls for caution. The AAII Investor Sentiment Survey indicates that bullish sentiment is at nearly 45%, well above the historical average. This often signals potential market pullbacks, suggesting that complacency is setting in. Now is a good time to think about protective strategies.

Market Volatility and Risk Management

The after-hours reactions to earnings reports serve as a warning sign. When a major player like Alphabet beats expectations but still sees a drop in share price, it indicates that high expectations are already built into the stock price. We believe that selling elevated volatility around future earnings, using strategies like short straddles or strangles, could be beneficial. Currently, the CBOE Volatility Index (VIX) is trading near 13, a low level that suggests market calm is fragile. In the past, such low volatility periods, like in late 2021, have often preceded periods of sharp market turbulence. Therefore, purchasing longer-dated, out-of-the-money put options on major indices can provide inexpensive portfolio insurance. We’re also noticing a significant performance gap, with small-cap stocks outperforming mega-cap tech stocks. This could signal a shift, making options on the Russell 2000 more appealing for bullish plays compared to the NASDAQ. This strategy allows traders to remain invested while also moving away from the most crowded and vulnerable areas of the market. Given the uncertainty at these peak levels, we prefer defined-risk spreads over buying naked options. Bear call spreads on overextended tech stocks, or bull put spreads on the strengthening small-cap index, help capture premium while limiting potential losses. This is a smart way to manage risk when market direction is unclear. The market’s next major shift will likely depend on upcoming macroeconomic data, not just corporate earnings. With the latest jobs report showing a strong labor market, any signs of rising inflation in the next CPI report could push the Federal Reserve toward a more aggressive approach. This remains a key factor that could trigger the anticipated volatility. Create your live VT Markets account and start trading now.

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Google’s Q2 2025 earnings report revealed earnings per share of $2.31, which is higher than the expected $2.18. Revenue reached $96.43 billion, exceeding the forecast of $93.97 billion. Capital expenditures were $22.45 billion, well above the anticipated $18.24 billion. In the cloud segment, revenue was $13.62 billion, outpacing the expected $13.14 billion. YouTube’s ad revenue hit $9.80 billion, surpassing the forecast of $9.56 billion. Revenue, excluding traffic acquisition costs (TAC), was $81.72 billion, above the estimate of $79.6 billion. Total advertising revenue was $71.34 billion, higher than the estimate of $69.71 billion. Operating income stood at $31.27 billion, slightly higher than the projected $31.07 billion. The forecast for full-year capital expenditures is now about $85 billion, increased from $75 billion, and above the previous $73.31 billion estimate. Artificial intelligence is driving growth across all areas of the business. These results clearly validate the company’s core operations. The strong performance in Cloud and Advertising revenue reinforces its market position amid fierce competition. This robust revenue should provide support for the stock in the short term. However, the significant rise in capital expenditures presents a challenge for traders. The updated forecast of around $85 billion is a substantial increase from roughly $32 billion spent in 2023. This level of spending could impact free cash flow and profit margins in the coming quarters. We think this spending is linked to expanding AI infrastructure for competition, which is good for the long term but creates immediate uncertainty. This mix of strong current results and heavy future investment often leads to greater market volatility. So, strategies that benefit from price movements, not just direction, are becoming more appealing. Considering the high cost of options, we recommend caution when buying calls or puts directly. Instead, traders might explore vertical spreads to limit risk and reduce the cost of entry for directional bets. Selling premium through strategies like iron condors could also work for those who expect the stock to stay within a new higher range after this initial movement.

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Many American savers are looking at Gold for their retirement plans due to economic uncertainty and market ups and downs. Adding Gold to an Individual Retirement Account (IRA) is gaining popularity because it provides security and helps diversify investments. Gold is seen as a stable option during inflation and global challenges. A Self-Directed IRA allows you to include physical Gold, giving more flexibility compared to traditional or Roth IRAs. However, there are specific IRS rules about which types of Gold you can invest in, and this Gold must be kept with an authorized custodian—not at home.

Gold And Tax Advantages

Gold IRAs come with tax benefits similar to traditional IRAs, making them appealing for retirement planning. Besides tax perks, adding Gold can help diversify your portfolio, which can reduce risks and potential losses from stocks or bonds. Still, Gold IRAs have fees for opening, custody, and insurance. Gold does not generate passive income, and there may be liquidity issues, making transactions slower because of the need for intermediaries. Also, required minimum distributions apply starting at age 73 for traditional IRAs, whether or not you hold Gold. Experts suggest adding Gold carefully to your retirement plan, recommending an allocation of 5% to 10%. This strategy helps you take advantage of Gold’s benefits while controlling risks and costs. We’ve noticed a growing interest in Gold IRAs, indicating strong demand for the physical asset. This trend, driven by concerns about inflation and market instability, suggests a bullish outlook that traders can use. Continued long-term buying provides support for gold prices in the near future.

Gold Prices And Future Trends

This positive sentiment is confirmed by recent data showing gold prices nearing all-time highs over $2,350 per ounce in May 2024. The World Gold Council also reported that central banks added a net 290 tonnes in the first quarter of 2024, highlighting strong institutional demand alongside retail interest, which boosts the metal’s sales. Given these factors, traders should consider long-biased strategies using options on gold futures or related ETFs. Buying call options can help you benefit from potential gains while limiting risk to the premium paid. This method allows you to take advantage of positive trends without the large cash investment needed for futures contracts. However, it’s important to be aware of the risks, especially that Gold does not yield income. Historically, Gold struggles when real interest rates are high, as investors find guaranteed returns elsewhere. With the U.S. Federal Reserve keeping rates steady, any unexpected rate hikes could push gold prices down, making long positions more expensive. The diversification benefit we mentioned is also seen in market volatility measures, such as the Cboe Gold ETF Volatility Index (GVZ). As geopolitical tensions and economic uncertainty rise, we expect implied volatility in gold options to increase. Traders might then consider strategies to benefit from this rising volatility, making existing long call positions more appealing. The requirement for IRA holders to use custodians and the slower transaction process for physical Gold creates a steady demand. This structural element helps absorb market dips, offering buying opportunities for agile derivative traders. We believe this indicates that any price declines may be shallow and temporary in the near future. Create your live VT Markets account and start trading now.

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McDonald’s stock is holding steady around $298, despite changing consumer habits and rising prices. The company is financially strong, with a market cap over $213 billion and a dividend yield of 2.37%, marking almost 50 years of increasing dividends. Goldman Sachs has recently boosted its rating to “Buy,” citing McDonald’s product innovations and digital strategies to regain market share. The company is rolling out new menu items like snack wraps and the “daily double” burger to attract budget-conscious customers. They are also enhancing their drink offerings based on insights from the CosMc’s concept to encourage more foot traffic and larger purchases. There’s also a change in leadership, with Annemarie Swijtink becoming CEO of McDonald’s Canada, indicating fresh strategic paths. McDonald’s is navigating a tough consumer environment with strong financial strategies, robust branding, and focused innovation. After a recent market correction, the stock price rebounded from a low of $276.80, indicating positive movement. The current share price is within a changing market framework, which may lead to a leading diagonal pattern. If wave (5) exceeds $333.27, this structure will be invalid, requiring a new evaluation of the stock’s pattern and broader effects. For now, attention is on completing the diagonal and preparing for a potential pullback. The recent bounce in the stock from its low is seen as a key buying signal, backed by Goldman Sachs’ upgrade. The new value items and improved beverage options should attract more customers soon, suggesting further upward potential, making short-term call options an appealing choice. The company is focusing on cost-conscious consumers, with initiatives like the upcoming $5 meal deal directly responding to recent shopping habits. A new survey from Revenue Management Solutions indicates that 25% of lower-income Americans are cutting back on fast food due to high prices. This new promotion could bring in more customers and help drive the stock price higher. However, the potential leading diagonal pattern raises a warning that a sharp downturn could follow the current rally. These patterns usually lead to deep pullbacks, erasing a large part of prior gains. Thus, we are considering buying put options to take advantage of a potential drop once the upward trend shows signs of slowing down. Historically, the stock experiences significant corrections after strong performances, like the drop from nearly $300 to $246 in the latter half of 2023. The mixed fundamental and technical indicators suggest increased volatility. This makes strategies that benefit from large price movements, such as a long straddle, a sensible approach for the upcoming weeks. Our bearish outlook depends on the stock staying below the $333.27 mark. A sustained move above that price would invalidate our diagonal pattern and force us to rethink our pullback strategy. We will monitor this level closely as it will be a key trigger for reassessing our position.

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Tesla’s Q2 2025 earnings report revealed some disappointing results, but shares increased slightly in after-market trading. The company’s revenue was $22.50 billion, which was less than the expected $22.64 billion. Earnings per share (EPS) came in at $0.33, lower than the predicted $0.42. The adjusted EPS was $0.40, also below the estimate of $0.42. However, the gross margin stood at 17.2%, exceeding the forecast of 16.5%. Free cash flow was $146 million, falling short of the expected $760 million. Tesla is on track to introduce new vehicles in 2025, including a more affordable model in the first half. The company’s new manufacturing strategy for the Cybercab aims for large-scale production in 2026. Despite challenges like tariffs and uncertain fiscal policies, Tesla is focusing on capital spending and research and development. The company maintains a strong balance sheet. The report presents a mixed bag for traders, with revenue and EPS misses offset by a surprise in gross margin. The positive after-hours market reaction suggests that expectations for more affordable models are outweighing the disappointing free cash flow figures. This creates a volatile environment for the weeks ahead. This uncertainty has impacted the options market, where we see high implied volatility. The current 30-day implied volatility for Tesla stock is around 58%, indicating that the market expects significant price movements, leading to expensive options contracts. This high entry cost must be considered in any trading strategy. For traders confident in the future of the Cybercab and new vehicles, selling premium could be a smart strategy. A bull put spread allows collectors to benefit from time decay and the high volatility. This defined-risk approach profits if the stock stays above a set strike price until expiration. On the other hand, those worried about economic pressures and increasing competition from companies like BYD should look at a bear call spread. This strategy also collects a good premium because of high volatility, allowing traders to profit from a potential decrease in enthusiasm after the earnings or a drop in the share price. Historically, Tesla’s stock has moved by double-digit percentages in the weeks following earnings. Traders who anticipate a large price change but are uncertain about the direction may consider a long strangle. However, they must believe that the stock will move enough to cover the high premium paid for both the call and put options.

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