Gold fails to hold gains after climbing to its highest level since June 5 during the Asian session.
Persistent inflation concerns linked to volatile oil prices continue to support expectations of further Fed rate hikes.
Escalating geopolitical tensions boost demand for the US dollar, adding pressure on gold and triggering an intraday retreat.
Gold (XAU/USD) gave back its earlier gains on Thursday, retreating from an intraday high near $4,450—the strongest level since June 5 reached during the Asian session—and falling back below the $4,400 mark. Initial support from softer US inflation data faded as investors refocused on the risk that rising energy prices could reignite inflation, reinforcing expectations that the Federal Reserve may still need to tighten policy further. The prospect of higher interest rates prompted some profit-taking in the non-yielding precious metal.
Data released on Wednesday showed US inflation cooled in July, with headline Consumer Price Index (CPI) growth easing to 3.4% year-over-year from 3.5%, in line with forecasts. Core CPI, which excludes food and energy, also met expectations, rising 0.2% on the month and 2.5% annually. Combined with last week’s weaker-than-expected Nonfarm Payrolls report, the figures strengthened the case for the Fed to keep rates unchanged in September, offering temporary support to gold prices.
However, concerns over future inflation remain elevated due to ongoing volatility in energy markets. Tensions between the United States and Iran continue to threaten oil supplies, with Washington and Tehran maintaining opposing positions over the Strait of Hormuz. At the same time, Iran-backed Houthi forces have intensified attacks on shipping routes in the Red Sea and Bab el-Mandeb Strait, increasing geopolitical risks and helping sustain higher crude oil prices.
The resulting inflation concerns have kept expectations for additional Fed tightening alive. Market pricing continues to suggest a strong likelihood of at least one further rate increase in 2026. These expectations have supported a rebound in the US dollar from post-CPI lows, creating headwinds for gold and contributing to Thursday’s pullback. Even so, analysts note that a sustained move below $4,400 would be needed to confirm a deeper corrective decline.
Attention now turns to upcoming US economic data, including the Producer Price Index (PPI) and weekly Initial Jobless Claims figures. Comments from Federal Open Market Committee (FOMC) officials will also be closely monitored for clues on the future path of monetary policy. Meanwhile, developments in the Middle East are likely to remain a key driver of market sentiment and short-term volatility in gold prices.
Gold remains biased to the upside after closing above the 100-day Simple Moving Average (SMA) and breaking through the 50% Fibonacci retracement of the April–June decline. Bullish momentum is further supported by an elevated Moving Average Convergence Divergence (MACD) indicator, signaling that buyers continue to maintain control. Meanwhile, the Relative Strength Index (RSI) stands at 67.44, just below overbought territory, suggesting the rally remains intact although momentum may be approaching stretched levels.
A sustained move above the recent swing high could open the door for a test of the 200-day SMA near $4,502. Beyond that, resistance is located at the 61.8% Fibonacci retracement level of $4,525.18. A decisive break above this zone may pave the way for further gains toward $4,683, followed by the next major upside target around $4,885.
On the downside, initial support is seen at the 100-day SMA near $4,387. Additional support levels are positioned at the 38.2% Fibonacci retracement around $4,302 and the 23.6% retracement at $4,164.38. Should selling pressure intensify, a more substantial support base emerges near $3,941.47.
Silver Imports Collapse as India’s Currency Defense Measures Cripple Demand
Last October, India imported more than 1,500 tonnes of silver. By May, that figure had plunged below 50 tonnes—not because demand disappeared, but because government policy effectively shut the market down.
The catalyst was a surge in oil prices and mounting pressure on the Indian rupee. As authorities moved to stabilize the currency, precious metals became a target. Higher import duties and tighter licensing requirements made silver significantly more expensive and harder to bring into the country, causing activity in the world’s largest silver-consuming market to slow dramatically. The timing is particularly noteworthy now because the oil prices that triggered these measures have recently reversed course.
Silver is currently trading near $62.17 per ounce, having gained nearly 6% over the past two days, while gold sits around $4,268 per ounce, its highest level in seven weeks. The rally has been fueled by easing geopolitical tensions after Iran and Oman advanced discussions on a framework for shipping through the Strait of Hormuz. As a result, oil prices have fallen roughly 10% over the past week to three-week lows, while markets have reduced the probability of a September rate hike to 55% from 67%. Lower energy costs, softer inflation expectations, and a more accommodative interest-rate outlook have all supported precious metals.
The Numbers Behind the Collapse
India imported just 46.8 tonnes of silver in May 2026, compared with 534.3 tonnes in May 2025. Industry participants reported that June imports were even lower. The decline represents a staggering 91% year-over-year drop and marks the weakest monthly import level since July 2023.
The contrast with late 2025 is striking. During the period when silver borrowing costs in London surged to record highs, India was importing more than 1,500 tonnes per month. Those elevated borrowing costs reflected tight physical supply, as traders who sold silver forward scrambled to secure metal. India was a key source of demand during that squeeze, making its subsequent disappearance from the market particularly significant.
To put the impact into perspective, the approximately 487 tonnes of silver India did not import in May equates to roughly 15.7 million ounces. According to forecasts from Metals Focus and the Silver Institute, the global silver market is expected to record a deficit of 46.3 million ounces in 2026. In other words, a single month of reduced Indian imports accounts for roughly one-third of the projected annual global shortfall.
Why It Happened—And Why Silver Wasn’t the Real Target
The underlying issue was not silver demand but India’s external balance. During the Iran conflict, crude oil prices climbed toward $118 per barrel in April. As a major energy importer, India felt the impact immediately. Oil imports jumped 53% in a single month, while the country’s merchandise trade deficit widened 37.3% to $28.38 billion. At the same time, the rupee weakened sharply, falling around 7% during 2026 and touching a record low near 96 per U.S. dollar.
Precious metals compounded the problem. Gold and silver imports reached $102.5 billion during the 2025–26 fiscal year, a 26.7% increase from the previous year. Their share of India’s total import bill rose to 14% from 11.8%, while silver imports alone hit a record $12 billion, totaling 7,335 tonnes.
In response, the government moved aggressively. On May 13, import duties on gold and silver were increased to 15% from 6%, shortly after Prime Minister Narendra Modi urged citizens to avoid buying bullion for a year. Authorities then introduced a licensing regime, restricting most forms of silver imports in mid-May and extending controls to silver grain and powder in June. Many banks remain unable to import precious metals because they have yet to receive the required permits.
The result has been a near standstill in silver imports. The sharp decline was not driven by a collapse in consumer interest but by deliberate policy measures aimed at reducing pressure on the rupee. Silver became collateral damage in India’s broader effort to defend its currency and manage its trade balance.
What the Situation Looks Like Inside India
Conditions in India’s domestic silver market paint a very different picture from the apparent weakness in import data. By early July, dealers were charging premiums of as much as $6.50 per ounce above official domestic prices, according to Reuters. Just two months earlier, buyers were receiving discounts of up to $5.50 per ounce. The shift highlights a market that has moved rapidly from oversupply to scarcity.
The premium is particularly significant because official domestic prices already incorporate both the 15% import duty and the 3% sales tax. Any additional premium reflects genuine supply tightness rather than taxation. In other words, buyers are paying extra simply because physical silver has become difficult to obtain.
Several buffers that initially eased the shortage have now largely been exhausted. Outflows from Indian silver exchange-traded funds released metal into the market and temporarily helped satisfy demand, but dealers indicate that those supplies have since been absorbed. As a result, consumers and traders have increasingly turned to Hindustan Zinc, India’s largest silver producer, despite its limited capacity to replace lost imports on a national scale.
The nature of India’s silver demand is also important. Record imports during the previous fiscal year were driven primarily by investment demand rather than jewelry consumption. Investors sought silver as a hedge against economic uncertainty, making this a category of demand that can return rapidly once restrictions are lifted.
Implications for Silver Investors
There are three major takeaways for investors.
The first is that the near-term impact is arguably bearish for silver prices. The disappearance of roughly 15.7 million ounces of Indian buying in a single month reduces pressure on global supply. If import restrictions remain in place through the key restocking period ahead of India’s October and November festival season, the global silver deficit could end up smaller than the currently projected 46.3 million ounces for 2026. From that perspective, India’s absence temporarily eases the strain on the physical market.
The second point is more constructive. Demand curtailed by regulation is generally postponed rather than permanently eliminated. India’s affinity for silver has not changed, nor have the cultural and investment drivers that support long-term consumption. What has changed is government policy. Should those restrictions be relaxed, demand could return quickly.
Data from Metals Focus and the Silver Institute underscore the scale of that potential rebound. Physical silver investment in India climbed 33% to 79.2 million ounces in 2025, while exchange-traded products attracted another 68.3 million ounces. Combined investment demand reached a record 147.6 million ounces. That substantial pool of buyers remains sidelined rather than absent.
The third and most important factor to monitor is oil. The restrictions were introduced when crude prices approached $118 per barrel, creating intense pressure on India’s trade balance and currency. Today, oil trades in the $70 range. If prices remain at these lower levels, the pressure on the rupee should continue to ease, helping narrow the trade deficit and weakening the rationale for maintaining punitive import duties on bullion. The very conditions that prompted the restrictions are now moving in the opposite direction.
Investors should pay particular attention to domestic Indian premiums. Any meaningful easing of import controls is likely to appear first through declining shortages and changing premiums before becoming visible in official import statistics.
One additional observation deserves caution. London’s silver market has appeared considerably more stable in recent months. According to Metals Focus and the Silver Institute, only 17% of London’s silver inventories remained unallocated to exchange-traded funds by the end of September 2025, compared with nearly 35% at the end of 2024, and available inventories have since improved. India’s retreat from the market may be one factor behind that stabilization, though it is not the only explanation. Softer solar-sector demand, ETF outflows, and increased recycling have likely contributed as well.
What can be stated with confidence is that the buyer that played a central role in the previous supply squeeze has largely been removed from the market by government policy rather than by changing fundamentals. Because those policies can be reversed, the situation remains fluid.
Over the longer term, the investment case for silver continues to rest on a structural supply deficit that has persisted for six consecutive years and has repeatedly been bridged by drawing down above-ground inventories. India’s absence may alter the timing of that supply-demand equation, but it does not fundamentally change it.
Silver advances toward $65.40 as investors await the release of July US CPI figures.
Economists forecast annual headline and core inflation to increase by 3.4% and 2.5%, respectively.
Crude oil prices remain elevated amid a significant decline in shipping activity through the Strait of Hormuz.
Silver (XAG/USD) climbed about 1.1% to trade near $65.40 during Wednesday’s Asian session, supported by investor caution ahead of the release of the US Consumer Price Index (CPI) report for July at 12:30 GMT.
Market forecasts suggest that annual US headline inflation eased to 3.4% from 3.5% in June. Core CPI, which excludes food and energy prices, is also expected to slow to 2.5% year-over-year from 2.6% previously. On a monthly basis, headline CPI is projected to rise 0.1%, while core inflation is anticipated to increase 0.2%.
The inflation figures are expected to provide fresh insight into the Federal Reserve’s policy path. In the Fed’s most recent policy statement, Chair Kevin Warsh highlighted persistent upside inflation risks and reiterated the central bank’s commitment to returning inflation to its 2% objective.
However, silver’s gains could be restrained by the continued surge in oil prices, driven by supply concerns linked to escalating tensions in the Middle East.
Data from Kpler showed that vessel traffic through the Strait of Hormuz—an essential route for nearly one-fifth of global energy shipments—fell to only six ships on August 10, compared with an average of around 11 over the previous ten days. The figure remains dramatically below pre-conflict levels of roughly 130–140 vessels per day, according to Reuters.
Separately, CME Group announced on Tuesday that it will introduce 24-hour trading for its 100-ounce silver futures contract starting in September, following strong demand for its recently launched 1-ounce gold futures contract, Reuters reported.
On the daily timeframe, XAG/USD is trading around $65.53, maintaining its upward momentum above the 20-day Exponential Moving Average (EMA) near $61.28, a signal that the short-term bullish trend remains intact.
The metal has continued to move higher after breaking out of its previous consolidation range. Meanwhile, the 14-day Relative Strength Index (RSI) stands at 61.21, indicating positive momentum while remaining below overbought territory, suggesting there is still room for further gains.
From a technical perspective, initial support is located at the 20-day EMA around $61.28. This level serves as a key foundation for the current recovery and could attract buying interest if prices retreat. On the upside, a decisive break above the August 10 peak at $66.59 may open the door for a rally toward the June 17 high of $71.56.
Dollar steadies as traders await pivotal U.S. inflation reports
The U.S. dollar traded largely unchanged on Tuesday as investors avoided major currency bets ahead of closely watched inflation data that could influence expectations for Federal Reserve policy. Meanwhile, oil prices edged higher after an Iranian official stated that the Strait of Hormuz would remain closed until Washington met Tehran’s conditions.
By 16:31 ET (20:31 GMT), the U.S. Dollar Index, which measures the greenback against a basket of six major currencies, was holding near 99.82.
Focus shifts to CPI and PPI releases
Market attention is firmly centered on the July Consumer Price Index (CPI) and Producer Price Index (PPI) reports due on Wednesday and Thursday. The inflation readings follow a weaker-than-expected U.S. employment report released last Friday, which prompted investors to reassess the outlook for future Federal Reserve interest-rate moves.
Analysts expect both headline and core CPI to show monthly increases after June’s subdued readings, while annual inflation measures are forecast to ease slightly compared with the previous month.
According to José Torres, Senior Economist at Interactive Brokers, core inflation could fall to its lowest level in more than five years if it comes in below expectations at 2.4%, highlighting how broader disinflation trends are being overshadowed by geopolitical risks.
Torres also noted that headline inflation is projected to remain notably higher than core inflation due to elevated food and energy costs. He argued that a lasting resolution to tensions in the Middle East could further accelerate the decline in overall inflationary pressures.
Torres added that a resolution to the ongoing geopolitical conflict could swiftly eliminate concerns about additional interest-rate hikes. In his view, inflation would move much closer to the Federal Reserve’s 2% target by the end of the year, shifting policymakers’ attention toward protecting the labor market from further weakening rather than combating price pressures.
Oil jumps as Iran ties Hormuz reopening to U.S. concessions
In the Middle East, oil prices climbed nearly 2% on Tuesday after surging around 5% in the previous session, as uncertainty surrounding the Strait of Hormuz continued to support energy markets.
Investors have been closely monitoring developments since U.S. officials, including President Donald Trump, repeatedly suggested that discussions over reopening the strategic waterway were underway. Iran, however, has denied engaging in direct negotiations with Washington, stating that its talks have been conducted exclusively through Oman.
Conflicting statements from both sides have added to market uncertainty. While U.S. officials have maintained that the strait remains open to commercial shipping, Iranian authorities have argued that it is effectively closed. The absence of a clear breakthrough toward a peace agreement has contributed to recent gains in oil prices.
Iran and Oman are reportedly working on a framework for managing the strait, with Qatari officials indicating that negotiations have reached an advanced and sensitive stage. At the same time, reports have suggested that Washington and Tehran may be edging closer to a potential arrangement, with Oman and Pakistan continuing to play key mediating roles.
Tehran has insisted that any reopening of the Strait of Hormuz depends on Washington fulfilling commitments outlined in a previously negotiated interim peace framework, including lifting sanctions, ending naval restrictions, and providing compensation for war-related damage. The U.S. has responded with demands of its own, underscoring the ongoing deadlock.
Iranian officials reiterated that the waterway would remain closed until the country’s conditions are met, signaling that tensions remain far from resolved.
Shipping activity through the strait has also slowed markedly. Data from maritime analytics firm Kpler showed vessel crossings declining sharply over the weekend, highlighting the disruption to one of the world’s most important energy transit routes.
Yen retreats while Australian dollar gains after RBA decision
The Japanese yen weakened modestly against the U.S. dollar, surrendering additional gains made following last month’s major currency intervention. USD/JPY rose 0.1% to 159.31, moving closer to the psychologically important 160 threshold.
Meanwhile, the Australian dollar edged 0.1% higher to $0.7059 after the Reserve Bank of Australia left its benchmark interest rate unchanged at 4.35%, in line with market expectations.
The RBA noted that disruptions to global oil supplies are adding to inflationary pressures and that higher fuel costs appear to be filtering through to a broader range of goods and services. As a result, policymakers expect inflation to remain elevated for an extended period.
The central bank acknowledged that tighter financial conditions and slowing economic activity are helping to moderate demand. However, it emphasized that inflation remains well above target and is not expected to return to the midpoint of its target range until late 2027, with risks still skewed to the upside.
U.S. stock futures were largely unchanged on Tuesday night following a second consecutive day of losses on Wall Street, as investors remained cautious ahead of key inflation data that could provide insight into the Federal Reserve’s future interest-rate decisions.
S&P 500 futures edged up 0.1% to 7,752.0, while Nasdaq 100 futures gained 0.1% to 29,665.0. Dow Jones futures were little changed at 53,868.0.
Investors Focus on CPI Report for Fed Policy Signals
During Tuesday’s regular trading session, the S&P 500 slipped 0.3%, the Nasdaq Composite lost 0.6%, and the Dow Jones Industrial Average declined 0.3%.
Market participants are now looking toward Wednesday’s U.S. Consumer Price Index (CPI) release, which is expected to play a key role in shaping expectations for upcoming Federal Reserve policy decisions.
Analysts forecast that headline inflation increased 0.1% in July after a 0.4% decline in June. On an annual basis, CPI is projected to ease slightly to 3.4% from 3.5% previously.
Core inflation, which excludes volatile food and energy prices, is expected to rise 0.2% month-over-month.
The inflation report carries added significance after recent weakness in the U.S. labor market dampened expectations of a Fed rate hike in September. However, stronger-than-anticipated inflation data could prompt investors to reassess the likelihood of tighter monetary policy.
With major U.S. equity indexes still trading near record levels, markets remain highly sensitive to any signs that inflationary pressures are proving more persistent than policymakers had hoped.
Oil Advances Further as Hormuz Uncertainty Continues to Weigh on Markets
Geopolitical tensions remained a key concern for investors as negotiations between the United States and Iran over reopening the Strait of Hormuz encountered additional setbacks. Tehran reportedly sought major concessions, including access to frozen Iranian funds and a reduction of U.S. involvement in regional conflicts, while President Donald Trump insisted that Iran should provide compensation for damages linked to the crisis.
The ongoing uncertainty surrounding one of the world’s most important energy transit routes continued to support crude prices. Brent oil climbed for a sixth consecutive session on Wednesday, recovering toward the $90-per-barrel mark as traders assessed the risks to global supply flows.
Concerns were further amplified by new security incidents in regional shipping lanes. Houthi forces claimed responsibility for an attack on commercial vessels in the Bab el-Mandeb Strait that resulted in multiple fatalities, including cargo ship crew members and Yemeni rescue personnel. Separately, the U.S. Navy reportedly disabled a Panama-flagged ship near the Gulf of Oman, adding to fears that maritime disruptions could persist and delay any near-term easing of tensions.
Bitcoin dropped under the $65,000 mark on Monday, retreating as higher oil prices dampened investor appetite for risk. Market sentiment was also affected by another Bitcoin sale from major corporate holder Strategy.
The leading cryptocurrency was down 1.6%, trading at $64,147.9 as of 17:00 ET (21:00 GMT).
Traders focus on U.S. inflation data for Federal Reserve signals
Bitcoin and the broader crypto market gained support on Friday after U.S. employment data revealed the first monthly decline in nonfarm payrolls since February, driven largely by losses in local government education jobs. Payroll figures for May and June were also revised down by a combined 103,000 positions.
The labor report added uncertainty to the Federal Reserve’s policy outlook. While the broader job market continues to show resilience, inflation concerns remain elevated due to volatile oil prices linked to the conflict involving Iran. Some Fed officials also indicated a preference for tighter monetary policy during the central bank’s July meeting.
Following the data release, traders reduced expectations for a September interest-rate increase. Higher borrowing costs typically reduce demand for risk-sensitive assets, including cryptocurrencies.
Investors are now turning their attention to a series of key U.S. inflation reports this week for further guidance on the Fed’s next moves. The July Consumer Price Index (CPI) is due on Wednesday, followed by the Producer Price Index (PPI) on Thursday, while July retail sales data will be released on Friday.
Oil surge and Hormuz tensions weigh on crypto sentiment
Oil prices jumped nearly 5% on Monday after Iran rejected direct negotiations with the United States and reiterated that a full reopening of the Strait of Hormuz would depend on Washington meeting a series of demands. Concerns over global energy supplies intensified further following attacks by Iran-backed Houthi forces on Saudi energy facilities, prompting investors to seek safety in the U.S. dollar.
Crude prices had fallen the previous week on optimism surrounding potential U.S.-Iran talks. However, those losses narrowed as Tehran repeatedly denied claims of ongoing negotiations and reports emerged that a proposed Hormuz management framework could restrict access for U.S., Israeli, and other vessels deemed hostile.
Iranian state media reported that a parliamentary committee had approved the framework, including the proposed restrictions. Foreign Ministry spokesman Esmaeil Baqaei said Iran and Oman were still working on a joint statement governing the strait, adding that the plan would establish monitoring mechanisms for vessel traffic and involve compensation arrangements.
Tehran also reaffirmed that direct talks with Washington remain off the table, citing alleged breaches of the temporary peace agreement reached in June. Iranian officials maintained that lifting sanctions, ending the U.S. naval presence, and compensation for wartime damages are prerequisites for fully reopening the strategic waterway.
U.S. President Donald Trump responded by stating that Iran’s compensation demands would be met with U.S. claims for damages as well, adding that his negotiating team had been instructed to include the issue in any future discussions.
Strategy trims Bitcoin holdings
Separately, Strategy disclosed in a filing with the U.S. Securities and Exchange Commission that it sold 1,690 Bitcoin between August 3 and August 9 for approximately $108.6 million, at an average price of $64,262 per coin.
Following the sale, the company’s Bitcoin holdings declined to 840,447 BTC, currently worth about $54.7 billion. Strategy’s average acquisition cost remains around $75,385 per Bitcoin, representing a total investment of roughly $63.4 billion, including related expenses.
The transaction came shortly after the company raised $653.1 million through the sale of more than 6.5 million shares of MSTR stock. Strategy said the proceeds were used to repurchase over 1.15 million shares of its STRC preferred stock and strengthen its cash position, which stood at $4.65 billion as of August 9.
Altcoins track Bitcoin lower
The broader cryptocurrency market also traded in negative territory on Monday, with most major altcoins posting losses alongside Bitcoin.
Ethereum declined 2.4% to $1,877.78.
XRP dropped 2.3% to $1.0189.
Solana lost 1.3%.
Cardano fell 2.6%.
Dogecoin slipped 1%.
The pullback across digital assets reflected a combination of risk-off sentiment driven by geopolitical uncertainty, rising energy prices, and investor caution ahead of key U.S. inflation data later this week.
WTI could extend its gains as President Trump’s latest compensation demands on Tehran reduce expectations for a near-term peace deal.
Washington is reportedly leaning toward tougher economic sanctions rather than military intervention to pressure Iran into reopening the Strait of Hormuz.
Negotiations between Oman and Iran over restoring access to the key shipping corridor remain at a standstill while both sides await progress on a broader agreement with the US.
WTI crude oil extends its rally after surging more than 6.5% in the previous session, trading near $81.40 during Tuesday’s Asian session. Oil prices remain supported as uncertainty deepens over prospects for a US-Iran agreement aimed at ending hostilities and reopening the strategically important Strait of Hormuz.
Workers manage crude oil barrels near a pipe discharging oily wastewater at an extraction site.
Expectations for a quick resolution have faded after US President Donald Trump unveiled a new set of demands for Tehran, including compensation for victims of regional conflicts. The announcement followed Iran’s insistence on receiving reparations as part of any agreement to end the war, raising concerns that supply disruptions could persist for longer than previously anticipated.
Instead of pursuing additional military action to reopen the crucial shipping corridor, the US administration appears to favor escalating economic sanctions on Iran. At the same time, talks between Iran and Oman regarding the reopening of the Strait of Hormuz remain deadlocked, with Tehran linking progress to the achievement of a broader peace deal with Washington.
Additional support for crude prices comes from growing skepticism over a near-term diplomatic breakthrough. Analysts at TD Securities noted that a resolution to tensions surrounding the Strait of Hormuz remains difficult to achieve, describing a potential “Hormuz deal” as still out of reach. The bank added that persistent geopolitical risks and the threat of disruptions at major energy transit routes continue to provide a favorable backdrop for oil prices and trend-following market participants.
Gold extends its advance for a third consecutive session, reaching its highest level in more than two months on Tuesday.
Easing expectations of further Federal Reserve rate hikes continue to support demand for the non-yielding precious metal.
Investors may remain cautious ahead of new geopolitical developments and the release of the latest US inflation data.
Gold (XAU/USD) continued its upward momentum for a third straight session on Tuesday, marking gains in five of the past six trading days and reaching its highest level since early June above the $4,400 threshold during Asian trading. The rally has been supported by last Friday’s weaker-than-expected US employment data, which signaled a softening labor market and reduced expectations that the Federal Reserve will tighten monetary policy further, boosting demand for the non-yielding precious metal.
Despite the advance, concerns over inflation remain in focus as oil prices stay volatile amid the ongoing Iran conflict. These inflation risks have prevented markets from fully dismissing the possibility of additional Fed rate hikes, helping the US Dollar maintain recent gains and limiting Gold’s upside potential. Adding to geopolitical uncertainty, US President Donald Trump rejected Iran’s request for compensation related to war damages and instead blamed Tehran for casualties across the region.
Tensions in the Middle East remain elevated after Iran ruled out renewed negotiations with Trump until after his term ends in January 2029, reducing hopes for a near-term resolution and the reopening of the Strait of Hormuz. At the same time, disruptions in the Bab el-Mandeb Strait caused by Houthi naval actions continue to constrain shipping activity, contributing to a sharp rise in crude oil prices and reigniting inflation concerns. Markets still anticipate at least one Federal Reserve rate increase in 2026.
These factors continue to support higher US Treasury yields and provide underlying strength to the US Dollar, suggesting caution for traders expecting Gold’s rally to extend aggressively in the short term. Market participants are also likely to focus on upcoming US inflation data, with the Consumer Price Index due Wednesday and the Producer Price Index scheduled for Thursday. The reports could offer important clues about the Fed’s policy outlook and shape the next move in both the Dollar and Gold markets.
A decisive intraday move above both the 100-day Simple Moving Average (SMA) and the 50% Fibonacci retracement of the April–June decline indicates that bullish momentum remains intact. This strengthens the case for a continued advance toward the 200-day SMA around $4,498, with further upside targets at the 61.8% Fibonacci retracement near $4,515 and the 78.6% retracement level around $4,669.
On the downside, initial support is located at the 50% retracement level near $4,406, followed closely by the 100-day SMA around $4,389. A deeper pullback could expose the 38.2% Fibonacci retracement at roughly $4,297, while stronger support emerges near the 23.6% retracement around $4,162. Beyond that, the major downside reference remains the cycle low near $3,945.
Financial history is filled with spectacular collapses caused by the same dangerous combination: excessive leverage, concentrated directional bets, and positions that become difficult to exit during stress. When markets move against highly leveraged investors, margin calls often arrive long before assets can be sold at reasonable prices.
One notable example occurred in early 2021 when the family office Archegos Capital Management accumulated roughly $100 billion in market exposure while backed by only about $20 billion in equity. A stock offering by ViacomCBS sparked a sharp decline in its shares, triggering margin calls from prime brokers. After Archegos failed to meet those demands, banks rushed to unload billions of dollars of stock, accelerating the collapse.
The firm’s entire equity base was wiped out within days. Among the hardest-hit institutions was Credit Suisse, which suffered losses exceeding $5.5 billion. The damage contributed to the bank’s eventual downfall and rescue by UBS.
A similar story unfolded in 1998 with Long-Term Capital Management (LTCM). The hedge fund amassed more than $125 billion in assets and roughly $1.25 trillion in derivative exposure while operating with only $4.7 billion in equity, implying leverage exceeding 25-to-1.
Founded by renowned trader John Meriwether alongside Nobel laureates Myron Scholes and Robert Merton, LTCM pursued fixed-income arbitrage strategies designed to profit from tiny pricing inefficiencies. Those trades relied heavily on borrowed money.
The strategy unraveled after Russia defaulted on its domestic debt in August 1998. Investors fled to safety, liquidity evaporated, and market relationships that LTCM depended upon broke down. With fears of systemic financial contagion spreading, the Federal Reserve Bank of New York coordinated a $3.65 billion private-sector rescue involving 14 major financial institutions to unwind the fund’s positions in an orderly manner.
A decade later, the world endured the Global Financial Crisis, driven in large part by excessive leverage embedded throughout the subprime mortgage market. That era inspired films such as Margin Call and The Big Short, both illustrating how leverage can transform manageable losses into systemic threats.
More recently, attention shifted to the reported collapse of Situational Awareness LP, a hedge fund that reportedly employed leverage of around 400%. The fund suffered a dramatic drawdown that triggered widespread margin calls and forced the liquidation of much of its portfolio.
The fund, managed by former OpenAI researcher Leopold Aschenbrenner, had reportedly grown rapidly before suffering losses estimated at roughly 67%. Its strategy often involved highly leveraged pair trades, such as buying AI infrastructure and hardware stocks while shorting established software companies. That approach failed when AI-related holdings plunged while short positions simultaneously rallied, inflicting losses on both sides of the trade.
As losses mounted, major prime brokers demanded additional collateral. To avoid a disorderly liquidation, Citadel stepped in and acquired a large portion of the fund’s public-equity portfolio through a block transaction, reducing immediate market disruption.
The episode reflects a broader trend: leverage increased substantially during the technology and AI-driven rally. FINRA margin debt recently climbed to record nominal levels, estimated between $1.25 trillion and $1.28 trillion.
Whether that represents excessive risk depends on the benchmark used. Relative to total stock-market capitalization, margin debt stands near 1.8%–1.9%, broadly consistent with historical norms. This suggests borrowing has risen largely alongside equity values rather than dramatically outpacing them.
However, when compared with U.S. GDP, margin debt is significantly elevated at roughly 4.1%, well above long-term averages. That indicates investors are assuming greater financial risk relative to the size of the underlying economy.
Institutional investors have generally diversified into market-neutral, quantitative, and lower-beta strategies to reduce directional exposure. Meanwhile, retail traders and momentum-focused investors remain heavily concentrated in leveraged ETFs, options, and high-growth technology stocks.
Although leverage relative to market capitalization does not appear extreme, the sheer amount of debt in the system leaves markets vulnerable to sudden shocks. Large debt balances reduce the market’s tolerance for mistakes. A disappointing earnings report or interest-rate shock can trigger margin calls, forced selling, and a self-reinforcing cycle of declining prices.
To manage these risks, prime brokers have strengthened their risk controls. Many now rely on continuous intraday monitoring rather than end-of-day assessments, allowing them to identify leverage problems in real time.
Risk managers are also adjusting margin requirements more aggressively for volatile, crowded, or illiquid positions. Lenders increasingly evaluate a fund’s total leverage across multiple broker relationships, making it harder to conceal excessive borrowing by spreading trades across different institutions.
Global interconnectedness adds another layer of vulnerability. A rapid deleveraging event in Asia can quickly affect U.S. equities and fixed-income markets through funding channels, Treasury holdings, and cross-border risk models.
Because there is no global authority capable of halting trading across all markets simultaneously, systemic selling pressure can simply migrate from one region to another. Stopping the panic in one market does not necessarily eliminate the underlying risk—it may merely shift it elsewhere.
Although markets recovered quickly following the recent turmoil, aided by strong AI-related earnings results, the U.S. remains exposed to potential spillover effects from highly leveraged global markets.
By acquiring Situational Awareness’s concentrated equity positions off-market, Citadel helped prevent a disorderly fire sale and reduced the risk of a chain reaction among other funds holding similar positions, illustrating how quickly leverage can transform isolated losses into broader market concerns.
How Parents Can Support Their Adult Children Financially Without Undermining Retirement
The Beatles may have sung that money can’t buy love, but for many young adults today, money can make a significant difference. People in their 20s and 30s are facing a challenging financial environment marked by AI-driven job market disruptions, high rents, elevated living costs, and housing prices that remain out of reach for many first-time buyers. With median home prices approaching $400,000, even a standard 20% down payment can feel impossible to accumulate.
As a result, many parents are confronted with a difficult question: Should they provide financial assistance, or should they encourage their children to navigate these challenges independently?
A Generational Perspective
Many Baby Boomers inherited a conservative financial mindset from parents who lived through the Great Depression. Core principles such as living frugally, paying off debt, investing cautiously, and preserving principal shaped their approach to wealth.
However, for parents who ultimately intend to leave assets to their children, the real consideration may be whether financial support is more valuable today than as a future inheritance. Assistance provided now could help adult children purchase a home, launch a business, pursue further education, or start a family—milestones that may otherwise be delayed due to financial pressures.
When It’s More About Parenting Than Money
For families with substantial liquid wealth, the decision often becomes less about financial capacity and more about personal philosophy. By adulthood, children have generally developed their attitudes toward work and responsibility. If they are making genuine efforts but struggling against broader economic realities, financial support can serve as a catalyst for opportunity rather than a simple handout.
Ways Parents Can Help Without Jeopardizing Retirement
Parents do not need vast wealth to provide meaningful assistance. With careful planning, support can be structured in ways that minimize the impact on retirement security.
Use Appreciated Investments Strategically: Gifting assets with long-term capital gains can provide children with access to funds while preserving the parent’s recurring investment income.
Optimize Social Security Planning: Parents may choose to allocate part of their Social Security income to help children financially, whether by claiming benefits earlier or by delaying benefits to increase future payouts.
Offer Family Loans: Parents can lend money directly to their children using IRS-compliant interest rates, potentially providing more favorable borrowing terms than traditional lenders while keeping interest payments within the family.
Key Takeaway
Supporting adult children financially does not have to come at the expense of retirement stability. For parents with the means to help, even modest assistance can have a meaningful impact on their children’s lives. In many cases, providing support when it is most needed may create more value than leaving a larger inheritance years down the road.
Cloudflare — Automated internet traffic has now surpassed human-generated traffic, and the company positioned at the center of that shift is seeing renewed growth momentum.
Optical infrastructure emerges as the next bottleneck — Companies across the optics ecosystem delivered record results amid tightening supply conditions and the possibility of new import restrictions.
SpaceX — The company posted a standout first-quarter performance while the expiration of a long-standing share lockup removed a major overhang for investors.
Much of the AI conversation typically revolves around the model layer—who has the most advanced models and whether those models can be monetized effectively.
This week, however, markets focused on a different question: who profits from the infrastructure surrounding AI?
Several companies reported results from distinct layers of the AI ecosystem: the internet edge, the physical networking layer, and the frontier of computing. Their earnings represented more than strong quarterly numbers—they highlighted structural shifts taking place across the stack.
Cloudflare underscored a milestone that may permanently reshape internet traffic dynamics.
Optics providers posted record performances while supply constraints increasingly resemble the memory shortages seen in previous technology cycles.
SpaceX released its inaugural earnings report just as concerns surrounding restricted share liquidity began to fade.
The underlying message remains consistent: follow the capital flows. This week, investment attention gravitated toward the network edge, optical connectivity, and low-Earth orbit infrastructure rather than the AI models themselves.
1. Cloudflare: The Infrastructure Behind the Agentic Internet
For the first time, automated and AI-driven traffic on the internet has surpassed traffic generated by humans, and Cloudflare believes this new category could expand another 1,000-fold in the years ahead.
The significance of that milestone extends beyond simple traffic statistics. It signals a transition from an internet centered on people browsing, searching, and clicking to one increasingly powered by AI agents that communicate, make decisions, conduct transactions, and perform tasks autonomously. Cloudflare is strategically positioned at the center of this transformation.
The trend is already showing up in the company’s financial results. Revenue growth accelerated to roughly 36% year-over-year, reaching $696 million, well above Wall Street expectations of around 30% and notably stronger than the low-20% growth rates seen in recent quarters. Other key metrics were equally impressive: remaining performance obligations increased 38%, the company added a record 282 large customers, and net revenue retention improved to 120%, up 600 basis points from a year earlier. Management also lifted full-year revenue guidance to approximately $2.87 billion, helping drive the stock about 16% higher.
Perhaps the most important takeaway was the changing composition of network traffic. AI and machine-to-machine activity now represent more than half of all traffic moving through Cloudflare’s infrastructure, and management expects this segment to grow dramatically from current levels. A company originally designed to sit between users and the internet is increasingly becoming the intermediary between AI agents and the internet itself.
A key beneficiary of this shift is Cloudflare Workers, the company’s edge-computing platform that allows developers to build and deploy applications across Cloudflare’s global network. As AI agents generate ever-larger volumes of requests, infrastructure capable of processing workloads close to end users—or other machines—becomes increasingly valuable.
Developer adoption continues to reinforce that thesis. Nearly 2 million developers joined the platform during the quarter, pushing the total beyond 7.4 million. Workers has become Cloudflare’s fastest-growing product suite, while new monetization opportunities are emerging through services such as paid AI-agent traffic and Cloudflare Pay, a payment framework designed to support the high-volume microtransactions expected in an agent-driven economy.
The takeaway: Cloudflare is evolving beyond its roots as a cybersecurity and application-services provider to become a critical infrastructure layer for the emerging agent-driven internet. In effect, the company is positioning itself as a digital toll collector for AI-powered activity—a software counterpart to the hardware infrastructure companies benefiting from the AI boom. More importantly, its latest results provide some of the strongest evidence so far that the rise of the agentic internet is beginning to translate into meaningful revenue growth.
2. Optics Emerges as the Next AI Infrastructure Bottleneck
If memory chips were the standout infrastructure investment theme over the past year, optical networking technology is increasingly looking like the next major opportunity heading toward 2027. This week strengthened that view through both strong earnings results and a potential regulatory catalyst.
Record Demand Meets Tight Supply
The clearest signal came from Applied Optoelectronics, which reported record quarterly revenue of $191.9 million, up 86% year-over-year, while returning to profitability. Data center demand was the primary growth driver, rising 140% to $107.7 million, with 800G optical transceivers more than doubling sequentially and becoming the largest contributor to sales.
Management projected next-quarter revenue of $255–290 million and expects approximately $1.1 billion in revenue for the full year. More notably, executives indicated that customer orders already extend into mid-2027, with future growth constrained not by demand but by manufacturing capacity and component availability.
That distinction is critical. The challenge facing the industry is no longer generating demand—it is supplying enough hardware to meet it.
The broader ecosystem tells a similar story. Arista Networks raised guidance for the third time this year, while Astera Labs delivered another record quarter with revenue growth exceeding 100%. Together, these results suggest that investors are increasingly rewarding the infrastructure that connects AI systems, rather than focusing solely on the processors powering them.
A Regulatory Catalyst
The investment thesis received an additional boost from reports that U.S. regulators are considering restrictions on Chinese-made optical transceivers used in data centers.
These devices play a vital role in AI infrastructure by converting electrical signals into optical signals and vice versa, enabling high-speed communication between servers, networking equipment, and AI clusters. Chinese manufacturers currently hold a significant share of the global market, meaning any restrictions could redirect demand toward Western suppliers.
Markets immediately focused on potential beneficiaries such as Lumentum and Coherent. However, the larger story may not be market-share gains but supply constraints.
Replacing a substantial portion of global optical-transceiver production is not something that can happen quickly. Manufacturing capacity takes years to expand, and many critical components—including high-performance indium-phosphide lasers—still depend heavily on supply chains linked to China.]
Why the Memory Comparison Matters
The current setup closely resembles the memory industry during previous cycles:
Demand is growing rapidly and remains relatively insensitive to price.
Supply expansion requires significant time and capital.
Capacity constraints create pricing power for suppliers.
Margin expansion often appears only after shortages become apparent.
In that sense, optics may be following the same playbook that previously drove outsized gains in memory-related businesses. Rather than a temporary demand surge, the sector appears to be facing a structural supply bottleneck that could support stronger pricing and profitability across the value chain for years to come.
The key takeaway is that AI spending is increasingly flowing into the networking and connectivity layers that link computing resources together. As AI clusters grow larger and more complex, optical infrastructure is becoming just as critical as the processors at the center of those systems.
3. SpaceX: A Major Technical Overhang Begins to Clear
SpaceX delivered its first earnings report as a publicly traded company, and the underlying business performance was exceptionally strong.
Revenue surged 92% year-over-year to $7.8 billion, while adjusted EBITDA climbed 191% to $3.5 billion. The company’s net loss narrowed significantly to $541 million, compared with more than $1 billion a year earlier.
Growth Across Connectivity and Compute
The primary growth engine remains Starlink, which generated $4.3 billion in revenue, up 66% from the prior year. The satellite internet business added a record 1.7 million net subscribers during the quarter, bringing its total user base to roughly 12 million.
However, the fastest-growing segment is AI infrastructure. Revenue from SpaceX’s AI and compute operations more than tripled to $2.6 billion, achieved positive EBITDA, and entered the third quarter with approximately $6.7 billion in contracted capacity commitments from customers including major AI developers.
Management reaffirmed an aggressive growth outlook, targeting a $100 billion annualized revenue run rate by year-end and accelerating its timeline toward a $1 trillion revenue objective, now expected by 2030.
During the earnings call, Elon Musk outlined an ambitious AI roadmap, including a commitment to build future AI infrastructure exclusively on Nvidia technology and plans to expand computing capacity beyond 2 gigawatts by the end of this year, potentially approaching 10 gigawatts by late 2027. The company also unveiled StarMind AI-1, an orbital computing platform designed to bring data-center-scale AI processing into space.
Heavy Investment Raises Familiar Questions
The main concern for investors was capital spending. SpaceX reported approximately $18.4 billion in capital expenditures, largely directed toward AI infrastructure expansion. The spending weighed on sentiment and pushed shares lower immediately after earnings.
Yet this concern mirrors a broader debate playing out across the technology sector. The question is not whether demand exists, but whether companies are investing too aggressively ahead of future returns. From an infrastructure perspective, that remains more of a challenge for buyers than suppliers.
The Bigger Story: The Lockup Expiration
The more important development this week was technical rather than operational.
On August 6, a substantial portion of previously restricted SpaceX shares became eligible for trading as the company’s IPO lockup period began to expire. Approximately 911 million shares entered the market, increasing the potential trading float by more than 40% and effectively more than doubling the freely tradable share count.
Many investors had been waiting for this event before establishing positions, expecting the surge in available shares to pressure the stock.
Instead, the opposite occurred.
Despite the anticipated increase in supply, shares rose roughly 6% on the day the lockup expiration took effect. When a widely anticipated supply event arrives and the stock advances rather than declines, it often signals that the market has already absorbed the concern.
For investors who missed the IPO, the lockup expiration may represent a technical reset rather than a fundamental threat.
Key Investment Takeaways
Three separate earnings reports highlighted a common theme: the biggest beneficiaries of AI may not always be the model developers themselves, but the infrastructure layers surrounding them.
Cloudflare is emerging as a key platform for the growing agentic internet, monetizing the shift from human-driven traffic to machine-driven activity.
Optical networking infrastructure remains one of the most compelling opportunities, supported by strong demand, constrained supply, and potential regulatory tailwinds.
SpaceX continues to expand across launch services, satellite connectivity, and AI compute, while the lockup expiration appears to be reducing a major technical obstacle for the stock.
The market remains focused on whether AI spending has peaked. The evidence from this week’s results suggests the opposite: capital continues to flow into the infrastructure that enables AI—across network edges, optical connectivity, and low-Earth-orbit platforms—creating opportunities well beyond the model layer itself.
The US Dollar remains supported by strong safe-haven inflows as uncertainty persists over the reopening of the Strait of Hormuz.
A larger-than-expected decline of 23,000 jobs in July, coupled with downward revisions to previous payroll figures, points to a softening US labor market and reduces expectations for further Federal Reserve tightening.
According to the CME FedWatch Tool, the probability of a September Fed rate increase has fallen to 46%, compared with 67% previously.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, edged higher to around 99.70 during Monday’s Asian session, recovering after posting slight losses in the previous trading day.
Demand for the US Dollar remains supported by a cautious market mood as geopolitical risks stay elevated. The conflict between the United States and Iran has entered a sensitive diplomatic stage, while ongoing military activity and uncertainty surrounding the Strait of Hormuz continue to drive investors toward safe-haven assets. Although Iran indicated that Oman-mediated talks on managing the waterway are progressing, traders remain reluctant to abandon defensive positions, helping the Dollar retain its strength.
Meanwhile, softer US labor market data has reduced expectations for additional Federal Reserve tightening in the near term. July’s Nonfarm Payrolls report showed an unexpected decline of 23,000 jobs, while June’s payroll growth was revised down sharply to 20,000 from 57,000, reinforcing signs of a cooling employment environment.
Market expectations for a September rate hike have consequently weakened. Data from the CME FedWatch Tool shows traders now assign roughly a 46% chance of a 25-basis-point increase next month, compared with 67% a week ago. Attention is now shifting toward upcoming US inflation releases for further guidance on the Fed’s policy path.
Bond Market Reaction
Analysts at TD Securities noted that Treasury yields moved lower and the yield curve steepened following the disappointing payroll figures, even as the unemployment rate eased to 4.1%. The weaker employment data helped alleviate concerns that the labor market was reaccelerating, leading investors to scale back expectations for future rate increases. As a result, pricing for September tightening was reduced by around 3 basis points.
Barkin Signals Balanced but Cautious Outlook
Richmond Fed President Thomas Barkin struck a somewhat more cautious tone, emphasizing that current labor market conditions reflect a “low-hire, low-fire” environment. His remarks suggest employment remains weak but stable rather than deteriorating sharply, reducing the urgency for further policy tightening.
At the same time, Barkin highlighted the resilience of corporate earnings, noting that company profits remain strong and continue to grow. This could limit the scope for a more dovish Fed stance if labor market softness does not spread more broadly across the economy.
The FXS Fed Sentiment Index declined by 1.68 points to 137.01, indicating a moderation in perceived hawkishness. Nevertheless, the index remains well above the neutral 100 level, suggesting that overall Fed communication continues to lean toward maintaining a relatively restrictive monetary policy stance.
Bitcoin hovered above $65,000 on Monday, remaining slightly above its 50-day Exponential Moving Average (EMA) at $64,702.
The Bank of Japan signaled that further interest rate hikes could be on the table, according to the summary of opinions from its July policy meeting.
Pump.fun and CurveDAO led the crypto market gains over the past 24 hours, emerging as the strongest performers among major digital assets.
Crypto Market Overview: Bitcoin Holds Firm as BoJ Signals Potential Tightening
The broader cryptocurrency market remained stable on Monday, with Bitcoin (BTC) trading around $65,000 and holding above its 50-day Exponential Moving Average (EMA) at $64,702. Despite growing expectations of tighter monetary policy in Japan after the Bank of Japan’s latest policy discussion summary, market sentiment across digital assets stayed constructive. Among the strongest performers over the past 24 hours were Pump.fun (PUMP) and Curve DAO (CRV), both extending recent gains.
Bank of Japan Hints at Additional Rate Hikes
The Bank of Japan released the summary of opinions from its July policy meeting, revealing a more hawkish tone among policymakers. Four of the nine board members supported further rate increases, while three adopted a neutral stance and two remained dovish. The discussion comes as the Japanese Yen continues to trade near multi-decade lows against the US Dollar, increasing pressure on policymakers to normalize monetary policy more aggressively.
Bitcoin Technical Outlook
Bitcoin traded near $65,200 on Monday, maintaining support above its 50-day EMA at $64,702. However, the leading cryptocurrency remains below the 100-day EMA at $66,905 and the 200-day EMA at $72,686, suggesting that the broader trend has yet to fully turn bullish.
Technical indicators show improving momentum. The MACD has generated a bullish crossover above its signal line, while the Relative Strength Index (RSI) sits around 55, indicating moderate buying strength.
If buyers remain in control, the next key resistance levels are the 100-day EMA at $66,905 and the 200-day EMA near $72,686. A sustained breakout above these barriers could strengthen the bullish outlook. On the downside, the 50-day EMA at $64,702 remains the first important support level, with a daily close below it potentially triggering a deeper pullback.
PUMP Extends Breakout Rally
Pump.fun (PUMP) continued its upward trajectory on Monday after gaining roughly 11% on Sunday. The token remains in a bullish structure after breaking out of a falling wedge formation and is currently trading close to a six-month high.
Momentum indicators continue to favor the bulls. The RSI has climbed to 72, entering overbought territory, while the MACD remains firmly positive with expanding bullish histogram bars.
Should the rally continue, the next upside target is the December 2025 peak at $0.003399. Key support lies near $0.00251, corresponding to the reclaimed high from May 9.
CRV Targets Higher Levels
Curve DAO (CRV) advanced for a third consecutive session, approaching the $0.24 mark. The token remains above both its 50-day EMA at $0.2135 and 100-day EMA at $0.2214, supporting the near-term bullish outlook. Nevertheless, the 200-day EMA at $0.2683 continues to act as a major resistance level and keeps the longer-term trend cautious.
CRV is also trading above the 50% Fibonacci retracement level at $0.2232, calculated from the decline between $0.2931 and $0.1700. Immediate resistance is located near the 78.6% Fibonacci retracement at $0.2608, which aligns closely with the 200-day EMA. A breakout above this zone could open the door for a move toward $0.2931.
On the downside, the $0.2232 retracement level is reinforced by the 100-day EMA at $0.2214 and the 50-day EMA at $0.2135, creating a strong support area for the token.
Gold started the week on a weaker footing as escalating tensions in the Middle East boosted demand for the safe-haven U.S. dollar. Rising oil prices added to inflation concerns and reinforced expectations that the Federal Reserve could keep interest rates elevated, weighing on the non-yielding precious metal. Investors are now turning their attention to upcoming U.S. inflation data for further clues on the Fed’s policy outlook and the next direction for gold prices.
Gold (XAU/USD) opened the new week on a weaker note, pulling back from its highest level since June 17 reached after Friday’s softer-than-expected U.S. Nonfarm Payrolls report. The labor market data showed the U.S. economy unexpectedly shed 23,000 jobs in July, while June payroll growth was revised down to 20,000 from 57,000. The figures pointed to a cooling labor market, reducing expectations for additional Federal Reserve rate hikes and initially pressuring the U.S. dollar while supporting gold.
However, that boost proved temporary as renewed uncertainty surrounding the Middle East and the reopening of the Strait of Hormuz revived demand for the safe-haven dollar. Iran maintained that a full reopening of the strategic shipping route would require the end of U.S. naval restrictions, the removal of sanctions, and compensation for war-related losses. Tehran also rejected direct negotiations with Washington, arguing that the U.S. had breached the interim peace agreement reached in June. These developments have kept geopolitical risks elevated, helping the dollar recover and limiting gold’s upside.
At the same time, ongoing tensions between the U.S. and Iran have continued to support crude oil prices. Higher energy costs have raised concerns that inflation could reaccelerate, potentially prompting major central banks to maintain a more hawkish policy stance. Market pricing reflected by CME FedWatch data still suggests investors see a meaningful possibility of another Fed rate increase before year-end. Expectations of higher borrowing costs and elevated U.S. Treasury yields have strengthened the dollar and created additional headwinds for gold. Investors are now awaiting this week’s U.S. inflation reports for fresh signals on the Fed’s next policy move and the direction of bullion prices.
Technical Analysis
Gold’s breakout above the 38.2% Fibonacci retracement level of the April-to-June decline on Friday remains a positive signal for bulls. This key support area is located just above the $4,300 level, making it an important zone to watch. A sustained move below this threshold could trigger additional selling pressure and expose the precious metal to deeper losses.
Despite the recent rebound, caution is still warranted. XAU/USD continues to trade beneath both the 50% Fibonacci retracement level and the closely watched 200-day Simple Moving Average (SMA), indicating that the broader bearish structure has not been fully reversed. As a result, while momentum has improved in the near term, confirmation of a stronger upward trend may require a decisive break above these key technical barriers.
Yen struggles to hold intervention gains as dollar hovers near six-week lows
Currency markets traded cautiously on Thursday, with the Japanese yen giving up part of its recent intervention-driven rally and the U.S. dollar remaining close to a six-week low. Investor sentiment was restrained by uncertainty surrounding a proposed U.S.-Iran agreement and anticipation ahead of key U.S. payrolls data.
The yen was little changed at 157.71 per dollar in early trading after posting losses in the previous two sessions. Although it has retreated from Monday’s peak of 155.20, reached following suspected intervention, the currency remains well above last month’s multi-decade low near 164 per dollar.
Elsewhere, major currencies showed limited movement. The euro held steady at $1.1557, while sterling traded flat at $1.3469. The Australian and New Zealand dollars were also largely unchanged at $0.7056 and $0.5885, respectively.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was steady at 99.65, lingering near its weakest level in six weeks as traders awaited fresh catalysts.
Market participants continued to monitor developments in the Middle East after reports emerged of a proposed agreement involving Iran and Oman aimed at resolving the U.S.-Iran conflict. According to Reuters, the proposal could grant Tehran authority over inbound shipping traffic through the Strait of Hormuz.
Washington has yet to comment officially on the reported plan. While President Donald Trump recently suggested an agreement to reopen the strategic waterway was close, U.S. officials have consistently maintained that they would not support any arrangement giving Iran control over access to the critical energy shipping route.
Oil markets reacted modestly, with Brent crude futures slipping 0.5% to $79.08 per barrel, hovering near levels seen following the interim peace accord between the United States and Iran in June.
Markets adopt wait-and-see approach as central banks and payrolls take center stage
Investors remained cautious, with markets largely in a holding pattern as traders assessed geopolitical developments and awaited fresh economic signals. According to Ray Attrill, Head of FX Strategy at National Australia Bank, the recent calm in oil markets has removed one of the key drivers that had been influencing asset prices in recent weeks.
Attrill noted that market participants are closely watching whether a U.S.-Iran agreement materializes, with uncertainty over the outcome keeping trading activity subdued.
BOJ minutes strengthen case for further tightening
Attention also turned to Japan after minutes from the Bank of Japan’s June policy meeting revealed policymakers discussed rising inflation risks that could warrant additional interest-rate increases, even as they lifted borrowing costs to their highest level in 31 years.
The discussion underscores growing concern within the BOJ about broader price pressures and reinforces expectations that another rate hike could come as early as September.
Although the yen surged as much as 5% against the dollar following intervention efforts by Tokyo and coordinated measures with Washington, the currency has struggled to maintain those gains.
A recent Reuters survey highlighted skepticism over the effectiveness of intervention alone, with nearly 95% of respondents saying currency market operations would not provide a lasting solution to yen weakness. Most respondents argued that further BOJ rate hikes would be necessary to support the currency over the longer term.
U.S. payrolls report expected to shape Fed outlook
Investors are now focused on Friday’s U.S. nonfarm payrolls report for further guidance on the Federal Reserve’s policy trajectory.
Recent data showed the U.S. services sector remained resilient in July despite rising input costs, though employment growth within the sector slowed. Economists surveyed by Reuters expect the upcoming report to show payrolls increased by 80,000 jobs in July, following a gain of 57,000 in June, while the unemployment rate is projected to remain unchanged at 4.2%.
Adding to market uncertainty, Federal Reserve Governor Lisa Cook indicated on Wednesday that she remains open to the possibility of additional rate hikes if inflation proves persistently elevated, signaling that policymakers are not yet ruling out further tightening despite signs of moderating labor-market momentum.
Optimism surrounding a potential US-Iran agreement has weighed on oil prices, helping ease concerns about inflation.
US equities have climbed to fresh record highs, but the still-weak correlation between BTC and the S&P 500 has limited Bitcoin’s upside momentum.
Continued net inflows into spot Bitcoin ETFs are providing additional support for the cryptocurrency.
Technical outlook: Bitcoin maintains a constructive bias while holding above key support levels, with traders watching for a breakout that could trigger the next leg higher.
Bitcoin remains comfortably above the $64,000 mark, supported by growing optimism over potential U.S.-Iran peace talks and renewed inflows into spot Bitcoin ETFs. Despite these tailwinds, BTC has gained only about 0.7% over the past 24 hours, lagging the broader rally in risk assets.
Market sentiment improved as hopes increased that the U.S. and Iran could reach an agreement to reopen the Strait of Hormuz. Oil prices have fallen for a third consecutive session and are down roughly 10% this week. U.S. Treasury Secretary Scott Bessent indicated that an agreement to restore shipping through the strategic waterway could be reached within days.
The decline in oil prices has helped ease inflation concerns, pushing Treasury yields lower. If the trend persists, investors may further reduce expectations for a more hawkish Federal Reserve stance.
Markets are currently assigning a 59% probability to a Fed rate hike in September, down from 65% a day earlier. The shift in rate expectations has also weighed on the U.S. dollar, creating a more favorable backdrop for Bitcoin and other risk-sensitive assets.
Meanwhile, optimism surrounding a potential Middle East agreement and renewed enthusiasm for AI-related investments have driven U.S. equities to fresh highs, with both the S&P 500 and Dow Jones reaching record levels.
Bitcoin, however, has not mirrored the strength seen in stocks. A relatively weak 30-day correlation between BTC and the S&P 500 helps explain the divergence, suggesting that broader risk-on sentiment alone may not be enough to fuel a major breakout. Instead, Bitcoin may require a crypto-specific catalyst to generate stronger upside momentum.
Institutional Demand Continues to Support Bitcoin
Institutional interest in Bitcoin is showing encouraging signs. Data from SoSoValue revealed that spot Bitcoin ETFs attracted $211.5 million in net inflows on Tuesday, following another strong session that saw $170.1 million in net inflows the day before.
If ETF demand remains robust and Bitcoin begins to strengthen its positive correlation with equity markets, these flows could provide additional support for higher prices. On the other hand, if institutional participation fails to accelerate meaningfully, BTC may continue to underperform despite the broader rally across risk assets.
Looking ahead, market focus is shifting toward upcoming U.S. economic data. Investors will closely monitor the ISM Services PMI release, followed by Friday’s nonfarm payrolls report, both of which could offer important clues about the Federal Reserve’s next move on interest rates and influence Bitcoin’s near-term direction.
Bitcoin has pushed back above the $64,000 level, but the broader technical picture remains slightly bearish. The price continues to trade below the 50-day EMA near $64,600, as well as the 100-day and 200-day EMAs, indicating that the recent advance may still be a corrective rebound within a larger downtrend. Meanwhile, the RSI remains near neutral territory, highlighting a lack of strong bullish or bearish momentum.
On the downside, failure to regain the 50-day EMA could trigger a retest of support around $62,500, which marks both the weekly low and the mid-July trough. A move below this level would bring the psychologically important $60,000 threshold into focus, followed by the 2026 low near $57,700. A break beneath $57,700 would confirm a lower low, increasing the risk of a deeper decline toward $55,000 and potentially $50,000, levels not seen since 2024.
For the bullish outlook to strengthen, Bitcoin must first reclaim the 50-day EMA at $64,600 and then break above the July peak near $67,000. Such a move would establish a higher high and could pave the way for a test of the 200-day EMA, currently located around $72,500.
WTI crude has experienced a significant pullback, sliding from above $92 a barrel in late July to below $76. Despite the sharp retreat, the futures curve has yet to signal a complete bearish reversal, as strong backwardation persists, indicating that supply-related risks are still being priced into the market.
At the same time, US market fundamentals remain uneven rather than outright weak. Conflicting trends in demand and inventory data continue to paint a mixed picture, limiting conviction behind a sustained bearish outlook.
For now, the most probable outcome is continued volatility within a $77–$88 trading range. A lasting improvement in shipping conditions and smoother supply flows could drag WTI toward the $68–$75 zone. On the other hand, fresh disruptions to global energy transport routes or supply chains could revive bullish sentiment and drive prices back toward the $92–$105 range.
American benchmark crude prices have dropped sharply as renewed optimism over a potential US-Iran agreement reduced geopolitical risk premiums. However, a strongly backwardated futures curve, tight inventories at Cushing, and subdued speculative positioning suggest the recent sell-off may be overextended.
WTI has weakened after Washington paused additional military action and discussions on shipping security resumed. Even so, both physical and derivatives markets continue to signal supply tightness, leaving the market exposed to another sharp rebound.
WTI’s decline looks more like a correction than a full normalization
WTI fell below $76 per barrel on Tuesday, marking a nearly 20% decline from its late-July peak above $92. The move followed repeated swings in sentiment driven by reports of progress and setbacks in negotiations involving the US and Iran.
While the retreat reflects a reduction in geopolitical risk premiums, it does not necessarily indicate that the underlying supply disruptions have been resolved. Markets have repeatedly priced in expectations of a settlement, only to see tensions, attacks, or shipping restrictions re-emerge.
Until tanker movements, insurance availability, and export flows improve consistently over an extended period, political statements alone are unlikely to confirm a lasting normalization.
The futures curve suggests caution toward the sell-off
The WTI futures curve remained deeply backwardated in late July. The front-month contract traded at $85.27, compared with $82.25 for the second-month contract and $70.41 for the twelfth-month contract. This left the M1–M2 spread at $3.02 per barrel and the M1–M12 spread close to $15.
Such pronounced backwardation indicates that buyers continue to pay a significant premium for immediate supply relative to oil delivered further into the future. Although part of that premium reflects geopolitical uncertainty, the curve’s shape does not align with expectations of an imminent supply surplus. It also provides positive roll yield for long positions, which could help prevent bearish momentum from becoming entrenched.
As a result, the curve points to a two-track outlook: near-term prices remain highly sensitive to developments in US-Iran relations, while longer-dated contracts are already pricing in a gradual return to more normal market conditions.
EIA data suggest limited inventory cushions rather than a true supply shortage
According to the latest EIA report, US commercial crude inventories increased by 2 million barrels to 411.7 million barrels in the week ending July 17. Despite the build, stockpiles remained about 6% below the five-year seasonal average. Meanwhile, inventories at Cushing, Oklahoma, declined by 674,000 barrels to 19.4 million barrels, leaving them more than 10 million barrels below the five-year norm.
Refined product inventories also remained relatively tight. Gasoline stocks were 7% below their five-year average, while distillate inventories were 10% below average, even after registering weekly increases. Refinery utilization stayed elevated at 96.1%, and total petroleum demand rebounded by just over 1 million barrels per day from the previous week.
The data do not present a uniformly bullish picture, as crude oil, gasoline, and distillate inventories all posted gains during the reporting period. However, inventory buffers remain thin in absolute terms, particularly at Cushing. As a result, any renewed supply disruption could have a more immediate impact on prompt crude prices than it would in a market with more comfortable stock levels.
US shale production is responding slowly, not flooding the market
US crude output fell by 63,000 barrels per day to 13.798 million barrels per day in the week ending July 17. Meanwhile, Baker Hughes reported 450 active oil rigs on July 24, down two from the previous week but still up ten from a month earlier and 38 above the same period in 2025.
The signal from shale activity remains mixed. Drilling has not deteriorated significantly, yet the latest decline in production does not point to an imminent surge in supply capable of offsetting a renewed disruption in Gulf energy flows. Moreover, changes in rig activity typically influence production with a considerable lag, making rig counts more relevant to the medium-term outlook than to short-term supply risks.
CFTC positioning indicates potential for another sharp market move
Data from the Commodity Futures Trading Commission (CFTC) showed that non-commercial net long positions in WTI increased by nearly 38,500 contracts to roughly 120,100 contracts in the week ending July 28. The recovery was driven largely by short covering, with speculative short positions falling by about 33,600 contracts, while long positions increased by only around 4,800 contracts.
Despite the rebound, speculative positioning remains relatively light by historical standards. Net long exposure sits near the 11th percentile of the past three years, while overall speculative exposure, at roughly 6.5%, is around the 13th percentile. In other words, traders are no longer heavily positioned for a major collapse in prices, but bullish positioning is far from crowded.
This leaves room for significant volatility in either direction. A credible and lasting peace agreement could spark another wave of selling, while a renewed breakdown in negotiations could trigger both fresh short covering and new long buying, potentially accelerating any upside move in WTI prices.
WTI outlook: $77–$88 remains the most plausible near-term trading range
Current market conditions support a range-bound outlook rather than a firm directional target. Geopolitical developments continue to dominate short-term price action, with headlines surrounding US-Iran negotiations capable of moving front-month WTI contracts by several dollars before changes in inventories or production data have a meaningful impact.
At the same time, the structure of the futures curve argues against interpreting every positive diplomatic development as evidence of a lasting supply surplus. Deep backwardation continues to signal tight near-term market conditions and ongoing concerns about physical availability.
As a result, the most credible base-case scenario remains a trading range between $77 and $88 per barrel. A sustained improvement in shipping security, export flows, and regional stability could eventually push prices lower toward the $68–$75 area. However, until such normalization is clearly reflected in physical market indicators, downside potential may remain limited.
Conversely, any renewed escalation in geopolitical tensions, shipping disruptions, or supply-chain interruptions could quickly revive the risk premium, potentially triggering a sharp rebound in WTI as traders reprice near-term supply risks. The combination of tight inventories, pronounced backwardation, and relatively light speculative positioning means the market remains vulnerable to significant upside volatility despite the recent correction.
Bottom line
WTI prices around $80 per barrel no longer reflect the extreme risk premium that dominated the market during the most recent geopolitical escalation. However, market conditions are still far from fully normalized. Deep backwardation in the futures curve, low inventory levels at Cushing, and relatively light speculative positioning all indicate that downside moves driven by positive peace developments may be more gradual than any upside reaction triggered by renewed supply disruptions.
For the time being, the most likely scenario remains a volatile trading range between $77 and $88 per barrel. A sustained move below that band would likely require clear and verifiable evidence that Gulf shipping routes, insurance conditions, and export flows have returned to normal. Conversely, a breakout above the range would become increasingly probable if negotiations break down and physical supply conditions deteriorate once again.
In short, while geopolitical risk premiums have eased, the underlying market structure continues to reflect supply tightness, leaving WTI vulnerable to sharp upward repricing should disruptions re-emerge.
Second-quarter earnings season continues to deliver strong results, with 71% of S&P 500 companies having reported so far. Revenues are exceeding analyst expectations by 3.8% on average, while earnings are outperforming forecasts by 7.3%. Revenue beats have been recorded by 77% of companies, while 83% have surpassed earnings estimates. Notably, this marks the twelfth consecutive quarter in which earnings growth has outpaced revenue growth, highlighting ongoing profit margin expansion.
The outlook for August appears increasingly constructive. A combination of exhausted mean-reversion trading strategies, the collapse of the Situational Awareness hedge fund, and aggressive short-selling activity that fueled negative market narratives has left the market deeply oversold and potentially primed for a strong rebound. Adding to the bullish case, FactSet projects S&P 500 second-quarter earnings growth of 47.4%.
Looking ahead, the Atlanta Fed’s GDP Now model currently estimates third-quarter annualized GDP growth at 5.9%, exceeding the 5% pace forecast earlier this year. However, investors should note that the Atlanta Fed’s estimates often begin at elevated levels before being revised lower as additional economic data becomes available. Second-quarter GDP growth faced pressure from heavy technology imports from Asia, a trend likely to persist as AI-related demand continues to accelerate.
Economic activity also appears to be gaining momentum. The Institute for Supply Management (ISM) reported that its manufacturing index climbed to 55.6% in July from 53.3% in June, marking the seventh consecutive monthly increase and the strongest reading since May 2022. New orders improved to 56.7%, production jumped sharply to 58.5%, and order backlogs rose to 55%. Broad-based strength was evident, with 15 of the 16 manufacturing industries surveyed reporting expansion during the month.
On the labor front, ADP reported that private-sector employers added just 44,000 jobs in July, falling short of the 65,000 jobs economists had expected. The weakest areas included leisure and hospitality, which shed 11,000 jobs, and trade, transportation, and utilities, which lost 8,000 positions. While seasonal factors may have weighed on the report, the softer-than-expected data has prompted economists to lower expectations for the upcoming nonfarm payrolls release.
Silver advanced as lower oil prices followed a partial agreement on the Strait of Hormuz, helping to ease inflationary pressures. Softer-than-expected US ADP private employment data further boosted precious metals, reinforcing expectations of a more accommodative interest-rate outlook. Meanwhile, a positive 14-day RSI and a supportive Fed Sentiment Index continued to indicate solid and sustained bullish momentum for silver.
Silver (XAG/USD) extended its rally for a fourth straight session, trading near $62.20 per troy ounce during Thursday’s Asian session. The precious metal continued to benefit from improving market sentiment after an agreement to partially restore shipping through the Strait of Hormuz helped drive oil prices lower, easing concerns about inflationary pressures and the future path of interest rates.
The development follows a deal between Iran and Oman to establish a temporary maritime corridor through the key energy route, raising expectations for stronger Middle Eastern oil exports. A joint statement outlining the arrangement is reportedly nearing completion. Although the shipping channel is expected to remain operational for two to four months, Iranian officials emphasized that the measure should not be viewed as a full reopening of the Strait of Hormuz.
Oil market structure points to speculation-driven moves
Analysts at TD Securities argue that recent swings in oil prices appear to be driven more by speculative positioning than by any meaningful change in supply-demand fundamentals. They note that oil timespreads have remained relatively strong, indicating that traders reacting to headlines are largely behind the recent volatility rather than a loosening of physical market conditions. According to the firm, robust timespreads continue to signal a fundamentally tight crude market despite heightened geopolitical risks and speculative trading activity.
At the same time, weaker US labor market data added another layer of support for precious metals. ADP data released Wednesday showed private-sector employment increased by only 44,000 jobs in July, down sharply from 98,000 in June and below expectations of 70,000. Investors are now turning their attention to upcoming US labor indicators, including Thursday’s Initial Jobless Claims and Friday’s Nonfarm Payrolls report, for further clues on the economic outlook and Federal Reserve policy direction.
Fed’s Cook highlights inflation risks while leaving door open for future rate hikes
Federal Reserve Governor Lisa Cook delivered remarks that carried a moderately hawkish tone, earning a score of 7.2/10 on the FXS Speechtracker, slightly above the historical average of 6.5/10. Her comments acknowledged the resilience of the US economy and labor market but emphasized that inflation risks remain a greater concern than employment weakness. Cook reiterated the Fed’s commitment to restoring price stability while stressing that additional rate hikes would only be considered if progress on disinflation stalls.
The speech was generally supportive of the US Dollar and reflected a cautious stance toward risk-sensitive assets. However, it stopped short of signaling any immediate tightening measures, leaving policymakers data-dependent.
Meanwhile, the FXS Fed Sentiment Index slipped 1.93 points to 140.92, suggesting a modest reduction in perceived hawkishness after the speech. Even so, the index remains comfortably above the neutral 100 level, indicating that overall Fed communication continues to lean firmly toward a restrictive policy stance despite the slight easing in tightening expectations.
Silver (XAG/USD) trades near $62.20 and continues to display a constructive near-term outlook. The metal remains above its nine-day Exponential Moving Average (EMA) at $59.76, reflecting ongoing bullish momentum, although the 50-day EMA at $62.69 continues to act as immediate resistance. The 14-day Relative Strength Index (RSI) stands at 56.81, reinforcing the view that buying pressure remains intact without entering overbought territory.
A decisive daily close above the 50-day EMA at $62.69 could strengthen bullish momentum and pave the way for a move toward the next major resistance zones at $90.03 and $96.62, although those targets remain considerably higher than current market levels. On the downside, initial support is located at the nine-day EMA of $59.76, followed by a stronger support area around $55.63. Overall, the technical backdrop remains tilted to the upside as long as Silver holds above its short-term moving average.
Bitcoin traded sideways even as equities pushed to fresh record highs, underscoring its lack of correlation with the broader rally across global markets.
Despite stocks climbing to new highs, Bitcoin remained largely range-bound, highlighting its divergence from the strength seen in traditional financial markets.
Bitcoin showed little movement while global equities extended their gains, reflecting a continued disconnect from wider market optimism.
Bitcoin (BTC) traded in a narrow range as equities continued to climb and gold pulled back, indicating a market caught between fading institutional participation and mounting signs that selling pressure may be running out, according to a Glassnode report released Wednesday.
The report noted that Bitcoin’s muted price action contrasted sharply with the broader financial landscape, where major stock indexes pushed to fresh record highs while other asset classes remained active.
“Virtually every major asset has moved—except Bitcoin,” Glassnode observed, highlighting the cryptocurrency’s growing disconnect from the momentum driving global markets.
Bitcoin Shrugs Off Coldcard Wallet Theft
The report analyzed how the market reacted to the compromise of several self-custodied Coldcard hardware wallets. Although the incident sparked a surge in on-chain activity, it had virtually no effect on Bitcoin’s price.
In the three days following the theft, the volume of Bitcoin that had been inactive for at least a year surged to roughly 119,000 BTC—about 200 times the amount stolen—as users transferred funds to new wallets as a precautionary measure.
Despite the heightened activity, only around 10% of those coins were sent to exchanges, while the pace of new wallet creation normalized within days. Meanwhile, the amount of Bitcoin held in wallets less than one month old continued to increase, suggesting investors were relocating assets into new cold-storage addresses rather than preparing to sell.
According to Glassnode, the largest forced movement of long-dormant Bitcoin during the current market cycle generated virtually no selling pressure and failed to trigger any meaningful price reaction.
Bitcoin Shows Bottoming Signals but Demand Remains Weak
The report also highlighted that Bitcoin is beginning to exhibit traits commonly associated with market bottoms, though the current setup differs from previous cycles. Instead of being driven by panic selling, the signals are emerging from an extended period of market stagnation.
Historically, major bottoms have been accompanied by steep declines and sharp spikes in volatility. In contrast, the current cycle has seen profitability gradually erode during months of sideways price action, while volatility has remained exceptionally subdued.
Glassnode noted that its Seller Exhaustion Constant has dropped to the lowest level of the current cycle, entering a zone that has historically coincided with market bottoms. However, the metric remains roughly one-third above the levels recorded during prior bear-market troughs, suggesting that while seller fatigue is increasing, conditions have not yet fully matched those seen at previous cycle lows.
Institutional Demand Still Missing as a Key Catalyst
Glassnode also pointed to persistent weakness in institutional participation, noting that major sources of demand have provided little support for Bitcoin in recent months. According to the report, US spot Bitcoin ETFs and corporate treasury buyers have not generated enough buying pressure to sustain the market’s recovery.
June saw approximately 65,800 BTC in net outflows from spot Bitcoin ETFs—the largest monthly withdrawal on record—while purchases by corporate treasuries failed to fully offset those redemptions.
As Glassnode noted, any eventual market bottom may need to develop without the steady institutional buying that underpinned Bitcoin’s performance over the past two years, at least until that demand returns.
Despite the lack of strong buying interest, options markets remain remarkably subdued. Implied volatility for bullish price moves has fallen to an all-time low, while downside volatility remains near typical levels, suggesting traders are assigning relatively low probabilities to both significant rallies and sharp declines.
Historically, periods of extremely compressed volatility have often preceded major breakouts. However, Glassnode cautioned that the current market environment lacks the robust demand backdrop that supported previous recoveries, making a sustained rebound less certain.
At the time of writing, Bitcoin was trading around $64,900, up roughly 1% over the previous 24 hours.
The Japanese Yen retreats against the US Dollar as traders question the sustainability of the currency’s recent rally.
The Yen’s earlier gains were largely supported by coordinated intervention from Japanese and US authorities.
Market participants are now turning their attention to the US ADP Employment Change report and July’s Nonfarm Payrolls (NFP) data for fresh clues on the Federal Reserve’s policy outlook.
The Japanese Yen (JPY) surrenders its earlier gains and trades little changed near 157.70 against the US Dollar (USD) during Wednesday’s European session. The USD/JPY pair rebounds as confidence in the Yen’s recent rally begins to fade, prompting investors to question whether the currency can sustain its strength.
The Yen had outperformed in recent sessions after coordinated intervention by the United States (US) and Japan aimed at curbing what Japan’s Ministry of Finance (MoF) described as “excessive volatility and disorderly movements” in the currency market.
However, many analysts argue that the Yen’s recovery is likely to be temporary unless it is supported by stronger underlying economic fundamentals.
Analysts say intervention offers only temporary relief
Strategists at MUFG believe official intervention will remain relatively limited in scale, noting that while coordinated action between the US and Japan could provide near-term support for the Yen, it is unlikely to reverse the broader weakening trend on its own. They argue that lasting appreciation will require a meaningful shift in economic fundamentals, rather than relying solely on market intervention.
TD Securities shares a similar assessment, describing the latest intervention as an effort by Japanese authorities to buy time while fiscal policies work to boost demand for Yen-denominated assets. The firm suggests the strategy also depends on a weaker US Dollar, potentially driven by softer US economic data or another bearish catalyst. However, TD warns that unless the Bank of Japan (BoJ) accelerates its tightening cycle with a series of rate hikes toward 2%, the longer-term outlook still favors a renewed rise in USD/JPY. The brokerage highlights the wide interest rate gap, with Japan’s one-year, one-year overnight index swap (OIS) rate near 1.9% compared with 4.1% in the US.
Meanwhile, the US Dollar edges slightly lower as traders await the release of the US ADP Employment Change report for July at 12:15 GMT.
Economists at Deutsche Bank forecast private-sector payrolls to increase by 65,000, improving from June’s reading of 49,000.
The ADP report is expected to influence expectations for the Federal Reserve’s (Fed) policy path ahead of Friday’s closely watched US Nonfarm Payrolls (NFP) report for July, which could provide fresh guidance on the outlook for interest rates.
Dow Jones futures edged higher after reports of a temporary US-Iran agreement fueled optimism across financial markets. US stocks ended Tuesday in positive territory, with the Dow Jones Industrial Average rising 1.71% and the Nasdaq 100 surging 2.59%. Investors are now turning their attention to upcoming earnings reports from Eli Lilly, AppLovin, Walt Disney, Uber, and SanDisk.
US stock futures traded modestly higher during Wednesday’s European session, with Dow Jones futures rising 0.23% to around 54,390. S&P 500 futures added 0.34% to roughly 7,790, while Nasdaq 100 futures edged up 0.14% to near 29,900. Investors are now focused on another busy day of corporate earnings, with major reports expected from Walt Disney, Uber, and SanDisk, which may influence market direction.
Investor sentiment improved after reports suggested progress toward an interim agreement involving the United States, Iran, and Oman to reopen the Strait of Hormuz. Axios reported that US officials are targeting an announcement as early as Wednesday, with the proposed 60-day arrangement designed to restore navigation through the strategic waterway, which carries nearly one-fifth of global energy shipments. The temporary framework could be extended if negotiations continue to advance.
The upbeat geopolitical developments followed a strong rally on Wall Street in the previous session. The Dow Jones Industrial Average and S&P 500 gained 1.71% and 1.79%, respectively, both finishing at fresh record highs. The Nasdaq Composite outperformed with a 2.59% advance, supported by stronger-than-expected corporate earnings and optimism that a Hormuz agreement is close.
Meanwhile, AI-related stocks continued their recovery, led by semiconductor companies. Deutsche Bank noted that the Philadelphia Semiconductor Index climbed 6.55% on Tuesday—its strongest daily performance since March—bringing its cumulative gain since last Wednesday to 16.58%, marking the index’s largest four-day rally since 2020. The bank said the sharp rebound in chip stocks signals renewed strength in the AI sector after its recent pullback.
Gold (XAU/USD) builds on the previous day’s momentum, extending its rally for a second consecutive session to reach a near two-week high around $4,141 during Wednesday’s Asian trading.
Fundamental Analysis
Optimism over a diplomatic breakthrough in the five-month US-Iran conflict continues to support market sentiment, despite lingering uncertainty. US Treasury Secretary Scott Bessent said Washington could finalize an agreement with Tehran as early as Wednesday to reopen the Strait of Hormuz and ease tensions. Separately, Axios reported, citing sources, that the US, Iran, and Oman are close to reaching an interim deal to restore access to the key shipping route. Meanwhile, OPEC+’s decision to raise oil production starting in September has eased supply concerns, sending crude prices to their lowest level since June 13. Softer oil prices have reduced inflation fears and weakened expectations for aggressive Federal Reserve tightening, weighing on the US Dollar while boosting demand for non-yielding Gold.
Even so, markets continue to expect the Fed could still raise interest rates before year-end as the US labor market shows signs of resilience. Tuesday’s JOLTS report revealed job openings slipped slightly to 7.36 million but remained above year-ago levels, indicating underlying labor market strength. Additionally, Kansas City Fed President Jeff Schmid and Philadelphia Fed President Anna Paulson reiterated support for keeping monetary policy restrictive to contain inflation. Their comments may limit further downside in the US Dollar ahead of Friday’s closely watched Nonfarm Payrolls (NFP) report.
Before then, investors will focus on Wednesday’s US economic releases, including the ADP private employment report and the ISM Services PMI, for fresh clues on the economy and the Fed’s policy path. At the same time, any new developments surrounding the Middle East conflict could influence both the US Dollar and Gold. Overall, the current fundamental backdrop continues to favor Gold, leaving XAU/USD well-positioned for additional near-term gains.
Technical Analysis
From a technical standpoint, Gold’s decisive move above the 200-period Exponential Moving Average (EMA) on the four-hour chart reinforces the bullish outlook. Momentum indicators continue to favor buyers, with the Relative Strength Index (RSI) holding near 65, reflecting solid upside momentum, while the Moving Average Convergence Divergence (MACD) histogram remains in positive territory, suggesting bullish control remains intact in the near term.
That said, the rally may begin to encounter resistance above the $4,130 region, as increasingly stretched momentum indicators could limit further upside if buying pressure starts to ease. On the downside, initial support is located around the 200-period EMA near $4,115. A sustained break below this level could trigger a deeper pullback toward the daily low around $4,065, followed by the $4,043–$4,042 support zone, the $4,020 level, and ultimately the key psychological threshold at $4,000.
Crypto Regulation Could Enter a New Era as the CLARITY Act Faces a Crucial Senate Decision
The rules governing the crypto industry could be rewritten within days. The CLARITY Act, a more than 600-page bill designed to define which US regulators oversee different types of digital assets, is approaching a critical Senate deadline on August 7. As investors wait for clarity, Bitcoin continues to trade within a narrow range amid uncertainty. Here’s a straightforward breakdown of what the legislation proposes and what it could mean for crypto holders.
The CLARITY Act represents one of the most ambitious crypto market-structure proposals in US history and is now approaching a decisive stage.
The Senate is expected to remain in session only through August 7, yet no official floor vote had been scheduled as of August 3. This leaves lawmakers with only a limited window to determine the bill’s future. The House passed its version in July 2025 with bipartisan backing, while a consolidated Senate draft was introduced in late July.
However, the path to approval remains challenging. The bill needs 60 votes to overcome a potential filibuster, while Republicans control approximately 53 Senate seats, making support from Democratic lawmakers critical.
Current prediction markets estimate only about a 26% probability that the legislation becomes law in 2026. If the Senate window closes without action, the next meaningful opportunity may not arrive until after the midterm elections, potentially extending regulatory uncertainty for the crypto market for another year or longer.
What the CLARITY Act Actually Changes
At its heart, the CLARITY Act attempts to answer the biggest unresolved question in crypto for the past decade: which regulator is responsible for overseeing which digital assets?
For years, the SEC has argued that most tokens should be treated as unregistered securities, while the CFTC has maintained that many cryptocurrencies function more like commodities but lacked the authority to regulate spot markets. This uncertainty left crypto projects unsure about compliance requirements, exchanges unclear about which assets they could list, and investors uncertain about regulatory protections.
The bill aims to resolve this confusion through several key provisions:
Clear division of authority between the SEC and CFTC
The legislation creates a defined framework for determining regulatory responsibility. If a token’s value relies heavily on the efforts of a central organization or development team, it would be classified as a security under SEC oversight. If a blockchain network becomes sufficiently decentralized, the asset could be designated as a “digital commodity” regulated by the CFTC, which would receive expanded authority over spot crypto markets.
A “maturity” pathway for tokens
The bill introduces a framework allowing tokens to transition from securities into digital commodities as networks become more decentralized. Initially, tokens are treated as securities while founders maintain significant control. Once governance becomes distributed — such as no single entity controlling a disproportionate share of tokens or decision-making power — the asset can potentially “graduate” into a digital commodity.
This creates a clearer compliance roadmap: centralized projects fall under SEC rules, while decentralized networks move toward CFTC oversight.
Crypto exchanges face stricter regulatory standards
Digital commodity trading platforms would be required to register with the CFTC and follow standards similar to traditional financial institutions, including capital requirements, risk management procedures, and market monitoring systems.
In exchange, compliant platforms would gain greater legal certainty and the ability to serve US customers without constant concern over sudden regulatory action.
Greater protection for customer assets
The bill addresses one of the biggest lessons from previous crypto exchange failures: customer funds being misused by platforms.
Under the proposed rules, customer assets must be held by qualified custodians. Platforms would need explicit user approval before using assets for activities such as staking. If an exchange becomes insolvent, properly custodied customer assets would remain the property of users rather than becoming part of the company’s bankruptcy estate.
Token fundraising gets clearer rules — with more transparency
Crypto projects would receive a more straightforward path to raising capital, but they would also face stronger disclosure obligations.
Instead of relying only on marketing materials or investor presentations, projects would need to provide ongoing information about:
Token utility and functionality
Team token ownership
Insider selling activity
Potential software and security risks
Token economics and distribution structure
Protection for self-custody and blockchain developers
The legislation protects individuals’ ability to hold digital assets in personal wallets. It also clarifies that simply developing open-source blockchain software or operating a node does not automatically make someone a regulated financial intermediary.
This removes a major area of uncertainty that has affected developers for years.
DeFi regulation focuses on actual control, not labels
The bill evaluates decentralized finance projects based on one key question: who controls the system?
Protocols powered by immutable, open-source code with no centralized control would receive greater legal protection. However, projects claiming to be decentralized while retaining administrative control — such as the ability to freeze funds or modify rules — could still be treated as centralized financial platforms and face full compliance requirements.
Stronger anti-money-laundering and consumer protections
The legislation also expands safeguards against illicit finance. The updated version includes more than 16 provisions covering areas such as:
Anti-money-laundering requirements
Know-your-customer (KYC) procedures
Transaction monitoring
Restrictions on stablecoin platforms paying fixed deposit-like returns
However, legitimate yield mechanisms linked to real economic activity, such as staking rewards, would remain permitted.
What the CLARITY Act Could Mean for the Crypto Market
Bitcoin appears to be one of the clearest beneficiaries of the proposed framework. Since it operates without a central controlling entity, it naturally fits the definition of a digital commodity. In addition, stronger asset-segregation requirements could lower counterparty risks for investors who hold crypto through centralized platforms.
Large blockchain networks with widespread adoption and decentralized governance, including Ethereum and Solana, are also positioned favorably. Their potential classification as digital commodities could remove regulatory uncertainty and make them more attractive to institutional investors that have previously stayed on the sidelines.
However, newer blockchain projects with concentrated ownership structures may face a longer path. Until they achieve greater decentralization, they would likely remain under SEC oversight, increasing compliance costs and creating additional challenges for exchange listings.
Altcoins face a market-wide selection process
Smaller cryptocurrency projects could experience a significant divide. Projects that embrace transparency and meet disclosure requirements may gain a clearer route into US markets, while tokens with limited transparency, centralized control, or concentrated ownership could struggle to secure listings on major exchanges.
The result is likely to be a more selective market rather than a broad benefit for all cryptocurrencies.
Stablecoins move closer to regulated financial products
Stablecoins would increasingly resemble regulated payment infrastructure under the proposed rules. Key requirements could include:
Full reserve backing
Regular financial attestations
Clear redemption rights for users
Restrictions on passive yield programs may force platforms to redesign stablecoin offerings. However, returns generated through genuine economic activities — such as staking or liquidity provision — would likely remain allowed.
Exchanges and brokers face higher compliance demands
Crypto trading platforms would experience some of the biggest operational changes. They would need to meet requirements related to:
Regulatory registration
Customer asset segregation
Market surveillance systems
Risk management procedures
While implementation could increase costs, exchanges would gain something the industry has long sought: a clearer legal framework and the ability to operate with greater certainty.
Potential Winners Under the CLARITY Act
The market is already reacting to the possibility of regulatory change. Bitcoin has been trading within a narrow range around $62,000–$64,000 as investors await the Senate’s decision. A clear outcome — either approval or failure — could become a catalyst for the next major market direction.
However, the broader significance extends beyond a single legislative vote. Current crypto regulations rely heavily on agency interpretations and enforcement approaches, which can change under different administrations. A federal law would provide a more permanent foundation.
The key developments to monitor are a potential Senate vote schedule or a cloture motion before August 7. Regardless of the immediate outcome, the regulatory framework outlined in the CLARITY Act could become the blueprint that shapes how the crypto market evolves going forward.
Wall Street started the new month on a strong note as improving geopolitical conditions and a steep decline in crude oil prices boosted investor sentiment. The S&P 500 gained 1.5%, closing near its all-time high, while the Nasdaq advanced 2.1%, driven by strength in major technology stocks. Semiconductor stocks also recovered, with the PHLX Semiconductor (SOX) Index rising slightly above 1% after recent volatility. The CBOE Volatility Index (VIX) fell, signaling reduced demand for protection against market declines as investors shifted toward risk assets. Lower Treasury yields further supported the rally, easing inflation concerns and providing additional support for growth-oriented companies.
Technology and communication services led market gains, with the “Magnificent Seven” once again driving momentum. Amazon (NASDAQ:AMZN) surged back above a $3 trillion market capitalization, while Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) gained as optimism surrounding artificial intelligence returned. Nvidia (NASDAQ:NVDA) climbed nearly 3%, helping stabilize the semiconductor sector ahead of upcoming earnings from AMD (NASDAQ:AMD) and other chipmakers. Beyond technology, airlines and fuel-dependent industries benefited from cheaper oil, while energy stocks weakened as crude prices dropped sharply. Overall, the market rally reflected renewed confidence rather than excessive optimism, with investors remaining focused on corporate earnings, inflation trends, and future Federal Reserve policy decisions.
The projected total return for the Global Market Index (GMI) continued its upward trend in July, marking another month of improved expectations. However, the long-term outlook remains below the index’s actual performance over the past decade, although the difference has gradually narrowed.
GMI is a market-capitalization-weighted portfolio that combines major asset classes (excluding cash) through ETF-based proxies. The current projection is calculated as the average of three underlying valuation models.
The latest forecast estimates an annualized return of 8.0%, slightly higher than last month’s projection. Despite the recent improvement, the expected return remains below the benchmark’s trailing 10-year annualized performance, which has been around 9.6%, though the gap has continued to shrink.
Similar to recent updates, many components within GMI are still expected to deliver lower returns than their historical results over the previous decade. The largest gap remains in U.S. equities, where models suggest future performance may moderate compared with the strong returns seen historically, while still remaining positive.
Overall, GMI’s long-term return outlook has improved but remains more conservative than its recent history, with projected annual returns of 8.0% compared with 9.6% over the past 10 years through July.
The Global Market Index (GMI) serves as a theoretical benchmark representing an “optimal” portfolio designed for the average investor with an unlimited investment horizon. While real-world investors face practical constraints, GMI provides a useful foundation for developing and adjusting asset allocation strategies based on individual goals, expectations, risk tolerance, and investment preferences. Historical data indicates that this passive benchmark has delivered competitive results compared with many active asset-allocation approaches, particularly after considering risk exposure, transaction costs, and taxes.
However, the forecasts presented should be viewed with caution, as some or even all projections may differ from actual future outcomes. GMI’s overall forecast is generally expected to be more reliable than predictions for individual asset classes because combining multiple market forecasts can help reduce the impact of errors and volatility over time.
These projections can also be used as a reference point for refining investment expectations. Investors may enhance the estimates by incorporating additional models, assumptions, and factors not included in the current framework. Portfolio strategies should ultimately be tailored to each investor’s specific circumstances, including risk capacity, investment horizon, and financial objectives.
To provide historical context, GMI’s performance can be evaluated through its rolling 10-year annualized returns. Compared with U.S. stock and bond ETFs, the benchmark has maintained strong long-term results. As of the latest update, GMI delivered a 9.6% annualized return over the past decade, slightly lower than the previous month but still reflecting strong historical performance.
The forecasts for the Global Market Index (GMI) are generated using three different models: Building Block (BB), Equilibrium (EQ), and Adjusted Equilibrium (ADJ). Each approach uses a different methodology to estimate future expected returns.
Building Block (BB) Model: The Building Block model estimates future returns based on historical performance. It analyzes data from January 1998 onward, calculates each asset class’s historical risk premium, converts it into an annualized return estimate, and then adds an expected risk-free rate. The risk-free rate is based on the latest yield of the 10-year Treasury Inflation-Protected Security (TIPS), which represents the market’s estimate of a safe, inflation-adjusted return.
Equilibrium (EQ) Model: The Equilibrium model estimates expected returns by focusing on risk rather than directly forecasting returns. Since risk metrics are generally considered more predictable than future returns, the model uses three key inputs:
The expected market price of risk, measured by the Sharpe ratio (the relationship between risk premium and volatility).
The expected volatility of each asset class within GMI.
The expected correlation between each asset class and the overall GMI portfolio.
This approach first calculates expected risk premiums and then adds the risk-free rate to determine projected total returns.
Adjusted Equilibrium (ADJ) Model: The ADJ model follows the same framework as the Equilibrium model but incorporates short-term momentum and long-term mean-reversion factors. Forecasts are adjusted based on current asset prices compared with their 12-month and 60-month moving averages.
When prices are significantly above their recent averages, expected returns are reduced.
When prices are below their historical averages, expected returns are increased.
This adjustment reflects the idea that overvalued assets may experience weaker future returns, while undervalued assets may have stronger potential.
Average (Avg): The average forecast represents the simple mean of the three models (BB, EQ, and ADJ) for each asset class. This combined estimate is used as GMI’s overall expected return projection.
10-Year Return (10yr Ret): This metric shows the actual annualized total return achieved by each asset class over the previous 10 years up to the current reporting period, providing historical context for comparison.
Spread: The spread measures the difference between the average forecast and the historical 10-year return. A negative spread indicates that future expected returns are below recent historical performance, while a positive spread suggests expectations are higher than past results.
GBP/USD edged lower to around 1.3425 during the early Asian session on Tuesday as investors favored the safe-haven US Dollar amid ongoing uncertainty surrounding US-Iran relations.
US President Donald Trump maintained that discussions with Iran are currently taking place, while Iranian officials rejected the claim and stated that no negotiations are underway, adding to geopolitical uncertainty.
Meanwhile, the US Dollar received additional support after the ISM Manufacturing PMI rose to 55.6 in July, beating market expectations and signaling stronger-than-anticipated expansion in the manufacturing sector.
GBP/USD Slides Toward 1.3425 as Safe-Haven Dollar Gains on US-Iran Uncertainty
The GBP/USD pair weakened to around 1.3425 during Tuesday’s early Asian trading session, with the US Dollar attracting safe-haven demand amid persistent uncertainty surrounding potential US-Iran negotiations.
US President Donald Trump stated on Monday that discussions with Iran remain active, describing the situation as Tehran’s “last chance” to reach an agreement. He also indicated that negotiations could begin within the next few days with the aim of reopening the Strait of Hormuz and addressing US concerns over Iran’s nuclear activities.
However, Iranian officials rejected Trump’s claims. Foreign Ministry spokesperson Esmaeil Baghaei said that no talks with Washington are currently underway and emphasized that Iran is focused on negotiations with Oman regarding the Strait of Hormuz.
The Greenback also drew support from stronger-than-expected US economic data. The Institute for Supply Management (ISM) reported that the Manufacturing PMI climbed to 55.6 in July from 53.3 in June, surpassing market forecasts of 54.0 and signaling continued strength in the manufacturing sector.
Market participants are now turning their attention to the US July employment report due later this week, which could provide fresh clues about the outlook for the Federal Reserve and the US Dollar.
Meanwhile, sterling remains under pressure despite a relatively hawkish vote split at the Bank of England’s latest policy meeting. The BoE left interest rates unchanged at 3.75% in a 6-3 decision, with three policymakers favoring a rate increase. Nevertheless, Governor Andrew Bailey struck a cautious tone, arguing that the disinflation process remains on track and dampening expectations of an aggressive tightening cycle. Investors currently anticipate only one additional BoE rate hike before year-end.
Analysts at Rabobank noted that speculative bearish positions against the Pound increased ahead of the BoE meeting. While the Monetary Policy Committee delivered a more hawkish voting outcome than expected, Bailey’s dovish remarks limited support for sterling, leaving overall sentiment toward the currency subdued.
Silver remains supported as renewed US-Iran discussions regarding the Strait of Hormuz help alleviate concerns over disruptions to global oil supplies.
President Trump described his latest proposal for negotiations as Iran’s “last opportunity” after calling off a planned large-scale military strike against the country.
Financial markets are currently pricing in roughly a 65% probability that the Federal Reserve will raise interest rates by 25 basis points at its September meeting.
Silver prices (XAG/USD) continued to advance for a second consecutive session on Tuesday, hovering near $58.70 per troy ounce during Asian trading hours. The precious metal remains supported as investors seek non-yielding assets amid ongoing geopolitical uncertainties and evolving economic conditions.
Market participants are closely watching developments surrounding US-Iran negotiations for clues about a possible reopening of the Strait of Hormuz, while also assessing the outlook for future Federal Reserve policy decisions.
Geopolitical tensions remain elevated after US President Donald Trump described his latest proposal for talks as Iran’s “last chance,” following his decision to cancel a planned large-scale military operation. Trump indicated that formal discussions could begin soon, focusing on securing navigation through the Strait of Hormuz and addressing longstanding concerns over Iran’s nuclear activities.
Iranian officials swiftly rejected the proposal. General Mohsen Rezaei, an adviser to Iran’s Supreme Leader, stated that Tehran would not allow the creation of a second corridor through the Strait and warned that any foreign naval or military presence introduced for that purpose would face direct retaliation.
Meanwhile, investors continue to adjust their expectations after the Federal Reserve left interest rates unchanged in July. According to CME FedWatch data, financial markets currently assign roughly a 65% probability to a 25-basis-point rate increase at the Fed’s September meeting.
Williams Maintains a Cautiously Hawkish Tone
Federal Reserve Bank of New York President John Williams delivered a moderately hawkish message, earning a 6.0/10 score on the FXS Speechtracker, slightly above its historical average of 5.8. His comments reflected confidence that current policy settings are appropriately positioned to guide inflation back toward the Fed’s 2% target.
Williams reiterated the central bank’s readiness to respond if inflation deviates from its desired path, while expressing optimism that price pressures will continue to moderate and that inflationary effects stemming from the Middle East conflict will gradually fade. His remarks suggested a patient but vigilant approach rather than signaling a push for aggressive tightening.
He also emphasized that market expectations provide useful input for policymakers but do not dictate policy decisions. In addition, Williams downplayed concerns that rising investment in artificial intelligence poses a threat to financial stability.
Despite the slightly hawkish tone, the FXS Fed Sentiment Index declined by 1.47 points to 146.76. While the reading remains firmly above the neutral 100 level, the drop suggests investors viewed Williams’ remarks as largely consistent with the Fed’s existing policy outlook rather than a signal of a more aggressive tightening cycle.
Gold prices drift lower toward the $4,050 level during Tuesday’s early Asian trading session. Market sentiment remains cautious after US President Donald Trump described upcoming Washington–Tehran negotiations as Iran’s “last chance” to reach an agreement. Investors are also turning their attention to the US July employment report, scheduled for release later on Friday, which could provide fresh direction for the precious metal.
Gold Slips Toward $4,050 as US–Iran Talks Remain Uncertain
Gold prices (XAU/USD) edged lower to around $4,050 during Tuesday’s early Asian session, retreating modestly from recent highs after the United States paused planned military action against Iran. Market participants are closely watching developments surrounding potential US–Iran negotiations for fresh direction.
According to Bloomberg, US President Donald Trump described the latest diplomatic proposal as Iran’s “last chance” after canceling what he claimed would have been a major strike on the country. Trump said discussions could begin within days, aiming to reopen the Strait of Hormuz and address Washington’s concerns over Iran’s nuclear program.
However, Iran denied that direct negotiations with the US are underway, although officials indicated that talks with Oman to improve shipping traffic through the strategically important waterway are progressing.
Despite growing hopes for a diplomatic breakthrough, uncertainty in the Middle East remains elevated. Any renewed escalation between Washington and Tehran could lift crude oil prices and reinforce expectations that central banks will keep interest rates higher for longer. While gold is traditionally viewed as a hedge against inflation and geopolitical risk, higher interest rates tend to reduce its appeal because the metal does not generate yield.
Meanwhile, the Federal Reserve left its benchmark interest rate unchanged at 3.50%–3.75% during last week’s policy meeting. Fed Chair Kevin Warsh reiterated the central bank’s commitment to bringing inflation under control, keeping the possibility of additional tightening on the table.
Investors are now focused on Friday’s US employment report, which could provide important clues about the Fed’s next policy moves. Analysts at Commerzbank note that expectations for further US rate hikes continue to limit gold’s upside potential, arguing that persistent speculation about tighter monetary policy is likely to discourage investors from aggressively extending the precious metal’s recent rally.
Gold has undergone a sharp correction over the past six months after reaching an exceptionally overheated peak during its strongest cyclical bull market on record. While the pullback damaged technical indicators and weakened investor sentiment, the price action has gradually formed a large falling-wedge pattern—a chart formation that often signals a bullish breakout.
By late January, gold had surged nearly 196% in less than 28 months, marking its biggest cyclical rally in US-dollar terms. The advance became increasingly parabolic, with prices climbing more than 43% above the 200-day moving average—the most overbought reading in almost 46 years. Such extreme conditions pointed to an inevitable correction, and historical comparisons suggested a sizable retracement was likely. Gold subsequently fell about 18.6% over less than two months, broadly matching expectations.
Although that decline may have established a temporary bottom, renewed geopolitical tensions between the US and Iran, expectations of safe-haven flows into the US Dollar, regional central-bank selling, and concerns over further Federal Reserve tightening prolonged the downturn. At the same time, investors have been adjusting to the Fed’s evolving communication strategy under its new leadership, adding further uncertainty. As a result, gold’s correction deepened to roughly 26% by late July, exceeding the average drawdowns seen after previous major bull markets.
Despite the extended weakness, selling pressure has noticeably eased. More than 70% of the total decline occurred during the early phase of the correction, while subsequent losses have become progressively smaller. This slowdown has created a descending support line, whereas increasingly cautious investor sentiment has driven lower highs at a faster pace, producing a steeper resistance line. Together, these converging trendlines have formed a classic falling-wedge pattern.
Falling wedges are characterized by narrowing downward-sloping trendlines, with resistance declining faster than support. They are also typically accompanied by weakening trading volume as bearish sentiment discourages buying activity. As prices become increasingly compressed within the pattern, the setup often culminates in a breakout, making the current technical structure a potentially constructive signal for gold.
Gold’s steep-looking falling-wedge pattern appears more dramatic because it is plotted against the backdrop of the largest cyclical bull market in its history. On a shorter six-month chart, however, the decline looks far less severe. As prices continue to compress between converging support and resistance trendlines, a breakout is drawing closer. Given the nature of falling wedges, the odds favor an upside resolution, potentially marking the beginning of a fresh bullish leg as selling pressure continues to fade and buyers gradually regain control.
Falling wedges are widely regarded as reversal patterns because prolonged declines eventually exhaust selling momentum, leaving fewer sellers while attracting bargain hunters. Although chart patterns alone are not enough to justify investment decisions, they become more compelling when supported by sentiment, technical signals, and underlying fundamentals. In gold’s case, the current wedge follows an extended correction rather than a speculative peak, making it consistent with the characteristics of a potential bottoming formation.
Investor sentiment also reinforces the bullish outlook. After months of losses, enthusiasm for gold has largely faded, with many traders either indifferent or expecting further declines. At the same time, gold reached its most oversold level relative to its 200-day moving average in nearly a decade during mid-July, suggesting downside momentum may be becoming exhausted. Historically, such deeply oversold conditions have often created attractive entry points for long-term investors.
The macro backdrop is also becoming more supportive. Markets appear to be reacting less aggressively to geopolitical headlines surrounding the US-Iran conflict, while fears of additional Federal Reserve rate hikes have started to lose their impact. Despite a more hawkish-than-expected Federal Open Market Committee (FOMC) meeting, gold posted gains instead of extending its losses, a sign that buyers are becoming more resilient as the correction matures.
Fundamentals further strengthen the bullish case. Gold futures positioning indicates that speculative long exposure remains relatively low, leaving ample room for new buying. Investor allocations to gold also remain historically depressed, with the combined value of holdings in major US gold ETFs accounting for only a tiny fraction of the S&P 500’s market capitalization. Even a modest increase in portfolio allocations could generate meaningful demand for bullion. Meanwhile, global central banks continue to accumulate gold at a strong pace, with second-quarter purchases surging from a year earlier according to the latest Gold Demand Trends report.
Seasonal trends add another layer of support, as gold typically performs well through autumn, winter, and spring during bull markets. If gold breaks decisively above the falling-wedge resistance, mining stocks could outperform the metal itself thanks to their operational leverage. Taken together, oversold technicals, subdued investor positioning, supportive fundamentals, and favorable seasonality suggest that the current correction may be nearing its end, with a sustained bullish reversal becoming increasingly likely.
Oil prices come under heavy selling pressure after Iran signals a willingness to reopen the Strait of Hormuz. Despite crude prices surging more than 22% in July amid escalating US-Iran military tensions, traders remain cautious as doubts persist over the durability of the emerging peace agreement.
WTI crude oil futures on the NYMEX remain under significant pressure, falling 7.6% to around $78.60 during Monday’s Asian session. The decline comes after US President Donald Trump announced that planned strikes against Iran had been paused, following Tehran’s reported agreement to abandon its nuclear ambitions and fully reopen the Strait of Hormuz — a vital shipping route that handles nearly 20% of global energy flows.
Trump stated on Truth Social that Iran and other Middle Eastern nations had requested a halt to military action after the framework of a deal was reached, including the immediate reopening of the Strait of Hormuz and the removal of Iran’s nuclear threat.
The announcement has raised expectations for renewed diplomatic negotiations between Washington and Tehran, easing concerns over a prolonged disruption to global oil supplies.
However, WTI had previously surged more than 22.5% in July as escalating military tensions between the US and Iran fueled fears of supply constraints following the collapse of a ceasefire agreement.
Despite the latest developments, market participants remain cautious about the durability of the truce, with concerns that renewed tensions could once again threaten energy flows through the Strait of Hormuz. Analysts at IG Markets warned that the key question is whether this week will repeat the previous pattern, where hopes of a deal fade as Iran maintains pressure over the strategic waterway.
WTI Technical Analysis
WTI crude oil is trading lower near $78.70, maintaining a bearish short-term outlook as prices continue to hold below the 20-hour exponential moving average (EMA) at $81.18. The failure to reclaim this key indicator suggests sellers remain in control following the recent pullback from the mid-$80 range. Meanwhile, the Relative Strength Index (RSI) stands at 34.20, close to oversold levels, indicating that downward momentum remains strong but has not yet reached an extreme exhaustion point.
On the upside, the 20-hour EMA around $81.18 represents the first major resistance level and a crucial hurdle for buyers. A sustained move above this area would help reduce near-term selling pressure and signal a potential recovery attempt.
On the downside, the July 28 low at $77.16 serves as the key support level. A decisive break below this zone could trigger further losses, potentially opening the way toward the July 13 low at $72.53.
What’s the full story? Bank of America downgraded Huntington Bancshares from Buy to Neutral and reduced its price target to $18.50. The post-merger integration following the Cadence acquisition has largely stabilized, but the anticipated valuation expansion has lost momentum. BofA is becoming less confident that investors will fully accept management’s ambitious 2027 EPS target of $1.90–$1.93, especially as pressure on net interest income continues to weigh on profitability.
The bank’s core revenue engine is showing signs of weakness. A 2% miss in quarterly net interest income forced management to acknowledge that FY26 revenue may fall below its previous target range. As a result, BofA lowered its EPS forecasts to $1.58 for FY26 and $1.85 for FY27. The new $18.50 price target reflects a balance between forward earnings multiples and tangible book value, suggesting limited upside potential if profit margins continue to deteriorate.
Tuesday – Clorox Co (NYSE: CLX)
What’s the full story? Jefferies downgraded Clorox to Hold after conceding that its previous bullish outlook was overly optimistic. The earlier investment thesis assumed the consumer staples company could generate more than $7.00 in fiscal 2027 earnings per share while successfully overcoming operational challenges. However, weaker market share trends have persisted, and the appointment of a new CEO points toward a broader strategic overhaul.
The expected turnaround will likely require increased investment, putting further pressure on earnings. Jefferies forecasts that Clorox’s upcoming FY27 guidance could come in around 6% below current market expectations. With recovery timelines extending and management preparing for a significant operational reset, the turnaround story has lost momentum. Investors may prefer to wait until the new leadership team demonstrates clearer progress.
What’s the full story? B. Riley upgraded Ribbon Communications from Neutral to Buy and raised its price target to $3.30, despite management recently cutting its full-year 2026 outlook. The upgrade reflects the view that previous company targets were unrealistically ambitious, creating repeated earnings disappointments. By resetting expectations to more achievable levels, management has reduced execution risk and created a stronger foundation for future growth.
Although the company lowered guidance due to weaker-than-expected third-quarter expectations and delayed Tier-1 customer deployments, second-quarter results still exceeded modest forecasts. B. Riley reduced its EBITDA estimates but assigned a higher valuation multiple, applying 1.0x 2027 enterprise value-to-sales. With unrealistic expectations already removed from the stock, the reset could provide a clearer path for operational improvement.
Thursday – New Oriental Education & Technology Group (NYSE: EDU)
What’s the full story? Macquarie upgraded New Oriental Education to Neutral and increased its price target by 15%, driven largely by the company’s strong shareholder return strategy. Fourth-quarter revenue increased 23% year-over-year, exceeding guidance, while non-GAAP operating margins improved by 60 basis points to 7.2%.
However, the improvement remains heavily dependent on the performance of the East Buy segment, while the core education business continues to show limited growth. Macquarie remains cautious about FY27 margin expansion, citing potential overseas restructuring costs that could impact efficiency goals.
Despite operational challenges, New Oriental’s strong cash generation supports investor returns. The company announced a new $500 million capital return program, including $300 million in dividends and $200 million in share buybacks, creating an estimated 6% total shareholder yield. This provides support for the stock’s valuation despite ongoing business pressures.
Friday – AXT Inc (NASDAQ: AXTI)
What’s the full story? Needham upgraded AXT from Hold to Buy and introduced a $90 price target, valuing the company at approximately 26 times projected 2028 earnings. The upgrade comes as the company’s fundamentals begin to improve significantly, making the valuation appear increasingly attractive.
AXT delivered another strong earnings performance, beating expectations for revenue, EPS, and forward guidance. The company plans to double its Indium Phosphide substrate capacity over the next year and has returned to profitability. New agreements with two major global laser manufacturers, combined with accelerating demand from China’s optical networking sector, are turning the data center growth narrative into tangible revenue opportunities and expanding market share.
Gold trades under pressure near $4,050 during Monday’s Asian session, even as falling Oil prices and a weaker US Dollar—driven by the decline in USD/JPY—would typically provide support. Expectations of further Federal Reserve rate hikes, together with ongoing geopolitical tensions in the Middle East, continue to weigh on the precious metal ahead of this week’s closely watched Nonfarm Payrolls (NFP) report.
Technical Analysis
On the daily chart, XAU/USD is trading at $4,082.83 and maintains a bearish short-term outlook as the price remains below key simple moving averages. The 50-day SMA at $4,185.76, the 100-day SMA at $4,426.31, and the 200-day SMA at $4,490.85 are all positioned above the current price, indicating that any recovery attempts may face resistance during the broader corrective trend. Meanwhile, the 21-day SMA at $4,073.95 provides immediate dynamic support. The 14-period Relative Strength Index (RSI) is hovering around 48.3, slightly below the neutral 50 level, signaling weak momentum and suggesting that the market remains in a consolidation phase with a downside bias.
On the upside, the first key resistance level is located around the 50-day SMA at $4,185.76. A daily close above this level would help reduce near-term bearish pressure and potentially pave the way for further gains toward the 100-day SMA at $4,426.31, followed by the 200-day SMA at $4,490.85. On the downside, immediate support stands near the 21-day SMA at $4,073.95. A decisive break below this area could trigger additional declines and indicate that sellers are regaining control of the broader daily trend.
Fundamental Analysis
Gold is struggling to maintain gains above the $4,100 level after briefly closing above this threshold on Thursday, as the US Dollar (USD) rebounds strongly from six-week lows against its major currency counterparts.
Although Pakistan, acting as a mediator, stated that discussions between Tehran and Washington remain ongoing, renewed tensions in the Middle East have boosted demand for the Greenback as a safe-haven asset. The US carried out “heavy” strikes on Iran following new attacks against American forces in Jordan, increasing geopolitical uncertainty and supporting the USD.
In response, Iranian Parliament Speaker Mohammad Bagher Ghalibaf criticized the US actions, stating in a post on X that Washington would face consequences for its military response.
The Dollar is also benefiting from market expectations that the Federal Reserve may resume interest rate hikes later this year, despite Fed Chair Kevin Warsh maintaining a cautious stance on future monetary tightening during Wednesday’s post-meeting press conference.
HSBC analysts noted that the Federal Reserve kept interest rates unchanged for the fifth consecutive meeting, as expected, but highlighted that the close 9-3 vote reflected significant debate within the FOMC. The bank maintains a neutral view on bond duration while favoring high-quality investment-grade credit due to attractive yields. HSBC also remains constructive on the US Dollar, supported by resilient US economic conditions and favorable interest rate differentials.
Beyond the Dollar’s recovery, Gold is facing additional pressure from weaker-than-expected Chinese official manufacturing PMI data for July, while investors remain cautious ahead of the Bank of Japan’s (BoJ) monetary policy decision.
Markets saw sharp volatility during early US trading hours on Thursday after speculation of Japanese currency intervention sent the Yen (JPY) sharply higher, causing USD/JPY to plunge by around 600 pips within minutes. The sudden decline in USD/JPY weighed heavily on the Dollar, briefly allowing Gold to reclaim the $4,100 level.
Meanwhile, mixed US GDP figures and jobless claims data further pressured the USD and provided some support for the precious metal.
Looking ahead, Gold could receive a boost if the BoJ delivers a hawkish hold decision, potentially strengthening the Yen and putting additional pressure on the Dollar. However, a further escalation of Middle East tensions could have a mixed impact, as increased demand for the US Dollar as a safe-haven asset may limit Gold’s upside potential.
The US Dollar Index (DXY) trades with a softer tone near 99.70 during Monday’s Asian session. The greenback came under pressure after President Trump stated that fresh negotiations with Iran would begin on Monday, following his decision to cancel a planned military strike. Investors are now turning their attention to Friday’s US Nonfarm Payrolls (NFP) report, which could provide important clues about the Federal Reserve’s next policy move.
US Dollar Weakens as Improved Risk Appetite and Iran Diplomacy Weigh on Safe-Haven Demand
The US Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, trades around 99.70 during Monday’s Asian session. The index remains under pressure as improving market sentiment reduces demand for traditional safe-haven assets. Investors are also awaiting the release of the US ISM Manufacturing PMI later in the day for fresh economic signals.
Risk sentiment received a boost after US President Donald Trump announced on Sunday that he had canceled a planned military strike on Iran and that new talks between Washington and Tehran would begin on Monday. Trump indicated that an agreement to reopen the Strait of Hormuz could be within reach and reiterated his commitment to pursuing a diplomatic solution to Iran’s nuclear program.
The prospect of easing tensions between the United States and Iran has diminished demand for the US Dollar as a defensive asset, weighing on the currency in the short term. If diplomatic progress continues, the greenback could face additional downside pressure against its major peers.
Market participants are now focused on Friday’s US labor market report for further direction. Economists forecast that Nonfarm Payrolls (NFP) increased by 91,000 jobs in July, while the unemployment rate is expected to edge higher to 4.3%. A stronger-than-anticipated employment report could provide support for the Dollar and help limit further losses in the DXY.
Meanwhile, the Federal Reserve left interest rates unchanged at its July meeting last week. According to CME FedWatch data, traders now see roughly a 64.7% probability of a September rate hike, down significantly from nearly 77% before the Fed’s latest decision, reflecting a more cautious outlook for monetary tightening.
Analysts at Commerzbank believe the Dollar could face renewed selling pressure once geopolitical tensions ease further. They argue that the Fed is unlikely to raise rates as aggressively as current market pricing suggests, meaning the fading geopolitical premium could expose the currency to additional weakness if expectations for tighter policy continue to moderate.
The Federal Reserve left interest rates unchanged at 3.50%–3.75% on Wednesday, but the key takeaway for markets was not the decision itself—it was what Chair Kevin Warsh chose not to signal about September.
Three members of the Federal Open Market Committee (FOMC) voted in favor of an immediate 25-basis-point rate increase, while the policy statement retained a generally hawkish stance on inflation. The Fed noted that economic activity continues to expand at a solid pace, the labor market remains resilient, and inflation is still running above the central bank’s 2% target.
Taken at face value, those remarks could be interpreted as laying the groundwork for further tightening.
However, Warsh avoided providing any clear indication that a September rate hike is likely. Instead, he emphasized a data-dependent approach, preserving flexibility rather than committing to another increase.
That nuance is important.
Ahead of the meeting, many investors viewed September as the most probable timing for the next rate hike if policymakers remained on hold in July. After Warsh’s remarks, confidence in that scenario eased noticeably, leaving the outlook for September far less certain.
Hawkish Messaging, Softer Market Interpretation
The result is a notable disconnect.
On one hand, the Fed’s message remains hawkish. Inflation is still above target, economic growth appears strong enough to withstand tighter policy, and several policymakers already favor higher rates.
On the other hand, financial markets interpreted the outcome as relatively dovish because the Fed showed no urgency to tighten further.
This was evident in the immediate market reaction. Two-year Treasury yields declined and the US dollar weakened after the announcement, indicating that traders reduced expectations for near-term rate increases.
From my perspective, the dollar may continue to face pressure unless upcoming inflation reports revive expectations of a September hike.
For now, the Fed has effectively shifted the focus back to incoming economic data.
If inflation proves persistent, markets could quickly reprice toward a more hawkish September outlook. However, if inflation and labor-market data begin to soften, investors may increasingly view July’s decision not as a postponed rate hike, but as the start of a more prolonged pause in the tightening cycle.
DXY: 100.300 Back in the Spotlight
Technically, the US Dollar Index now has the potential to extend its move lower following the post-Fed rejection.
The key downside area to watch is 100.300, which provides the next meaningful support zone.
As long as DXY fails to regain its recent highs and expectations for September tightening remain contained, the path of least resistance could remain lower towards this level.
A clean break below 100.300 would strengthen the bearish dollar narrative, while a recovery driven by stronger inflation data and renewed Fed hike expectations would challenge it.
For now, the interesting takeaway from the Fed is simple: the rhetoric was hawkish, but the market was expecting something even more hawkish.
And in markets, the difference between what happens and what was already expected is often what matters most.
From a technical perspective, the US Dollar Index (DXY) appears vulnerable to further downside after its post-Fed rejection.
The next key level to monitor is 100.300, which stands out as the nearest significant support zone.
As long as DXY remains unable to reclaim its recent highs and market expectations for a September rate hike stay subdued, bearish momentum could continue to build toward this area.
A decisive break below 100.300 would reinforce the case for further dollar weakness and confirm a more bearish outlook. Conversely, stronger-than-expected inflation data or a renewed increase in expectations for Fed tightening could help the dollar recover and invalidate the current downside scenario.
For now, the main lesson from the Fed meeting is straightforward: policymakers delivered a hawkish message, but markets had been positioned for an even more hawkish outcome.
In financial markets, what drives price action is often not the event itself, but the gap between reality and investor expectations.
Bitcoin Gains 9% in July as Crypto Shows Resilience Amid AI-Driven Market Selloff
The Federal Reserve left interest rates unchanged this week, but the bigger story for investors was the continued weakness in AI-related equities. While major technology stocks and semiconductor names extended their declines, Bitcoin quietly advanced around 9% during July, raising questions about whether cryptocurrencies could lead the next market recovery.
Key Takeaways
Bitcoin has remained resilient, holding near $64,000 through the Fed meeting and posting a 9% gain for the month.
AI-focused equities are undergoing a significant deleveraging phase, with the Magnificent Seven ETF (MAGS) recording its steepest one-day decline since April 2025.
South Korea’s KOSPI index plunged roughly 16% over two sessions, triggering consecutive circuit breakers for the first time in the exchange’s history.
Investors are becoming increasingly skeptical of massive AI-related spending without clear evidence of profitable returns.
Regulatory progress in the U.S. crypto market, including support for the CLARITY Act, is providing an additional tailwind for digital assets.
Fed Decision Highlights Pressure on AI Stocks
Although the Federal Open Market Committee opted to keep rates unchanged, markets reacted negatively to the broader policy outlook. Expectations for another rate increase strengthened, with CME FedWatch indicating a 65.1% probability of a hike at the September meeting.
The hawkish backdrop weighed heavily on AI-related stocks. Nvidia lost more than 10% during the week, while investors increasingly questioned whether the enormous capital expenditures being made across the AI ecosystem would translate into sustainable earnings growth.
Earnings Reveal a Shift in Investor Priorities
The recent earnings season highlighted a clear distinction between companies demonstrating tangible AI-driven revenue growth and those merely increasing investment.
The Magnificent Seven ETF fell 4.7% following earnings reports from Alphabet and Tesla, marking its worst session since April 2025. Year-to-date, the ETF remains in negative territory despite strong gains across the broader S&P 500.
Among the major technology companies:
Alphabet reported second-quarter capital expenditures of $44.9 billion and raised its full-year spending outlook to $195–205 billion. Investors responded negatively as heavy investment pushed free cash flow into negative territory, sending shares down 7%.
Tesla missed earnings expectations and generated negative free cash flow of $1.1 billion. The stock declined roughly 20% during the week as investors grew less willing to pay for long-term AI and robotics ambitions without near-term profitability.
Meta delivered strong revenue growth but reported lower net income and shrinking free cash flow. Shares fell after management increased spending guidance despite declining profitability.
Microsoft stood out as the exception. Revenue exceeded expectations, Azure growth accelerated to 43%, and investors rewarded the company for demonstrating measurable AI monetization. Shares rose sharply after earnings.
The message from the market was straightforward: spending alone is no longer enough. Investors now want proof that AI investments can generate meaningful returns.
South Korea Signals Cracks in AI Valuations
The correction has not been limited to U.S. markets.
South Korea’s KOSPI index suffered its worst two-day decline on record, falling approximately 16% and triggering back-to-back trading halts. The selloff was driven largely by semiconductor weakness.
SK Hynix, despite reporting record operating profit and nearly sixfold earnings growth, still disappointed investors by narrowly missing analyst forecasts. The stock plunged almost 19% intraday.
The reaction underscored growing concerns that AI-related valuations may have become detached from realistic earnings expectations. Even exceptional profit growth is no longer guaranteeing positive market reactions.
Why Crypto May Recover Faster
In contrast to equities, Bitcoin has shown relative stability throughout the recent market turbulence.
While AI stocks continue to unwind, Bitcoin remains about 9% higher for July and has largely held key support levels. One explanation is that cryptocurrencies experienced their correction earlier. Bitcoin had already fallen more than 20% in June and remains roughly one-third below its recent highs.
Leverage dynamics also differ significantly.
AI-related equities benefited from a year of aggressive positioning through leveraged ETFs, margin borrowing, and expanding valuations. As sentiment turns, those positions are being unwound rapidly, amplifying downside volatility.
Crypto markets, by comparison, routinely flush excess leverage through liquidations. Significant ETF outflows and price declines during May and June already removed much of the speculative excess from the market. As a result, positioning appears cleaner and less vulnerable to forced selling.
Regulatory Momentum Supports the Crypto Narrative
Fundamentals are also improving.
On July 28, SEC Chair Paul Atkins expressed support for congressional efforts to advance the CLARITY Act and indicated the agency’s willingness to provide technical assistance. If enacted, the legislation would establish a clearer regulatory framework for digital assets in the United States.
This combination of reduced leverage, improving regulation, and an earlier correction strengthens the argument that crypto may be better positioned than AI equities for the next phase of recovery.
Looking Ahead
Several economic releases could shape market sentiment in the coming week:
August 3: U.S. ISM Manufacturing PMI
August 5: U.S. ISM Services PMI
August 7: U.S. Nonfarm Payrolls Report
Ongoing developments in the Middle East and their impact on energy markets
The labor market remains a critical variable. A second consecutive weak payroll report could reduce expectations for further rate hikes, while stronger employment data would reinforce the Fed’s hawkish stance.
Oil prices remain the most significant macro risk. Elevated energy costs continue to threaten inflation progress, and a combination of rising oil prices and stronger-than-expected employment data would likely create a challenging environment for risk assets across both equities and crypto markets.
JPMorgan lowered its silver price outlook to $60–$65 per ounce in July, triggering a broader wave of forecast reductions across Wall Street. However, despite the more cautious price expectations, none of the major banks suggested that the silver market’s underlying supply shortage had disappeared.
As of writing, silver is trading near $58.24 per ounce, while the gold-to-silver ratio stands around 69, meaning it takes 69 ounces of silver to purchase one ounce of gold. Historically, such a level is considered relatively high, implying that silver remains inexpensive compared to gold. Although silver has gained more than 50% over the past year, it still trades roughly 52% below its all-time high of $121.62, reached on January 29.
The Federal Reserve kept interest rates unchanged on July 29 for the fifth consecutive meeting, despite a divided 9–3 vote among policymakers. Silver showed little reaction to the decision and has failed to close above $60 since July 8. Throughout the month, the metal faced pressure from a stronger U.S. dollar, renewed geopolitical tensions in the Middle East, and concerns about slowing industrial demand. Against this backdrop, a series of downward revisions from major banks led some investors to assume that institutional sentiment toward silver had turned bearish.
However, it is important to distinguish between a price forecast and a market balance assessment. A price forecast reflects expectations for where silver prices may trade in the coming months, while a balance assessment evaluates whether global supply can adequately meet demand. During July, banks largely revised the former while leaving the latter intact. Failing to recognize this distinction can lead to misunderstandings about the market’s outlook.
A Wave of Forecast Downgrades
The shift began on July 8, when JPMorgan reduced its year-end silver forecast from roughly $81 to $60–$65 per ounce. The bank cited weakening investor interest following silver’s sharp decline from January’s record highs, along with softer industrial demand as elevated prices encouraged manufacturers to reduce silver usage. JPMorgan also highlighted the development of silver-free solar technologies as a significant long-term challenge for demand growth.
Other financial institutions followed suit. UBS sharply lowered its estimate for the 2026 silver supply deficit, cutting it by approximately 80%, from around 300 million ounces to 60–70 million ounces. The bank also reduced price targets across multiple timeframes and adopted a more neutral outlook, expecting silver to trade largely sideways. ING trimmed its forecasts due to weaker solar demand, rising bond yields, and a stronger dollar, while Commerzbank maintained a target of about $67 per ounce. Collectively, these revisions reflected a more conservative stance from sell-side analysts.
Deficit Remains Despite Lower Forecasts
While the revisions signaled lower price expectations, they did not indicate that the silver market had moved into surplus. Even UBS’s substantially reduced deficit estimate of 60–70 million ounces remains above the 46.3 million-ounce deficit projected for 2026 by the Silver Institute and Metals Focus. In other words, analysts are revising estimates closer to official forecasts rather than suggesting that supply shortages have disappeared.
Forecasts also remain highly dispersed. The difference between the most optimistic and most pessimistic projections is roughly $50 per ounce, nearly equal to silver’s current market price. Citigroup still expects silver to approach $110 during the second half of the year. Bank of America forecasts an average price of approximately $85.93 in 2026, while Goldman Sachs sees potential for $85–$100 if industrial demand remains resilient. Meanwhile, the London Bullion Market Association (LBMA) survey places the average 2026 forecast at $79.57 per ounce.
Perhaps the most notable takeaway is that even after a month of downward revisions, the consensus forecast remains more than $20 above current market levels. At around $58 per ounce, silver continues to trade below every major bank forecast, including the most conservative projections, underscoring the belief that supply constraints remain a key feature of the market despite softer near-term expectations.
Why Lower Price Targets Do Not Change the Core Investment Thesis
A key distinction investors should remember is that a reduced price target does not necessarily signal a change in the underlying market fundamentals. Instead, it often reflects an adjustment to recent price action rather than a reassessment of long-term supply and demand dynamics.
When JPMorgan lowered its silver forecast to $60–$65 per ounce, the bank was effectively acknowledging weaker near-term price momentum and expecting subdued performance over the coming months. However, this does not imply that silver production will suddenly exceed consumption. The long-term bullish thesis is built on physical market fundamentals, and those fundamentals remain largely unchanged. Global mine supply is still expected to remain relatively stable, demand continues to outpace production, and the market is projected to record its sixth consecutive annual deficit.
Historical precedent also supports caution when interpreting analyst revisions. Throughout the current silver cycle, major banks have often adjusted their forecasts in response to price movements rather than anticipating them. Several institutions initially published conservative targets only to raise them repeatedly as silver rallied beyond expectations. As a result, mid-cycle forecast reductions following a correction are consistent with past behavior. In many cases, sell-side forecasts tend to follow market trends, lowering targets after declines and increasing them after rallies, making them better indicators of recent sentiment than future performance.
That said, bearish arguments should not be dismissed. Investor demand has undeniably weakened since silver’s January peak, exchange-traded fund (ETF) holdings have declined, and solar-panel manufacturers continue working to reduce the amount of silver used in production. UBS’s decision to sharply lower its projected supply deficit represents a meaningful reassessment of the market’s scarcity outlook rather than a minor adjustment. Any balanced bullish argument must acknowledge these developments rather than ignore them.
Implications for Silver Investors
For investors, the most important takeaway is to distinguish between short-term price expectations and long-term market fundamentals.
A reduced price target simply indicates that analysts expect silver prices to remain under pressure in the near future. It says little about whether the global market remains undersupplied. On that question, major banks continue to project deficits, despite revising their price forecasts lower. Even the most conservative deficit estimates on Wall Street remain above official industry projections, while the broader analyst consensus still places silver prices significantly above current levels.
At present, silver trades below every major forecast, ranging from the most bearish projections to the most optimistic. This unusual situation highlights a market where investor sentiment has become cautious, yet the underlying supply-demand imbalance remains unresolved.
The broader investment case for silver continues to rest on a structural deficit expected to extend into a sixth consecutive year in 2026. Such a deficit means global consumption exceeds newly mined and recycled supply, forcing the market to draw from existing inventories. Lower analyst price targets do not increase those inventories or eliminate the shortage.
In the short term, silver prices are likely to remain sensitive to macroeconomic factors such as Federal Reserve policy, U.S. dollar strength, and energy market developments. These influences can drive significant volatility from week to week. However, the structural deficit evolves much more slowly and remains largely unaffected by temporary shifts in market sentiment.
As a result, while July’s forecast downgrades may have weakened confidence in the near-term outlook, they did not fundamentally alter the underlying mathematics of the silver market. The sentiment has changed, but the supply-demand imbalance that supports the longer-term thesis remains in place.
USD/CAD edges higher as the US Dollar stages a solid rebound from its lowest level since June 17. Rising tensions between the United States and Iran continue to fuel inflation concerns and reinforce expectations that the Federal Reserve could maintain a hawkish stance, providing support for the Greenback. Meanwhile, worries over potential supply disruptions help keep oil prices elevated, lending support to the Canadian Dollar and limiting further gains in the currency pair.
The USD/CAD pair moved slightly higher during Friday’s Asian trading session, ending a three-day decline that had pushed the pair to its lowest level since June 17. The pair remains above the key 1.4000 level, although buying momentum appears limited.
The US Dollar found modest support as markets continued to price in the possibility of at least one additional interest rate increase from the Federal Reserve. While recent US economic data painted a mixed picture—showing slower economic growth in the second quarter and easing inflation pressures through the Personal Consumption Expenditures (PCE) Price Index—investors remain cautious about ruling out further monetary tightening.
Despite signs of cooling inflation, fluctuating oil prices continue to raise concerns about price stability, potentially encouraging the Fed to maintain a restrictive policy stance. At the same time, escalating tensions between the United States and Iran, along with fears of a wider Middle East conflict, have boosted demand for the safe-haven US Dollar. Most recently, the US military confirmed a major wave of strikes against Iranian targets in response to missile attacks on American forces earlier in the week.
However, gains in USD/CAD may remain constrained by support for the Canadian Dollar. Iran’s rejection of an Omani proposal regarding partial control of the Strait of Hormuz, combined with continued attacks by Yemen’s Houthi forces in key shipping routes such as the Bab al-Mandab Strait, the Red Sea, and the Gulf of Aden, has intensified concerns over potential disruptions to global energy supplies. These risks have helped support crude oil prices, which in turn provide backing for the oil-sensitive Canadian Dollar and may limit further upside in the USD/CAD pair.
Gold comes under renewed selling pressure on Friday as the US Dollar rebounds from a six-week low. Rising tensions between the United States and Iran continue to fuel inflation concerns and reinforce expectations of further Federal Reserve tightening, lending support to the greenback. Meanwhile, bearish technical signals suggest that Gold could remain vulnerable to additional downside in the near term.
Gold prices remain under pressure during Friday’s Asian session, with XAU/USD struggling to sustain its recent rebound above the $4,100 level. A recovery in the US Dollar from its lowest point since mid-June, combined with persistent expectations that the Federal Reserve could still raise interest rates later this year, is weighing on demand for the non-yielding precious metal.
The pressure comes despite softer US economic data released on Thursday. The US economy expanded at an annualized pace of 1.5% in the second quarter, slowing from 2.1% previously and falling short of expectations. Inflation data also pointed to easing price pressures, as the headline Personal Consumption Expenditures (PCE) Price Index declined 0.1% in June, marking its first monthly drop since 2020. Annual headline inflation slowed to 3.7%, while core PCE, the Fed’s preferred inflation gauge, eased to 3.3%.
However, markets remain concerned that renewed volatility in oil prices could reignite inflation. Escalating tensions between the United States and Iran continue to threaten global energy supplies, with Washington launching new strikes against Iran following missile attacks on US forces. Iran has also rejected a proposal regarding shared oversight of the Strait of Hormuz, while Saudi Arabia is leading efforts to secure critical shipping routes against Houthi attacks. These developments have heightened fears of a broader regional conflict and helped support crude oil prices.
As a result, investors worry that higher energy costs could revive inflationary pressures and push the Fed toward a more hawkish policy stance. According to market pricing, traders still see a strong probability of at least one additional Fed rate hike before year-end. Elevated Treasury yields and renewed US Dollar strength continue to reduce the appeal of Gold, although the metal remains trapped within its multi-week trading range as investors await fresh catalysts for a decisive move.
Daily Price Chart of Gold (XAU/USD)
From a technical standpoint, Gold remains trapped within a month-long trading range that can still be viewed as a bearish consolidation pattern following its breakdown below the 200-day Simple Moving Average (SMA). While downside risks remain dominant, momentum indicators present a mixed picture. The MACD histogram has retreated from recent peaks but continues to hold in positive territory, while the Relative Strength Index (RSI) remains slightly below the neutral 50 level, suggesting a modest recovery attempt within an overall bearish environment.
On the upside, resistance is seen near the upper boundary of the current range around $4,175, followed by the key psychological level at $4,200. A decisive break above these barriers could trigger further gains toward the 200-day SMA at $4,490.81. A sustained move beyond this level would be needed to weaken the broader bearish outlook and support a stronger recovery.
On the downside, immediate support is located in the $3,976–$4,000 region, an area that previously attracted buying interest and helped stabilize prices. A break below this zone could reinforce bearish momentum and expose Gold to deeper losses.
WTI crude oil extended its losses during the early European session on Friday, falling nearly 2.6% on the day to trade around $80.50 per barrel. The decline was driven by profit-taking after recent gains and signs of increased oil tanker activity through the Strait of Hormuz, easing concerns over potential supply disruptions.
Market sentiment was also influenced by ongoing geopolitical tensions in the Middle East. Iran’s Parliament Speaker warned that the United States would “pay the price” for the deaths of Iranian civilians, highlighting the risk of further escalation in the region. Despite these tensions, improving shipping flows through the key oil transit route weighed on crude prices and limited support from geopolitical risk premiums.
West Texas Intermediate (WTI) crude oil traded near $80.50 per barrel during Friday’s early European session, retreating as investors locked in profits following the previous day’s strong rally despite persistent geopolitical tensions in the Middle East.
The decline was also fueled by signs of improving oil flows through the Strait of Hormuz. Shipping activity has increased in recent days, with the US reporting that its navy helped escort tankers through the strategic waterway. Data from Kpler showed that 14 commodity vessels passed through the Strait on Wednesday, a notable increase from the single-digit traffic levels recorded last week, easing some concerns over supply disruptions.
Nevertheless, escalating tensions in the region continued to provide underlying support for oil prices. Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned that the United States would “pay the price” for the deaths of Iranian civilians. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) announced strikes on US military bases in Kuwait, Jordan, and Bahrain in response to US attacks on a facility located on Iran’s Qeshm Island. The IRGC also reiterated that the Strait of Hormuz would remain closed and vowed retaliation against what it described as aggressors.
Additional support came from stronger-than-expected US inventory data. The US Energy Information Administration (EIA) reported that crude oil stockpiles fell by 7.167 million barrels in the week ending July 24, significantly exceeding market expectations for a 2.5 million-barrel draw. This followed a 2.011 million-barrel increase recorded in the previous week, highlighting robust demand conditions.
Looking ahead, market participants are closely watching the upcoming OPEC+ meeting on August 2. Analysts at ING anticipate the group will approve another production increase of approximately 188,000 barrels per day for September. Such a move would complete the reversal of the 1.65 million barrels per day in voluntary production cuts introduced in 2023. However, reports suggest OPEC+ may halt further supply increases after September, indicating a more measured approach to future output policy.
WTI crude oil extended its decline to around $82.80 during Thursday’s early Asian trading session. Despite escalating tensions in the Middle East, which have heightened concerns over potential supply disruptions and could provide support for oil prices, bearish pressure remains in place. Meanwhile, data from the U.S. Energy Information Administration (EIA) showed that U.S. crude stockpiles dropped by 7.167 million barrels last week, signaling tighter supply conditions.
WTI Falls Below $83.00 as Profit-Taking Offsets Middle East Supply Risks
West Texas Intermediate (WTI) crude oil traded near $82.80 during Thursday’s Asian session, extending losses as traders locked in profits following the Federal Reserve’s latest policy decision. The Fed left interest rates unchanged at 3.5%–3.75%, in line with expectations, while Chair Kevin Warsh reiterated the central bank’s commitment to returning inflation to its 2% target without signaling the future path of monetary policy.
Despite the decline, escalating geopolitical tensions in the Middle East continue to provide underlying support for oil prices. President Donald Trump warned that the United States would retaliate against Iran after a recent attack on a U.S. military installation in Jordan. Overnight, Iranian forces reportedly launched ballistic missiles at a U.S. airbase and command center in Jordan, though all were intercepted. At the same time, U.S. and Saudi forces resumed strikes against Iran-backed militias in Iraq after a brief pause in hostilities.
Additional concerns stem from the Red Sea region, where Yemen’s Iran-aligned Houthi movement is reportedly considering charging commercial vessels passing through the strategically important Bab el-Mandeb Strait, a key route connecting the Red Sea and Gulf of Aden. Such measures could further disrupt global energy shipments and tighten supply conditions.
Supporting the broader oil market, U.S. crude inventories posted a much larger-than-expected drawdown. Data from the Energy Information Administration (EIA) showed stockpiles fell by 7.167 million barrels in the week ending July 24, reversing the previous week’s 2.011 million-barrel increase and significantly exceeding forecasts for a 2.5 million-barrel decline.
Meanwhile, Brent crude also came under pressure after the United States extended its pause on direct strikes against Iran. According to Rabobank strategist Benjamin Picton, Brent futures dropped nearly 5% as President Trump emphasized a preference for diplomacy, describing the current pause as an opportunity for “very deep talks” with Tehran, while warning that negotiations would need to progress quickly.
Gold remains unable to establish a sustained move above the $4,100 mark amid unfavorable fundamental conditions. Rising tensions between the United States and Iran, coupled with growing expectations of additional Federal Reserve rate hikes, continue to strengthen the US Dollar and limit upside momentum for the precious metal. Meanwhile, the technical outlook remains bearish, indicating that the path of least resistance for Gold prices is still to the downside.
Gold (XAU/USD) extends its recovery for a second consecutive session on Thursday, although gains remain limited as the metal continues to trade below the $4,100 level and stays within the previous day’s range during Asian trading hours. A modest rebound in the US Dollar (USD) following its post-FOMC decline is acting as a headwind for Gold. At the same time, escalating US-Iran tensions are fueling inflation concerns, reinforcing expectations that the US Federal Reserve (Fed) could still raise interest rates later this year. These factors continue to support the USD and weigh on the appeal of non-yielding assets such as Gold.
As expected, the Fed left interest rates unchanged at the conclusion of its two-day policy meeting on Wednesday. However, the central bank stopped short of delivering a more hawkish message, triggering weakness in the USD and helping Gold climb to its highest level of the week. Nevertheless, the decision was accompanied by three dissenting votes favoring a 25-basis-point increase. Markets also continue to anticipate at least one additional rate hike before year-end as inflation risks evolve amid volatile energy prices.
Analysts at TD Securities noted that precious metals have struggled under increasingly hawkish Fed expectations. The firm believes renewed strength in oil markets is likely to reinforce this trend, as higher energy costs could sustain inflationary pressures and strengthen the case for tighter monetary policy. As a result, Gold and other precious metals remain vulnerable to further downside pressure.
Oil prices continue to be driven primarily by escalating geopolitical tensions between the US and Iran, particularly around key maritime routes such as the Strait of Hormuz and the Bab el-Mandeb. The situation intensified after US forces carried out strikes against Iran following Iranian missile attacks on American military positions in the Middle East earlier this week. Additional joint US-Saudi operations targeting Iran-backed groups in Iraq have heightened fears of a broader regional conflict. Meanwhile, reports that Yemen’s Houthi forces may impose fees on commercial shipping through the southern Red Sea have added to concerns over global trade and energy flows.
These developments have compounded worries over potential disruptions to global oil supplies, contributing to a sharp rise in crude prices. The resulting increase in energy-driven inflation expectations has strengthened arguments for further Fed tightening. Investors are now focused on upcoming US economic data, including the Advance Q2 GDP report and the Personal Consumption Expenditures (PCE) Price Index, which could provide fresh insight into the Fed’s policy outlook. The results are expected to influence both the US Dollar and the next major move in Gold prices.
XAU/USD Daily Price Chart
From a technical standpoint, Gold’s price action over the past several weeks continues to resemble a bearish consolidation pattern following its breakdown below the 200-day Simple Moving Average (SMA). Despite the recent rebound from levels below $4,000, the broader technical structure suggests that sellers still retain the upper hand, keeping the overall bias tilted to the downside.
Momentum indicators present a mixed picture. The Moving Average Convergence Divergence (MACD) has crossed into positive territory, signaling an improvement in near-term momentum. However, the Relative Strength Index (RSI) remains below the neutral 50 mark, hovering around 48, indicating that bullish conviction is still lacking and that upside attempts may remain limited.
As a result, any further recovery is likely to encounter resistance near the upper boundary of the established trading range, with the $4,200 level acting as an important near-term hurdle. A decisive breakout above this zone could open the door for a stronger advance toward the 200-day SMA at $4,490.80, a critical technical barrier that bulls must reclaim to confirm a more sustainable bullish trend.
On the downside, initial support is located around the recent swing-low region between $3,976 and $4,000, where buying interest previously helped stabilize prices. Unless Gold can break convincingly above the 200-day SMA, any rallies are likely to be viewed as corrective moves within a broader consolidation phase that continues to favor bearish risks.
Silver came under pressure after three members of the Federal Open Market Committee (FOMC) opposed the consensus decision and favored an interest rate increase. Despite mounting inflation risks linked to escalating tensions in the Middle East, the Federal Reserve opted to keep rates unchanged at 3.5%–3.75%. Meanwhile, geopolitical concerns intensified after President Trump vowed a forceful military response to Iran’s missile strike on US forces stationed in Jordan.
Silver prices (XAG/USD) edged lower during Thursday’s Asian session, slipping to around $57.90 per troy ounce after posting modest gains a day earlier. Nevertheless, the precious metal continues to find support from the Federal Reserve’s latest policy decision and expectations that other major central banks will also maintain a cautious approach to monetary policy.
At its July meeting, the Federal Reserve left interest rates unchanged at 3.50%–3.75%, despite rising inflation concerns linked to renewed tensions in the Middle East. The decision helped support silver prices, as stable interest rates reduce the opportunity cost of holding non-yielding assets. Investors also expect both the Bank of England (BoE) and the Bank of Japan (BoJ) to keep rates unchanged while remaining vigilant about inflation risks.
However, divisions emerged within the Federal Open Market Committee (FOMC). Lorie Logan, Beth Hammack, and Neel Kashkari voted against the majority decision, arguing for a 25-basis-point rate hike. During the post-meeting press conference, Fed Chair Kevin Warsh maintained a hawkish tone, emphasizing that the central bank remains fully committed to returning inflation to its 2% target, even though it will not provide explicit guidance on future rate moves.
The Fed’s policy statement received a 7.4/10 score on the FXS Speechtracker, significantly above its historical average of 4.9/10, reflecting a distinctly hawkish stance. By keeping rates steady while highlighting persistent inflation, resilient economic growth, and strong investment activity, policymakers signaled confidence in the economy and a continued focus on price stability. The 9–3 vote split, with three officials favoring tighter policy, further reinforced expectations that the Fed retains a tightening bias, which could support the US Dollar over the medium term.
Similarly, the FXS Fed Sentiment Index remained elevated at 128.64, indicating that the overall policy outlook continues to favor restrictive monetary conditions. The combination of a strong sentiment reading and a hawkish policy statement suggests that any pullbacks in the US Dollar may remain limited, particularly against major currencies such as the euro and yen.
Meanwhile, geopolitical developments in the Middle East remain a key market driver. President Donald Trump vowed a strong response following a recent attack on US forces in Jordan, while diplomatic negotiations remain deadlocked. The main obstacle continues to be Tehran’s insistence on maintaining control over the strategically important Strait of Hormuz, adding further uncertainty to the global economic outlook.
Bitcoin’s recent decline appears to have been driven primarily by excessive leverage being flushed out of the market rather than any deterioration in the cryptocurrency’s underlying fundamentals.
Despite the sharp price drop, key on-chain metrics and broader market indicators suggest that Bitcoin’s long-term outlook remains largely intact. Network activity, investor participation, and overall demand have not shown signs of significant weakness. Instead, the selloff was largely triggered by an unwinding of heavily leveraged positions.
As Bitcoin fell below critical support levels, a wave of forced liquidations swept through the derivatives market. Leveraged long positions were automatically closed, creating additional selling pressure and accelerating the decline. This type of cascading liquidation is common in highly leveraged markets and often amplifies price movements beyond what fundamentals alone would justify.
Data from the derivatives market indicates that leveraged traders absorbed the bulk of the losses. This suggests that the correction was more technical in nature than a reaction to negative developments affecting Bitcoin’s intrinsic value or long-term adoption prospects.
Historically, large liquidation events have served as a market reset, removing excessive speculation and reducing leverage to healthier levels. Once this process is complete, prices tend to stabilize and become more closely aligned with actual supply-and-demand dynamics.
As a result, the recent downturn may be better viewed as a leverage-driven correction rather than a sign of weakening fundamentals. While short-term volatility remains elevated, the broader foundation supporting Bitcoin appears largely unchanged.
Why Gold Is Falling Even as Middle East Tensions Drive Oil Higher
Brent crude surged above $100 per barrel last week, largely due to disruptions in two of the world’s most critical energy chokepoints. Tanker traffic through the Strait of Hormuz—a narrow passage that previously handled around 20% of global seaborne oil shipments—has nearly ground to a halt. Daily vessel transits have plunged from roughly 80 before the conflict to as few as 25.
At the same time, Iran is expanding pressure through its Houthi allies in Yemen, raising concerns about potential disruptions at the Bab el-Mandeb Strait, the southern gateway to the Red Sea. Any attack there could jeopardize approximately 4.5 million barrels of oil per day and disrupt Europe-Asia shipping routes, forcing vessels to take the far longer journey around Africa’s Cape of Good Hope.
Meanwhile, the U.S. Strategic Petroleum Reserve has fallen to its lowest level since 1983. Following the release of up to 172 million barrels earlier this year to contain fuel prices, traders are increasingly concerned that the reserve is approaching operational limits where further withdrawals become difficult.
Why Gold Hasn’t Benefited From the Conflict
Traditionally, gold thrives during geopolitical crises, making its recent weakness surprising to many investors. Instead of rallying, gold has remained near $4,000 an ounce—well below its January peak of around $5,600 and roughly 20% lower than levels seen when the Iran conflict escalated earlier this year.
The primary reason is that rising oil prices are fueling inflation concerns, which in turn are pushing bond yields and interest-rate expectations higher. Higher yields increase the opportunity cost of holding gold because the metal does not generate income.
This relationship has been evident in bond markets. The U.S. 10-year Treasury yield climbed to 4.71% last week, its highest level since January 2025, while German government bond yields reached levels not seen since 2011. With both the Federal Reserve and the Bank of England expected to maintain a hawkish stance, investors are increasingly pricing in the possibility of higher rates for longer.
Historically, real interest rates have been one of the most important drivers of gold prices. When real yields rise, gold often struggles because investors can earn more attractive returns from interest-bearing assets.
China’s Central Bank Is Buying the Dip
Despite gold’s correction, China continues to accumulate the metal aggressively. The People’s Bank of China added 15 tonnes of gold in June, its largest monthly purchase since October 2023, extending its buying streak to 20 consecutive months.
More importantly, China’s purchases have accelerated as prices have declined. The country acquired 40 tonnes during the first half of 2026, even as gold fell nearly 30% from its January record high. Analysts estimate Chinese purchases totaled roughly $5.7 billion during the period, significantly exceeding the pace of buying seen in 2025.
This suggests Beijing may view the recent weakness as a strategic opportunity rather than a reason to reduce exposure.
The Long-Term Bull Case Remains Intact
Hedge fund veteran John Paulson recently argued that the secular bull market in gold is still in its early stages. His thesis centers on declining confidence in fiat currencies and the growing role of gold as a reserve asset.
According to Paulson, as governments continue expanding debt and deficits, gold’s appeal as a store of value could strengthen over time, potentially elevating its role in the global financial system.
Gold Miners Are Generating Exceptional Cash Flow
Even with gold trading near $4,000 an ounce, mining companies remain highly profitable. Average gold prices have hovered around $4,700 in 2026, while industry all-in sustaining costs generally remain below $2,000 per ounce.
That margin is translating into record free cash flow, stronger balance sheets, rising dividends, and increased share buybacks. Major producers such as Newmont, Barrick, Agnico Eagle, and Kinross Gold are expected to continue returning significant capital to shareholders.
Newmont recently reported a record $2.2 billion in free cash flow during the second quarter while producing approximately 1.3 million ounces of gold and increasing shareholder distributions.
Investors Remain Underexposed to Gold
Despite years of strong performance, gold still represents only a small percentage of most investment portfolios. With prices significantly below their January highs, some investors may view the current pullback as an opportunity to gradually build exposure.
A disciplined allocation of 5% to 10% of a portfolio, combined with regular rebalancing, remains a common strategy for gaining exposure without attempting to time geopolitical events or commodity markets.
In the short term, higher interest rates are weighing on gold even as geopolitical risks intensify. Over the longer term, however, continued central-bank buying, fiscal concerns, and strong fundamentals for miners continue to support the broader investment case for the precious metal.
The US goods trade deficit narrowed to $101.5 billion in June, down from $105.9 billion in May. Goods exports declined by $3.8 billion to $204.7 billion, while imports fell by $8.2 billion to $306.2 billion.
Tariff Front-Running and the Subsequent Pullback
In late 2024 and early 2025, companies accelerated imports to get ahead of President Trump’s reciprocal tariffs, leading to a sharp surge in inbound shipments. Later, through the second half of 2025 and into early 2026, imports moderated as businesses worked through elevated inventories accumulated during that earlier rush.
Despite the recent decline in imports, the current goods trade deficit remains larger than every monthly reading between June 2022 and March 2025 except one. The data suggest that tariffs have not delivered a lasting reduction in the trade deficit, with the gap now broadly back to where it stood before the tariff-driven distortions—and potentially slightly wider.
Goods Exports and Imports
The rise in both exports and imports largely reflects higher prices driven by inflation rather than a meaningful increase in real trade activity. While the nominal value of trade has expanded, there has been little improvement in the overall trade balance, as imports have continued to outpace exports. As a result, the growth in trade flows has not translated into a sustained narrowing of the goods trade deficit.
Balance of Trade in Goods and Services
The advance trade figures cover goods only, while the broader goods-and-services data are available through May 2026.
Between July 2021 and May 2026, the US services trade surplus increased from $19.1 billion to $28.9 billion, an improvement of roughly $9.8 billion. Without this stronger services surplus, the overall goods-and-services trade deficit would stand at approximately $87.3 billion rather than $77.6 billion.
The data indicate that tariffs have not meaningfully reduced US trade deficits, though they have contributed to higher costs for consumers and businesses.
Why Tariffs Are Unlikely to Eliminate Trade Deficits
Tariffs are unlikely to resolve trade deficits unless they significantly weaken demand, such as during an economic downturn. Historical trade data show that the most substantial reductions in US trade deficits have occurred during recessions, when consumer spending and imports contract sharply.
Trade Deficits: A Symptom, Not the Root Cause
Trade deficits are better viewed as a symptom of broader economic forces rather than the core problem itself. One key factor is the absence of strong constraints on federal fiscal spending. Following President Richard Nixon’s decision on August 15, 1971, to end the dollar’s convertibility into gold, the US monetary system entered a new era.
Combined with the US dollar’s role as the world’s primary reserve currency, this shift enabled American consumers to become the global economy’s consumers of last resort. At the same time, government deficit spending faced fewer practical constraints. Over subsequent decades, both credit growth and fiscal deficits expanded significantly, contributing to persistent trade imbalances that tariffs alone are unlikely to address.
Total Credit Market Debt Owed vs. GDP
The numbers highlight the scale of debt accumulation in the US economy:
Total Credit Market Debt Owed (TCMDO): $115.6 trillion
Nominal GDP: $31.9 trillion
Real GDP: $24.2 trillion
Critics of the post-1971 monetary system argue that President Richard Nixon’s decision to suspend the dollar’s convertibility into gold removed a key constraint on the expansion of money, credit, government debt, and trade deficits. Although the measure was presented as temporary, the suspension became permanent, fundamentally reshaping the global monetary system.
The Nixon Shock and the Reserve Currency Effect
In 1971, Nixon appointed John Connally as Treasury Secretary. During growing international concerns about inflation and the weakening dollar, Connally famously told European officials that the dollar was “our currency, but your problem.”
As US money supply growth accelerated, several countries began distancing themselves from the Bretton Woods framework. West Germany and Switzerland moved away from the system, while foreign governments increasingly sought to exchange dollars for gold. On August 15, 1971, Nixon closed the so-called “gold window,” ending the ability of foreign governments to redeem dollars for gold. He also imposed a 90-day freeze on wages and prices in an effort to curb inflation.
At the time, the move was widely applauded. Financial markets rallied, and many viewed the decision as a necessary response to inflation and exchange-rate pressures. However, what was announced as a temporary measure evolved into a permanent shift away from the Bretton Woods system.
A World Without the Gold Constraint
According to this perspective, the end of gold convertibility made it easier for the US government to finance deficits and debt expansion. Military spending, fiscal stimulus, and other government expenditures could be funded without the discipline previously imposed by a gold-backed monetary framework.
Former Federal Reserve Chair Paul Volcker later expressed concern about the collapse of Bretton Woods, famously remarking that “nobody’s in charge” of the international monetary system.
Why Trade Deficits Persist
Proponents of the “reserve currency curse” theory argue that as long as the US dollar remains the world’s dominant reserve currency, the United States will continue to run sizable trade deficits. Global demand for dollars encourages capital inflows into the US, supporting consumption and imports while making it difficult to achieve a sustained trade surplus.
From this viewpoint, tariffs are unlikely to eliminate trade deficits because the underlying drivers are structural: reserve-currency status, persistent fiscal deficits, rising debt levels, and strong domestic consumption. Historically, the most significant reductions in US trade deficits have occurred during recessions, when demand and imports contract sharply.
The result, critics contend, is that tariffs may raise costs for consumers and businesses without materially changing the long-term trajectory of US trade balances.
US Dollar bulls stay cautious ahead of the highly anticipated FOMC policy announcement later on Wednesday.
Ongoing geopolitical tensions continue to support demand for the safe-haven US Dollar.
A rebound in oil prices has reignited inflation concerns and strengthened expectations of further Fed tightening, lending support to the greenback.
The US Dollar Index (DXY), which measures the Greenback against a basket of major currencies, is trading in a narrow range below the 101.50 mark during Wednesday’s Asian session as investors await the outcome of the Federal Reserve’s two-day FOMC meeting. Despite the consolidation, the index remains supported near a one-month high reached on Tuesday and continues to exhibit a constructive bias amid ongoing geopolitical tensions.
Market sentiment shifted after Iran’s Islamic Revolutionary Guard Corps (IRGC) launched multiple ballistic missiles at US military positions in the Middle East late Tuesday. Adding to the uncertainty, President Donald Trump reiterated that Washington is prepared to resume strong military action against Iran if diplomatic efforts fail to quickly resolve the crisis. These developments have heightened concerns about a renewed escalation in the region, boosting demand for the safe-haven US Dollar.
At the same time, the latest Middle East tensions have triggered a sharp rebound in crude oil prices, reigniting worries about inflation and increasing speculation that the Federal Reserve could raise interest rates again. This backdrop is likely discouraging traders from taking aggressive bearish positions on the DXY, though gains remain limited ahead of the Fed’s policy announcement later in the day.
Investors are primarily focused on the Fed’s guidance regarding future monetary policy, which is expected to be the next major catalyst for the US Dollar. Analysts at DBS note that markets remain “highly cautious” ahead of the FOMC decision, despite the recent pullback in oil prices following a temporary easing of US-Iran hostilities. According to the bank, traders are still pricing in roughly a 34% probability of a rate hike at this meeting and nearly 100% odds of a hike in September, highlighting expectations that the Fed may resume tightening even as some geopolitical risk premium in energy markets has faded.
WTI crude draws strong buying interest following Iran’s ballistic missile strikes on US military personnel.
President Trump cautioned that military action could resume should talks with Iran fail to produce an agreement.
Ongoing concerns over potential supply disruptions continue to underpin crude oil prices and provide additional upside support.
WTI rebounds sharply on renewed Middle East tensions, climbing nearly 4% on Wednesday after hitting a more than two-week low in the previous session. The US benchmark crude oil price trades around the mid-$81.00s during Asian trading, snapping a three-day losing streak as fears grow over a potential resurgence of US-Iran hostilities.
The latest escalation came after Iran’s Islamic Revolutionary Guard Corps (IRGC) launched multiple ballistic missiles at US military forces across the Middle East on Tuesday. At the same time, US President Donald Trump renewed his warning that military action could resume if diplomatic efforts with Tehran fail. In an interview with Fox News, Trump stated that the US could strike critical Iranian infrastructure, including major bridges and power facilities, should negotiations break down.
Further fueling concerns, US Central Command reported that American and Saudi forces carried out coordinated strikes against Iran-backed militants in Iraq. The renewed escalation, coupled with ongoing tensions over the Strait of Hormuz, has prompted traders to factor a geopolitical risk premium into oil markets, helping drive crude prices higher. Shipping activity through the crucial waterway has already declined significantly after Iran attacked several vessels earlier this month.
Additional support for oil prices comes from the Iran-backed Houthi movement, which recently announced a naval blockade targeting Saudi Arabia in the Red Sea, opening a new front in the months-long conflict. The move has intensified fears of disruptions to global energy supplies. Meanwhile, a weaker US Dollar is providing an extra tailwind for dollar-denominated commodities, reinforcing the bullish tone ahead of the Federal Reserve’s policy announcement.
Gold remains under pressure as oil prices rebound after the US intercepted Iranian missiles, reigniting geopolitical tensions in the Middle East and fueling inflation worries. Meanwhile, uncertainty surrounding the Federal Reserve’s upcoming policy decision remains unusually elevated, with some market participants still anticipating additional rate hikes. Traders currently assign a 76.6% probability to a September rate increase, supporting expectations for higher borrowing costs and weighing on bullion demand.
Gold prices (XAU/USD) remain under pressure for a second consecutive session, hovering near $4,020 per ounce during Wednesday’s Asian trading. The precious metal is weighed down by a rebound in oil prices after renewed conflict in the Middle East reignited geopolitical concerns, prompting investors to reassess inflation risks and the outlook for interest rates.
Tensions escalated after Iran launched several ballistic missiles at a US military base in Jordan at around 5:45 p.m. ET, targeting American forces stationed in the region. US military officials reported that all missiles fired by the Islamic Revolutionary Guard Corps (IRGC) were successfully intercepted, according to official statements and released footage. The attack is widely viewed as retaliation for recent US operations against Iranian naval assets.
Attention now turns to the Federal Reserve’s policy announcement, with policymakers broadly expected to keep interest rates unchanged. However, uncertainty remains elevated despite persistent pressure from US President Donald Trump for lower borrowing costs. Markets currently assign a 30.5% probability to an unexpected rate hike at this meeting, an unusually high level of uncertainty ahead of a Fed decision. Looking beyond this week, traders are pricing in a 76.6% chance of a rate increase in September, reinforcing expectations that interest rates may stay higher for longer and limiting the appeal of non-yielding assets such as gold.
USD/JPY remains below the 164.00 mark after last week’s rally stalled just shy of that psychological level, leaving the pair at its strongest level against the Japanese Yen since 1986.
Japan’s authorities spent a record ¥11.73 trillion intervening in April and May to support the Yen—nearly twice the size of the previous record effort. Despite the massive defense, the protected exchange-rate level was breached within six weeks.
Attention now turns to Friday’s packed schedule, which will feature the Bank of Japan’s policy decision, the release of its quarterly Outlook Report, and the Finance Ministry’s monthly intervention data, all arriving in the same trading session.
USD/JPY Outlook: Tokyo Can Still Defend the Yen, but Its Options Are Narrowing
The Japanese Yen edged slightly higher on Monday, with USD/JPY slipping 0.05% while remaining just below the 164.00 level after last week’s rally stalled a mere ¥0.01 short of the mark. Investors have spent the past two weeks wondering whether Japanese authorities will step in again—and whether they can still afford to do so. The issue, however, is not a shortage of funds but a shortage of effective policy options.
Japan Has Plenty of Dollars, but Limited Flexibility
Japan’s foreign-exchange reserves stand at roughly $1.3 trillion, second only to China globally. However, around $1.1 trillion is invested in foreign securities—primarily U.S. Treasury bonds—which cannot be sold quickly without disrupting markets and potentially locking in losses.
The country’s readily deployable reserves are estimated at $150–180 billion in cash deposits held at the Bank of Japan and other central banks. In addition, Japan maintains a Federal Reserve swap line worth up to $120 billion. Based on the average size of previous interventions, analysts estimate Japan could still conduct roughly 30 more operations if necessary. The real limitation is therefore not financial capacity.
A Record Intervention Delivered Only Temporary Relief
After USD/JPY broke above 160.00 in April, Japan’s Ministry of Finance spent a record ¥11.73 trillion (around $73 billion) intervening in April and May. The effort was nearly twice as large as any previous intervention campaign.
Despite the scale of the operation, the market erased its impact within six weeks, with USD/JPY not only reclaiming the defended level but advancing roughly four yen beyond it. The episode highlighted how difficult it is to reverse a strong market trend without supportive economic fundamentals.
IMF Rules Create Another Constraint
A lesser-known challenge comes from international classification rules. The International Monetary Fund generally considers a currency “freely floating” only if official interventions remain limited and infrequent over a rolling period.
Analysts estimated earlier this year that Japan may have room for only a few additional interventions before risking scrutiny over its free-floating status. In other words, Tokyo’s ability to defend the Yen may be constrained more by policy credibility and international standards than by available cash.
Monday’s Market Action Highlighted the Yen’s Weakness
The Yen’s muted reaction to a sharp decline in oil prices underscored the currency’s structural challenges. Crude oil plunged nearly 9% following easing tensions between Washington and Tehran—a development that should significantly benefit energy-importing Japan.
Yet the Yen gained less than ¥0.10 against the U.S. Dollar.
This suggests that factors beyond energy costs are driving the currency. Although the U.S.-Japan yield gap has narrowed by roughly 40 basis points from its cycle extremes, the Yen has continued to weaken. Rising domestic inflation expectations and persistent capital outflows appear to be offsetting the impact of narrowing rate differentials.
Meanwhile, verbal intervention from Japanese officials has continued, but markets are increasingly ignoring such warnings.
A Critical Week for USD/JPY
Tokyo’s relative silence may be strategic. Currency intervention tends to be most effective when it aligns with broader market forces, and this week’s calendar could provide such an opportunity.
The key event arrives on Wednesday, when the Federal Reserve announces its policy decision. Markets largely expect rates to remain unchanged at 3.75%, though some investors still see a possibility of a surprise hike.
Japan’s data releases follow shortly afterward:
Thursday: Tokyo CPI, unemployment, and retail sales data.
Friday: Bank of Japan policy decision, Outlook Report, and Governor press conference.
Friday: Ministry of Finance intervention statistics for July, which could reveal whether authorities have already entered the market.
While the consensus expects the BoJ to keep rates unchanged at 1.00%, some reports suggest policymakers are becoming increasingly concerned that Yen weakness is adding inflationary pressure, potentially opening the door to a faster tightening cycle.
Key USD/JPY Levels
Resistance
164.00 remains the crucial barrier.
Above that, there is little historical chart structure, leaving 164.50 and 165.00 as the next psychological targets.
Support
163.00 is the first important support level.
162.50 follows below.
The rising 50-day EMA near 161.50 remains the key trend support.
Outlook
The broader trend remains bullish while USD/JPY holds above 163.00. However, the primary risk to further gains is not economic data or technical factors but potential official action from Japanese authorities. The period immediately following Wednesday’s Federal Reserve decision could prove especially important, as it offers the most favorable backdrop for any surprise intervention or policy shift.
Silver prices could find support as renewed US-Iran peace negotiations ease oil prices and reduce concerns over further interest-rate hikes. Former US President Donald Trump cautioned that military action against Iran could resume if diplomatic efforts fail. Meanwhile, markets widely expect the Federal Reserve to leave rates unchanged at this week’s meeting, with any potential rate increase likely postponed until September.
Silver prices (XAG/USD) retreated during Tuesday’s Asian session after posting gains of nearly 0.5% in the previous trading day, slipping toward the $57.50-per-ounce area. Despite the decline, the precious metal could find support as easing tensions between the United States and Iran continue to weigh on oil prices, helping to reduce inflation concerns and dampen expectations for further interest-rate increases.
Market sentiment improved after US President Donald Trump stated that Washington is engaged in constructive discussions with Iran aimed at resolving the Middle East conflict. However, he warned that military operations could resume if diplomatic efforts fail. His comments followed a pause in US airstrikes late last week after nearly two weeks of conflict, while Iran also halted retaliatory attacks on US military facilities in neighboring countries.
The United States has now gone three consecutive days without launching new strikes after suspending its 13-night military campaign. Meanwhile, Iran’s Foreign Ministry denied that direct negotiations with Washington are underway, emphasizing that its ongoing discussions are limited to Oman and focus on the future of the Strait of Hormuz.
Investors are now closely watching this week’s Federal Reserve policy meeting. The Fed is broadly expected to leave interest rates unchanged, although persistent inflation pressures have prompted a small group of traders to consider the possibility of an immediate hike. Nevertheless, the dominant market view remains that any further tightening would more likely be postponed until September.
Gold (XAU/USD) falls below the $4,050 mark during Tuesday’s Asian trading session, erasing the bullish gap formed at the start of the week. Ongoing geopolitical tensions continue to support demand for the US Dollar, creating headwinds for the precious metal. However, further losses may be limited as traders remain cautious and refrain from taking aggressive USD positions ahead of the highly anticipated FOMC policy decision.
Gold (XAU/USD) extends its decline after failing to sustain momentum above the $4,100 level in the previous session, slipping below $4,050 during Tuesday’s Asian trading hours. Despite the weakness, further downside may be restrained as US Dollar buyers remain cautious ahead of the Federal Reserve’s closely watched two-day FOMC meeting. Investors are looking for fresh guidance on the Fed’s future policy direction, which is expected to influence USD demand and determine the next major move for the non-yielding precious metal.
Ahead of the Fed decision, markets scaled back expectations of further rate hikes as renewed diplomatic efforts between the United States and Iran raised hopes of ending a conflict that has lasted for five months. The optimism contributed to a sharp decline in oil prices overnight and helped ease inflation concerns. The US recently suspended its military strikes on Iran after nearly two weeks of attacks, while President Donald Trump stated on Monday that discussions with Tehran were progressing positively and that a potential resolution remained possible. These developments fueled expectations that both sides could return to negotiations, potentially restoring stability to Middle Eastern energy supplies.
Nevertheless, geopolitical risks remain elevated. Trump cautioned that military action could resume if diplomatic efforts fail. At the same time, reports of drone attacks in Saudi Arabia, Jordan, and Iraq tempered market optimism. Concerns over global energy supply disruptions continue to support both crude oil prices and the safe-haven US Dollar. Attention has also shifted to the Bab el-Mandeb Strait after Yemen’s Iran-backed Houthi forces announced a maritime blockade targeting Saudi Arabia and launched attacks on oil infrastructure along the Red Sea coast. Meanwhile, shipping activity through the Strait of Hormuz remains constrained.
Overall, the fundamental environment continues to favor the US Dollar, reinforcing the possibility of additional losses in Gold. However, traders are likely to avoid making large directional bets before Wednesday’s FOMC announcement. As a result, confirmation through sustained selling pressure and a decisive break below the key $4,000 psychological level may be needed before stronger bearish positions emerge in the XAU/USD market.
Daily chart of XAU/USD
Gold’s bearish technical outlook supports the potential for further downside; a decisive break below $4,000 remains in focus
Following its recent move below the 200-day Simple Moving Average (SMA), Gold’s sideways trading pattern since June 19 can still be viewed as a bearish consolidation. Technical indicators offer mixed signals. The Relative Strength Index (RSI) remains slightly below the neutral 50 level, hovering around 45, reflecting weak buying momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) continues to rise in positive territory, suggesting that any near-term recovery is likely corrective rather than the start of a broader uptrend, provided Gold remains below its long-term average.
Despite occasional rebounds, the precious metal remains susceptible to additional losses unless buyers successfully defend support near the psychologically important $4,000 level. On the upside, resistance is seen at the upper end of the current trading range around $4,200. A daily close above this threshold would be required to weaken the prevailing bearish outlook and pave the way for a more sustained rally toward the 200-day SMA at $4,493.65.
Bitcoin continues to trade above its 50-day EMA at $65,089 on Monday, extending its rally with a fourth straight week of gains.
Ethereum has secured a close above the 100-day EMA at $1,934, reinforcing a bullish technical outlook.
XRP remains steady around $1.10, with momentum indicators suggesting a modest bullish bias.
Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) kicked off the week on solid footing after posting weekly gains of more than 1%, 4%, and 1%, respectively. BTC secured its fourth consecutive weekly advance by reclaiming a key technical level, ETH reinforced its bullish outlook with a close above its 100-day EMA, while XRP remained stable near $1.10 despite continuing to trade below major long-term moving averages.
Bitcoin outlook: Bulls regain momentum above the 50-day EMA
Bitcoin is trading around $65,199 on Monday, maintaining a cautiously bullish tone after reclaiming its 50-day EMA at $65,089. While this suggests the recent volatility may be easing, BTC still faces notable resistance from the 100-day EMA at $67,787 and the 200-day EMA near $73,848.
Technical indicators paint a mixed but constructive picture. The RSI hovers around 54, reflecting moderate buying interest rather than overheated momentum, while the MACD remains positive despite gradually losing strength, implying that further gains could encounter resistance.
If buyers remain in control, Bitcoin’s first upside target lies at the 100-day EMA near $67,787, followed by the 200-day EMA around $73,848. A sustained breakout could open the path toward the major horizontal resistance at $84,410.
On the downside, immediate support is located at the 50-day EMA around $65,088, followed by a stronger horizontal support zone at $64,004. A decisive break below this region would weaken the current recovery and increase the risk of a deeper corrective move.
Ethereum outlook: Break above the 100-day EMA strengthens bullish case
Ethereum trades near $1,945 after climbing more than 4% last week, improving its short-term technical outlook. ETH now holds above both its 50-day EMA near $1,841 and 100-day EMA around $1,934, signaling that buyers have regained control of the medium-term trend.
Momentum indicators continue to support the positive outlook. The RSI stands near 62, indicating healthy bullish momentum without reaching overbought conditions, while the MACD remains in positive territory, reinforcing the likelihood of additional upside as long as price stays above its reclaimed moving averages.
The first upside hurdle is the psychological $2,000 level, followed by the 200-day EMA near $2,158, which represents a more significant resistance zone.
On the downside, initial support sits at the 100-day EMA around $1,934, with stronger support at the 50-day EMA near $1,841. A break below these levels would shift attention toward the broader support area near $1,385.
XRP outlook: Stabilizes near $1.10 but remains below key moving averages
XRP trades around $1.10 on Monday, showing signs of stabilization after last week’s gains. However, the token continues to trade below its 50-day, 100-day, and 200-day EMAs, which remain clustered between $1.14 and $1.43, keeping the broader technical outlook cautious.
Although the overall trend remains corrective, momentum indicators hint at improving conditions. The RSI sits close to the neutral 50 level at 49, while the MACD remains slightly positive, suggesting buyers are attempting to build momentum despite persistent overhead resistance.
The first resistance level is the 50-day EMA near $1.13, followed by the 100-day EMA at $1.22 and the horizontal barrier at $1.30. Beyond these, the 200-day EMA around $1.43 and the previous swing high near $1.90 represent stronger resistance levels.
On the downside, $1.00 remains the key psychological and technical support. A break below this level would likely invite renewed selling pressure and extend XRP’s broader corrective phase.
Gold prices traded within a narrow range over the last two sessions, but rising geopolitical uncertainty heading into the weekend could spark increased volatility when markets reopen. With the conflict between the United States and Iran showing no signs of easing, traders remain alert to the possibility of a gap at Monday’s opening.
The military confrontation intensified on Friday as U.S. forces carried out another wave of strikes against Iranian military infrastructure, including drone facilities and coastal surveillance sites, aiming to reduce threats to commercial shipping in the Strait of Hormuz. Iranian media confirmed missile strikes in several areas, while Tehran dismissed a U.S.-backed ceasefire proposal delivered through Iraqi officials, signaling that diplomatic efforts remain stalled.
The widening conflict has also fueled concerns over global energy supplies. Oil prices climbed to their highest level since May after Iran-backed Houthi forces claimed attacks on Saudi oil tankers in the Red Sea, raising fears that another key maritime route could face prolonged disruptions alongside the Strait of Hormuz.
Political uncertainty in Washington has added another layer of complexity. Although the U.S. House of Representatives passed a largely symbolic resolution urging President Donald Trump to end military operations against Iran without congressional approval, the measure is unlikely to alter current policy. Investors are now watching for any developments over the weekend that could influence market sentiment.
From a technical standpoint, Gold futures remain at an important crossroads. If prices fail to overcome the immediate resistance near $4,042, the market could open lower next week and revisit the key support level around $3,890. Conversely, a decisive break above resistance would strengthen the bullish outlook and reduce the likelihood of a deeper pullback.
With geopolitical tensions, energy market volatility, and political developments all in focus, weekend headlines are expected to play a decisive role in shaping Gold’s direction at the start of the new trading week.
Two defining trends are shaping the investment landscape in 2026: technological innovation is accelerating at an extraordinary pace, while the cost of deploying cutting-edge technologies continues to decline. As a result, breakthroughs that once took years—such as drug development—can now be achieved in a matter of months. Automation is spreading rapidly across industries, fundamentally changing how businesses operate and generate value.
At the same time, the global economy faces growing constraints, including limited power generation, critical raw materials, arable land, and electricity grid capacity. The following investment themes focus on opportunities emerging where technological progress intersects with these structural bottlenecks.
1. Global Robotics & Automation
AI is accelerating the next wave of automation
Robotics and automation remain compelling long-term investment themes, supported by persistent labor shortages, rising wage pressures, and rapid AI innovation. Investors can gain broad exposure through companies involved in industrial automation, logistics, surgical robotics, sensors, and AI-driven software.
Declining AI costs and supportive policies across the US, Europe, and China are speeding up adoption in high-value applications. Meanwhile, manufacturing activity in the US and Europe has returned to expansion territory after several years of contraction, reigniting capital spending that benefits automation providers.
Key risks include geopolitical tensions affecting supply chains, semiconductor shortages, and slower-than-expected commercialization of AI-powered robotics.
2. Space Economy
A rapidly expanding long-term opportunity
The global space economy is expected to reach approximately USD 1.8 trillion over the coming decade, driven by increasing commercial use of satellite technology and emerging concepts such as space-based data centers to support AI infrastructure.
Launch costs continue to fall thanks to reusable rocket technology. For example, refurbishment expenses have declined to roughly USD 10 million, compared with nearly USD 100 million for building new rockets, significantly improving commercial viability.
Risks include reliance on a limited number of major industry players, regulatory challenges, launch failures, and higher-than-anticipated operating costs.
3. Digital Infrastructure
The foundation of the AI revolution
Digital infrastructure has become a critical pillar of the AI economy. Demand for computing capacity continues to surge, while electricity supply and grid limitations are driving a multi-year investment cycle in data centers and supporting infrastructure.
Strong occupancy rates, long-term customer contracts, and significant barriers to entry provide attractive pricing power. Government initiatives promoting domestic AI infrastructure further strengthen the outlook. With US power-grid connection waiting times extending from four to seven years, existing facilities with available power capacity possess a significant competitive advantage.
Potential headwinds include higher interest rates reducing data-center valuations and technological shifts toward edge computing or new computing architectures that lessen demand for traditional hyperscale facilities.
4. Chinese Innovation
Government-backed leadership in future industries
China’s 15th Five-Year Plan allocates roughly USD 2 trillion toward strategic sectors, including semiconductors, artificial intelligence, advanced manufacturing, humanoid robotics, green energy, healthcare, pharmaceuticals, and urban air mobility.
These industries benefit from China’s large domestic market, strong government support, and sustained emphasis on technological innovation.
However, investors should consider risks such as US export restrictions on advanced technology, regulatory uncertainty, overinvestment in state-supported industries, and relatively weak consumer confidence.
5. Agricultural Commodities
Structural supply constraints support the outlook
Agricultural commodities are becoming increasingly attractive as supply challenges intensify. Fertilizer exports through the Strait of Hormuz have been disrupted by geopolitical tensions, while higher natural gas prices have raised production costs and encouraged farmers to reduce fertilizer usage.
These factors threaten crop yields across key agricultural products, including corn, wheat, soybeans, coffee, and cotton. Longer-term issues such as climate change, shrinking farmland, and water scarcity suggest these pressures are structural rather than temporary.
Agricultural commodities can also enhance portfolio diversification by providing inflation protection and maintaining relatively low correlation with traditional equity and bond markets.
6. The New Energy Era
Strategic materials underpin global electrification
The transition toward electrification is expected to reshape global demand for energy and essential raw materials over the coming decades. Electricity consumption by US data centers alone is projected to nearly triple by 2030, increasing from approximately 220 TWh to 600 TWh.
Nuclear power is increasingly viewed as one of the few scalable, low-carbon energy sources capable of supporting this growing demand. Meanwhile, supply constraints in copper and rare earth elements are becoming increasingly important, as both are essential for advanced technologies and clean energy systems.
Governments are treating these materials as strategic national assets through export controls and stockpiling initiatives, creating demand that is less sensitive to short-term price fluctuations.
Key risks include improvements in computing efficiency reducing electricity demand, increased mining output easing supply shortages, and delays to nuclear or grid infrastructure projects due to regulatory and permitting challenges.
7. Biotechnology
Breakthrough innovation meets rising demand from big pharma
Biotechnology is gaining strong momentum as breakthroughs across oncology, genetic disorders, mental health, and obesity treatments continue to translate into commercial success and improving profitability. Artificial intelligence is transforming the industry’s economics by significantly shortening drug discovery timelines, increasing the probability of successful development, and reducing research and development costs.
The sector is also benefiting from a major industry dynamic: large pharmaceutical companies face an estimated USD 300 billion patent cliff between 2025 and 2030, prompting them to actively acquire innovative biotech firms to replenish their product pipelines.
In addition, the policy environment has become more supportive, with reduced pressure on drug pricing and a faster FDA approval process helping bring new therapies to market more efficiently.
Key risks include renewed government efforts to lower drug prices, the reintroduction of tariffs, and regulatory disruptions at the FDA that could delay approvals and weaken revenue visibility.
8. HALO: Investing in Assets AI Cannot Replace
Real-world infrastructure with lasting value
The HALO investment theme focuses on businesses that own physical assets unlikely to be displaced by artificial intelligence. These include companies operating in energy, utilities, transportation, industrial infrastructure, and natural resources.
Their competitive advantage comes from owning essential infrastructure with long useful lives and high replacement costs rather than relying solely on software. While AI can improve operational efficiency, it cannot replicate power grids, pipelines, rail networks, or critical industrial facilities. As a result, these businesses enjoy durable barriers to entry and resilient demand.
Risks include regulatory changes that reduce utility profitability and higher interest rates that may pressure infrastructure valuations.
9. European Mid-Cap Equities
A compelling domestic growth opportunity
European mid-cap stocks are well positioned to benefit from stronger domestic economic conditions, supported by EU fiscal spending, recovering manufacturing activity, and improving credit markets.
Germany’s increased investment in infrastructure and defense provides an additional catalyst, while mid-sized companies typically respond more strongly to economic recoveries than large-cap firms. Their greater reliance on domestic revenue also makes them less vulnerable to US trade tariffs.
Valuations remain attractive, with European mid-caps trading at roughly 15 times forward earnings while offering projected earnings growth of around 15%, compared with approximately 12% for large-cap companies. This provides investors with stronger growth potential without paying a valuation premium.
Primary risks include persistently high energy prices and a stronger euro, both of which could weaken export competitiveness.
10. US Small- & Mid-Cap Dividend Growers
Combining growth with dependable income
US small- and mid-cap companies that consistently increase dividends provide exposure to financially healthy businesses benefiting from expanding domestic economic growth.
Regular dividend increases often reflect strong cash generation, healthy balance sheets, and durable earnings growth. Despite comparable growth prospects, these companies continue to trade at a notable valuation discount relative to large-cap stocks, creating room for multiple expansion.
Key risks include slower economic growth or declining corporate earnings that could weaken cash flow generation and threaten future dividend growth.
12. Short-Duration High Yield Bonds
Generating income while limiting rate risk
Short-duration high-yield bonds focus on below-investment-grade corporate debt with maturities between one and five years. This strategy allows investors to earn attractive income while reducing sensitivity to interest-rate fluctuations.
Current yields remain elevated by historical standards, while default expectations are relatively modest. A significant portion of the market consists of BB-rated bonds, representing the highest-quality segment within high-yield credit, suggesting stronger credit fundamentals than many investors expect.
The shorter maturity profile also reduces exposure to interest-rate volatility. However, investors should still consider risks such as widening credit spreads, rising defaults during economic weakness, and refinancing challenges if financing conditions tighten.
12. Catastrophe Bonds (Cat Bonds)
Diversified income with low market correlation
Catastrophe bonds are insurance-linked securities that transfer the financial risk of major natural disasters from insurers to investors. In return, investors receive floating-rate income consisting of an insurance premium and yield generated from collateral.
Because their performance depends primarily on insured catastrophe events rather than financial market movements, cat bonds typically exhibit very low correlation with stocks and bonds. Their relatively short maturities and active secondary market also make them an attractive and scalable alternative investment.
The long-term investment case is supported by a widening global insurance protection gap, strong demand for risk transfer, and attractive risk-adjusted returns. Losses are generally event-driven and can often be repriced over time rather than resulting in permanent impairment of capital.
The principal risks include multiple catastrophic events occurring within a short period, inaccuracies in catastrophe risk models, reduced market liquidity following major disasters, and lower interest rates diminishing collateral yields.
Crude oil opened Monday with a significant bearish gap as markets welcomed signs of renewed diplomatic engagement between the United States and Iran.
However, restrictions on maritime traffic through the Bab el-Mandeb Strait and the Strait of Hormuz helped cushion the decline by keeping supply concerns alive.
Given the conflicting market drivers, traders may prefer to wait for clearer direction before increasing bearish exposure.
West Texas Intermediate (WTI), the US benchmark crude oil, opened the week with a sharp bearish gap and extended its pullback from last Thursday’s seven-week high near $92.25. Although prices rebounded modestly from a four-day low reached during Asian trading, WTI remained under pressure around the $84.00 level, down nearly 6% on the day.
The decline followed signs of easing tensions between the United States and Iran. After 13 consecutive nights of strikes on Iranian targets, Washington suspended its bombing campaign late Friday, while Tehran halted retaliatory actions against US allies in the Middle East. US Ambassador to the United Nations Mike Waltz stated that President Donald Trump intends to leave room for negotiations despite military forces remaining on alert. The prospect of renewed diplomacy has encouraged traders to reduce the geopolitical risk premium previously embedded in oil prices.
However, concerns over global supply disruptions continue to provide support. Maritime traffic through the Bab el-Mandeb Strait declined on July 26 after Iran-backed Houthi forces in Yemen launched attacks on Saudi oil facilities along the Red Sea coast. These developments add to existing worries about restricted shipping through the Strait of Hormuz, a critical route for global energy exports, limiting the downside for crude prices and discouraging aggressive bearish positioning.
As a result, many investors are waiting for further developments in the Middle East before concluding that oil prices have peaked and preparing for a more sustained decline.
Analysts at Rabobank’s RaboResearch Global Economics & Markets noted that crude oil benchmarks have rallied on mounting supply concerns. According to the bank, Brent, WTI, and refined fuel products surged as disruptions in the Strait of Hormuz, escalating Russia-Ukraine attacks, outages at the Caspian Pipeline Consortium (CPC) terminal, and exceptionally tight diesel markets renewed fears of a broader supply shortage. These overlapping geopolitical and logistical challenges continue to underpin the oil market despite the recent pullback.
Gold moved higher as declining oil prices and a halt in U.S.-Iran military strikes helped ease concerns over inflation and further interest rate increases. Investors are now closely watching upcoming policy meetings from the Federal Reserve, Bank of England, and Bank of Japan, which could drive the next major market moves. Meanwhile, Iran stated that it would not launch retaliatory attacks as long as the pause in U.S. bombing operations remains in place.
Gold prices extended their advance for a second straight session on Monday, with XAU/USD trading near $4,103 per ounce during Asian trading hours. The precious metal benefited from a steep decline in oil prices, which helped ease concerns about inflationary pressures and reduced expectations of further interest rate hikes after the United States and Iran paused military hostilities over the weekend.
Market participants are now turning their focus to a packed economic calendar that could drive significant volatility across financial markets. The week features key policy meetings from the Federal Reserve, Bank of England, and Bank of Japan, along with major economic releases, including US GDP growth, US Core PCE inflation, and CPI data from both the Eurozone and Australia. These reports are expected to play a crucial role in shaping global interest-rate expectations.
Geopolitical tensions also showed signs of easing after Washington suspended its two-week bombing campaign against Iran late Friday. In response, Tehran refrained from launching retaliatory attacks against US allies in the Middle East for a second consecutive night. US Ambassador to the United Nations Mike Waltz stated that although American forces remain on high alert, President Donald Trump is allowing time for diplomatic efforts and possible negotiations.
Supporting this view, Reuters cited a senior Iranian official who reiterated Tehran’s “attack-for-attack” policy, indicating that Iran will continue to withhold military action as long as US strikes remain suspended. This temporary de-escalation has improved market sentiment and reduced demand for traditional safe-haven assets, although gold continues to find support amid lingering geopolitical uncertainty.
Silver advanced over the week but continued to struggle to break decisively above the key $60 level. This major psychological resistance remains a focal point for traders, with selling pressure re-emerging as prices approach the area.
Meanwhile, the $55 region continues to provide solid support, helping to limit downside moves. Despite the recent gains, silver remains challenged by the higher interest-rate environment, which continues to weigh on the precious metals market.
Gold
Gold followed a similar pattern, climbing toward the $4,200 area before retreating from a level that has repeatedly acted as a significant resistance zone. The pullback highlights the market’s ongoing struggle to establish sustained momentum above this threshold.
On the downside, the $4,000 mark remains a key psychological support level, with additional buying interest emerging around $3,900. Overall, gold continues to trade in a volatile and uneven manner, with price action heavily influenced by developments in the Middle East. Geopolitical headlines are likely to remain a major driver of market sentiment, affecting not only gold but also interest-rate expectations, which continue to play a crucial role in shaping global financial markets.
USD/CAD
The U.S. dollar strengthened against the Canadian dollar over the week, even as oil prices surged. This divergence is not particularly surprising, as elevated market uncertainty has boosted demand for the U.S. dollar, while rising U.S. interest rates continue to support the currency. The positive interest-rate differential remains an important factor attracting buyers to the pair.
Although USD/CAD experienced a pullback in recent weeks after an extended bullish run, the correction appears to have helped ease overbought conditions. With the market showing signs of stabilizing, the pair may be positioned to resume its broader uptrend, with the 1.4150 area emerging as a key upside target.
EUR/USD
The euro weakened against the U.S. dollar during the week, with the 1.1400 level continuing to serve as a crucial support zone. This area has attracted significant market attention, having acted as a key consolidation level over the past year.
Looking ahead, the outlook for the pair remains heavily influenced by monetary policy expectations. Elevated U.S. interest rates continue to provide strong support for the dollar, reinforcing its appeal relative to other major currencies. As a result, interest-rate dynamics are likely to remain a primary driver of EUR/USD price action in the near term.
USD/JPY
The U.S. dollar remained firmly supported against the Japanese yen, as the yen continues to struggle amid the wide interest-rate gap between Japan and the United States. The pair’s broader trend remains bullish, with underlying fundamentals continuing to favor the U.S. dollar.
While a short-term correction cannot be ruled out after the recent advance, any pullback is likely to be viewed as a buying opportunity by market participants. The substantial interest-rate differential between the two economies continues to attract demand for the pair, reinforcing the longer-term upward outlook for USD/JPY.
GBP/USD
The British pound declined over the week, but the broader market structure remains largely unchanged. GBP/USD continues to trade within a well-established consolidation range between 1.3150 and 1.3700, suggesting that the recent weakness is part of ongoing sideways price action rather than the start of a new trend.
As the pair remains range-bound, it is likely to continue attracting traders who favor consolidation and mean-reversion strategies. Compared with other major currencies, the pound has shown relative resilience against the U.S. dollar, supported in part by the Bank of England’s comparatively hawkish policy stance, which has helped limit downside pressure on sterling.
Bitcoin (BTC/USD)
Bitcoin continues to experience choppy and unpredictable price action, with market sentiment largely driven by shifts in overall risk appetite. As investors weigh macroeconomic conditions and broader financial market trends, volatility is likely to remain elevated.
Despite the recent fluctuations, the $60,000 level appears to be establishing itself as a significant support zone. From a technical perspective, the latest weekly candlestick resembles a shooting star, following two consecutive hammer formations. This combination suggests a market lacking clear directional conviction, increasing the likelihood of continued sideways trading as participants wait for a stronger catalyst to determine the next major move.
Nasdaq 100
The Nasdaq 100 attempted to move higher during the week but quickly surrendered its gains as investor caution remained elevated. Ongoing geopolitical uncertainty and concerns about the economic outlook continue to weigh on sentiment, limiting the index’s ability to sustain upward momentum.
From a technical standpoint, the index appears vulnerable to a deeper correction if selling pressure persists. However, a decisive break above the high of the latest weekly candlestick would signal renewed bullish strength and could improve the near-term outlook. For now, persistent tensions in the Middle East and expectations of higher interest rates remain key headwinds, making it difficult for growth-oriented assets such as the Nasdaq 100 to stage a strong and sustained rally.
The cryptocurrency market capitalisation remained largely unchanged over the last 24 hours, holding near $2.24 trillion. Despite a stronger US dollar and a cautious tone across equity markets, digital assets continue to trade close to recent highs, suggesting a period of consolidation. Market sentiment softened slightly, with the Fear & Greed Index slipping from 33 to 31, though it remains firmly within the “fear” zone. Among major altcoins, Hedera (+6%), Uniswap (+4.4%), and Aptos (+3.6%) led the gains, while Filecoin (-4.9%), Stellar (-2.6%), and Bitcoin Cash (-2.4%) posted the largest declines.
Bitcoin fell to around $65.4K, marking a second consecutive daily decline after testing its June highs. The retreat has reinforced concerns that sellers still dominate the broader trend, limiting the rebound’s ability to evolve into a sustained recovery. Technically, the 61.8% Fibonacci retracement of the May–June decline continues to act as a key resistance level.
Ethereum also lost upward momentum near $1,950, failing on its initial attempt to reclaim a former support area that has now become resistance. The lack of significant support levels between current prices and the $1,750–1,800 region leaves the asset vulnerable to further weakness. A decisive move below $1,700 would increase the risk of a broader bearish trend reasserting itself.
News Background
Bitcoin has entered what some analysts describe as an extreme undervaluation zone, with the MVRV ratio reportedly falling below 5%, according to market analyst Crypto Tice. Historically, readings at similar levels have often coincided with major cyclical lows, suggesting that Bitcoin could be approaching a long-term bottom.
Analyst CryptoPatel believes Bitcoin could climb to $116,000 by year-end, arguing that the market has already established its bear-market low and is now entering the early stages of a trend reversal, similar to the recovery that followed the 2022 downturn.
Data from Artemis shows that the combined assets held by digital asset treasury (DAT) companies have dropped from approximately $120 billion to $75 billion since October, a decline of more than one-third. The contraction reflects the broader impact of Bitcoin’s price weakness on corporate crypto holdings.
Meanwhile, Satsuma Technology, the United Kingdom’s second-largest corporate Bitcoin holder, plans to liquidate its entire reserve of 668 BTC. The company accumulated the position beginning in August 2025 at an average purchase price of $113,200 per Bitcoin. Following a collapse of more than 99% in its share price from peak levels, Satsuma is also preparing for delisting from the London Stock Exchange.
According to on-chain analytics firm CryptoQuant, Bitcoin reserves held by miners outside exchanges have declined by 72% since late 2021, falling to roughly 139,700 BTC. The steady reduction over the past four years suggests miners have continued to draw down their holdings amid changing market conditions.
In the broader digital asset ecosystem, Solana has started preparing network validators for the rollout of its highly anticipated Alpenglow upgrade. The update, scheduled to be implemented in stages between August and October, is expected to increase transaction processing speeds by as much as 80 times, significantly enhancing the network’s performance and scalability.
Oil prices have posted a strong recovery this month as tensions between the United States and Iran intensified once again. Although a memorandum of understanding signed on June 17 established a 60-day period for diplomatic negotiations, the ceasefire proved short-lived. Both nations later accused each other of breaching the agreement, leading to a renewed wave of military action. The U.S. has carried out airstrikes against Iranian targets for 11 consecutive nights, while Iran has responded with operations across the region. So far, neither side has indicated when meaningful talks might resume.
The renewed conflict has helped fuel a three-week rally in crude oil markets. Brent crude climbed from roughly $71 per barrel at the start of July to nearly $95 by July 22, marking an increase of more than 30%. This surge has largely reversed the losses triggered by earlier hopes of de-escalation, which had pressured prices lower in early July.
From a technical perspective, Brent found solid support around the $70 level before reversing its short-term bearish trend. Prices have since reclaimed both the 50-day and 200-day moving averages and broken above resistance near the 2024 highs around $92. The next significant upside target lies in the $98–$99 zone, an area defined by previous yearly highs and an important retracement level from the April-to-July decline.
Market momentum has strengthened as well. The Relative Strength Index (RSI) has turned higher and moved back into bullish territory, signaling improving buying pressure. At the same time, market positioning may continue to support the advance.
Speculative short positions reached their highest levels of the year in late June, leaving many traders exposed as prices moved sharply higher. Meanwhile, long positions have increased considerably during July. Such positioning can intensify rallies because short sellers are often forced to buy back contracts to limit losses. As key resistance levels are breached, trend-following funds may also shift from bearish to bullish positions, reinforcing upward momentum. Although positioning alone does not ensure further gains, it suggests the market was poorly prepared for a supply-related upside shock. In an environment where sentiment is heavily bearish, even a relatively modest increase in supply concerns can trigger a disproportionately large move higher in oil prices.
Brent’s Technical Recovery Remains Intact
Brent crude has continued to strengthen following its sharp rebound from the lows recorded earlier in July, with improving technical indicators supporting the bullish outlook. The recovery has helped restore market confidence after the earlier pullback and suggests that momentum remains tilted to the upside.
Red Sea Disruptions Add to Supply Concerns
While the closure of the Strait of Hormuz remains a major threat to global energy markets, new risks are emerging elsewhere. The waterway is responsible for more than 10% of global oil supply, and tanker traffic through the route has largely stalled again after a brief recovery in activity.
Saudi Arabia had previously mitigated some of the disruption by utilizing its East-West pipeline, which transports crude from the Persian Gulf to Red Sea export terminals. Since the outbreak of the Iran conflict, the pipeline has been operating near capacity, carrying as much as seven million barrels per day. However, that alternative route is now facing pressure after Iran-backed Houthi forces announced a maritime blockade targeting Saudi shipping through the Bab el-Mandeb Strait at the southern entrance to the Red Sea. In response, several tankers have reportedly suspended voyages, reversed course, or sought alternative routes through the Suez Canal. The development suggests that oil markets are confronting risks across multiple critical shipping corridors rather than a single supply chokepoint.
Limited Strategic Reserve Capacity Raises Stakes
The growing threat to global supply arrives at a time when emergency oil stockpiles remain relatively depleted. Earlier this year, the International Energy Agency coordinated the release of a record 400 million barrels from strategic reserves among its 32 member nations to help offset disruptions linked to Middle East tensions. The United States contributed roughly 172 million barrels to that effort.
As a result, U.S. Strategic Petroleum Reserve inventories have fallen to approximately 311 million barrels, their lowest level in more than four decades. Although these reserves remain substantial, lower stockpiles reduce policymakers’ ability to respond to another major or prolonged supply shock. Strategic reserves can temporarily cushion disruptions, but they cannot permanently replace lost production or blocked transportation routes.
An additional factor supporting the market is the structure of the reserve release. Much of the oil was provided through exchange agreements rather than outright sales, meaning recipients are obligated to return borrowed barrels later along with an additional premium. Recent exchange programs require a return premium of roughly 8–9%, with higher costs applied if repayment deadlines are missed. Consequently, future replenishment efforts could generate additional physical demand for crude, potentially supporting prices even if geopolitical tensions moderate.
China Could Become a Key Swing Factor
China remains one of the most important variables for the global oil outlook. Recent declines in Chinese crude imports have raised concerns about weakening demand from the world’s largest oil importer. Softer industrial activity, slower transportation demand, and cautious refinery operations may be contributing to the slowdown, increasing the risk that global consumption growth falls short of expectations in the second half of the year.
However, the weakness may not solely reflect deteriorating demand conditions. Uncertainty surrounding Middle East shipping routes and disruptions near the Strait of Hormuz may have delayed some purchasing activity. If trade flows stabilize and Chinese authorities decide to rebuild commercial or strategic inventories, import demand could rebound quickly. In that scenario, a portion of the recent decline would represent postponed demand rather than permanently lost consumption, potentially providing fresh support for oil prices in the months ahead.
Conclusion
Oil’s recent recovery is being driven by more than just renewed geopolitical tensions. Strengthening technical indicators, heavily bearish market positioning, disruptions affecting two key global shipping routes, and historically low strategic oil reserves have collectively increased the market’s vulnerability to supply shocks.
While softer demand from China and the possibility of renewed diplomatic negotiations could temper the advance, the lack of a substantial supply buffer leaves the market exposed to further volatility. As a result, oil prices are likely to remain elevated and sensitive to developments until transportation routes return to normal and global inventories are replenished.
Gold came under significant pressure on Thursday, trading around $4,053 per ounce by mid-morning, down roughly $64 from the same time on Wednesday and nearly 2% lower than the previous close near $4,138. During European trading hours, spot gold had already slipped below the $4,100 level, touching $4,089.80 before losses deepened after the New York session opened. Gold futures also moved lower, falling 1.44% to around $4,092.20 in pre-market trading. The decline came just one day after the metal reached its highest level in two weeks.
Silver followed a similar path but experienced steeper losses. Spot silver dropped to approximately $58.43 by late morning in New York, compared with $59.83 a day earlier, marking a decline of about 1.7%. Meanwhile, the gold-to-silver ratio climbed from 69.03 to 69.54, indicating that gold held up slightly better than silver after a brief period in which the white metal had been outperforming.
The selloff was driven less by gold-specific factors and more by broader market developments. Escalating tensions in the Middle East—including reported attacks by Iran-backed Houthi forces on Saudi oil tankers and continued U.S. strikes on Iranian targets—sent oil prices sharply higher. Brent crude surged above $100 per barrel for the first time since late May, while WTI crude climbed beyond $91. Traditionally, such geopolitical risks would support safe-haven demand for gold, but the market reaction was different this time.
Instead, investors focused on the implications of rising energy prices for inflation and monetary policy. Higher oil prices have reinforced expectations that inflation could remain elevated, reducing the likelihood of near-term Federal Reserve easing. Treasury yields responded accordingly, with the 10-year yield reaching its highest level since early 2025, while money markets now assign a strong probability to another Fed rate increase in September. Rising yields increase the opportunity cost of holding non-interest-bearing assets such as gold, putting downward pressure on bullion prices.
Despite the recent weakness, gold remains up more than 21% over the past year, gaining about $636 per ounce during that period. However, it is still nearly 28% below its record high of $5,602 reached in January 2026. The metal has experienced extreme volatility, trading within a broad 52-week range between roughly $3,268 and $5,595.
The second quarter of 2026 proved particularly challenging for gold, marking its worst quarterly performance in over a decade. June alone saw prices decline by more than 10%, briefly pushing the metal below $4,000 and back to levels not seen since late 2025.
One of the most notable features of the current market cycle is that gold has weakened during an active geopolitical conflict—an outcome that runs counter to conventional expectations. The key reason lies in the inflationary impact of the conflict. Rising energy prices have fueled inflation concerns, pushed bond yields higher, and strengthened the case for tighter monetary policy. As real yields increase, gold becomes less attractive because it does not generate income.
This dynamic has largely outweighed traditional safe-haven demand. During the March-to-June conflict period, gold underperformed the U.S. dollar against major developed-market currencies, reflecting the market’s greater focus on interest-rate expectations than geopolitical uncertainty.
Thursday’s market action illustrated this relationship clearly. Despite reports of attacks on shipping routes in the Red Sea and growing concerns over critical maritime chokepoints such as the Strait of Hormuz and Bab el-Mandeb, gold still fell nearly 2%. The market interpreted the resulting surge in oil prices as a factor likely to keep the Federal Reserve hawkish rather than as a catalyst for safe-haven buying.
Looking ahead, a potential ceasefire could have mixed implications for gold. On one hand, reduced geopolitical risks would diminish safe-haven demand. On the other, lower oil prices could ease inflation concerns and increase the likelihood of future rate cuts, a development that would generally support bullion. As a result, the overall impact of peace on gold prices remains uncertain, highlighting how dominant the interest-rate narrative has become in today’s market.
Real Yields Have Dominated Gold’s Performance in 2026
Gold’s direction this year has been driven primarily by movements in real yields and expectations surrounding Federal Reserve policy. Under Chair Kevin Warsh, the Fed’s benchmark rate remains in the 3.50%-3.75% range, and precious metals markets continue to react to any shift in the outlook for interest rates. Investors overwhelmingly expect policymakers to leave rates unchanged at the July 28-29 meeting, while attention is increasingly focused on September, where markets see a meaningful possibility of another rate increase. Expectations for rate cuts this year have largely disappeared.
Recent economic data has reinforced the hawkish narrative. Initial jobless claims for the week ending July 18 came in significantly below forecasts, highlighting the resilience of the U.S. labor market. Strong employment conditions reduce pressure on the Fed to support growth and instead give policymakers greater flexibility to maintain a restrictive stance against inflation. Many Federal Open Market Committee members have already indicated support for at least one additional rate hike this year.
Bond markets have responded accordingly. Treasury yields have climbed to some of their highest levels since early 2025, with both short- and long-term maturities advancing. Elevated real yields are particularly important for gold because they raise the opportunity cost of holding an asset that generates no income while also incurring storage costs. The 10-year Treasury Inflation-Protected Securities (TIPS) yield has remained near levels that historically create persistent headwinds for bullion.
This dynamic helps explain why the popular view of gold as an inflation hedge has been less effective in 2026. Gold tends to perform best when inflation erodes purchasing power while real interest rates remain low or negative. However, when central banks actively combat inflation through higher rates, rising real yields can outweigh inflationary support and pressure gold prices lower. This year has largely reflected the latter environment.
The U.S. dollar has added to the challenge. A stronger greenback raises the cost of gold for buyers using other currencies, reducing demand at the margin. While the dollar has remained relatively stable rather than surging, any significant breakout higher could intensify the pressure already coming from elevated real yields.
Investors are now focused on a series of key economic events, including upcoming purchasing managers’ index (PMI) data and the July Federal Reserve meeting. Together, these releases are likely to shape the short-term outlook for gold.
The Retreat From $5,602 Resembles a Bear Market More Than a Simple Correction
Gold reached its all-time high of $5,602 per ounce on January 29, 2026, while silver peaked near $121.67 on the same day. The simultaneous highs suggest both markets were driven by a speculative surge in liquidity rather than independent fundamental factors.
Since then, gold has fallen roughly 28%, while silver has lost more than 50% of its value. Such declines, especially after persisting for multiple quarters, fit the traditional definition of a bear market. Gold endured its weakest quarter in more than a decade during Q2 2026, while June alone delivered a double-digit monthly loss and briefly pushed prices below the $4,000 mark.
However, the broader picture is more balanced than the headline decline suggests. Despite the sharp pullback from January’s peak, gold remains more than 21% higher than a year ago and continues to trade well above its 52-week low. Investors who established positions before the late-2025 rally are still sitting on substantial gains, while most of the damage has been concentrated among buyers who entered during the speculative surge earlier this year.
Viewed from a longer-term perspective, the move from roughly $3,268 to $5,602 and back to around $4,053 represents a retracement of about two-thirds of the previous advance. Historically, pullbacks of that magnitude are not uncommon following rapid, vertically driven rallies. Instead of signaling a structural breakdown, they often reflect the market digesting excess speculative demand.
What remains remarkable is the scale of volatility. Gold surged to record highs in January and fell below $4,000 just months later, while silver lost more than half its value over the same period. In such conditions, risk management and gradual position building become more important than aggressive directional bets.
Importantly, the longer-term uptrend that began in 2024 has not been decisively broken. Gold continues to trade above $4,000 while central banks maintain strong purchasing activity. The market appears less like a broken bull market and more like one undergoing a significant correction after an extreme rally.
ETF Outflows Have Become a Major Source of Selling Pressure
A significant factor behind gold’s weakness has been sustained selling from Western investors through exchange-traded funds (ETFs). Unlike shifts in sentiment alone, ETF redemptions translate directly into physical metal sales, creating measurable pressure on the spot market.
North American gold ETFs experienced substantial outflows during the first half of 2026, including one of the largest monthly redemption periods seen in recent years. Rising Treasury yields reduced the appeal of gold investments, contributing to a sharp decline in ETF demand. Even Asian gold ETFs, which had provided support for much of the rally, recently recorded their first notable monthly outflow in nearly a year.
The contrast with 2025 is striking. Last year, gold-backed ETFs attracted record inflows as investment demand surged and helped fuel one of the strongest rallies in the metal’s history. That extraordinary demand shock played a key role in pushing prices to record highs.
Interestingly, despite gold prices remaining dramatically above early-2025 levels, total global ETF holdings are still below their peak reached in 2020. This creates two possible interpretations. Bears argue that ETF investors still have room to continue reducing positions. Bulls counter that large institutional investors have yet to fully return, leaving significant potential demand should the interest-rate environment become more supportive.
ETF flows matter because they directly influence physical supply and demand. When investors withdraw funds, ETF managers sell gold into the market. When inflows return, those managers must buy metal. As a result, ETF activity has become one of the most important indicators for monitoring short-term trends in gold.
For now, the pattern of redemptions remains intact. A sustained reversal is likely to require either a meaningful decline in real yields or a price correction large enough to attract value-oriented buyers. Until one of those catalysts emerges, gold may continue to struggle to maintain rallies and break above key resistance levels.
Central Banks Continue to Provide Steady Support
Despite heavy selling from investment funds, central banks have remained consistent buyers of gold, creating one of the strongest structural pillars supporting the market.
Analysts estimate that central bank purchases in 2026 could total between 750 and 1,000 tonnes, with many forecasts centered around 800 tonnes. Unlike private investors, central banks are largely unaffected by fluctuations in bond yields or short-term market sentiment. Their focus is on long-term reserve diversification, particularly reducing dependence on the U.S. dollar. As a result, they tend to maintain purchases regardless of short-term price swings, fundamentally changing the dynamics of the gold market.
This shift is reflected in a notable milestone: for the first time since 1996, gold now represents a larger share of global central bank reserves than U.S. Treasuries. That development highlights a broader transformation in reserve management rather than a temporary investment trend. At the same time, many countries have accelerated efforts to repatriate their gold holdings, bringing bullion back under domestic control and signaling growing concerns about counterparty and geopolitical risks.
The macroeconomic environment continues to support this strategy. Global debt levels reached a record $353 trillion during the first half of 2026, with government borrowing accounting for an unprecedented share of the total. Such conditions often encourage reserve managers to increase exposure to assets viewed as long-term stores of value and monetary hedges.
There is, however, an important balancing factor. As gold prices rose toward record highs earlier this year, central banks required fewer tonnes of metal to achieve their reserve-allocation objectives. Now that prices have retreated, the same budget can purchase substantially more gold, naturally supporting physical demand. Jewelry demand, which accounts for roughly 40% of global gold consumption, operates under a similar dynamic, though it weakened when prices reached extreme levels.
Ultimately, central bank buying provides an important safety net for the market. However, while this demand may help establish a long-term floor for prices, it is not necessarily a catalyst for an immediate rally. It can limit downside risk without guaranteeing near-term upside momentum.
Silver Remains a Higher-Volatility Version of the Gold Trade
Silver continued to struggle on Thursday, trading near $58.43 per ounce, down about 1.7% on the day. Although the metal remains more than 50% higher than a year ago, it has declined over 17% since the start of 2026 and remains roughly 52% below its January record high of $121.67.
One of the most closely watched indicators is the gold-to-silver ratio, which climbed back to 69.54 after briefly dipping below 70 during silver’s recent outperformance. Historically, a sustained move below 70 has signaled strong demand for both metals, while a rise above 75 often suggests weakening industrial demand for silver.
What distinguishes silver from gold is its significant industrial role. Silver is widely used in electronics, renewable energy technologies, and solar panel production due to its unmatched electrical conductivity. Roughly half of global silver demand comes from industrial applications, making the metal more sensitive to economic cycles than gold.
This dual identity explains silver’s greater volatility. When investors expect tighter monetary policy and slower economic growth, industrial demand concerns often amplify price declines. Conversely, if interest-rate expectations become more accommodative, silver tends to outperform gold because both its industrial and monetary demand drivers can strengthen simultaneously.
The physical market has also experienced disruptions. India, one of the world’s largest silver consumers, has seen imports slow sharply following the introduction of a new licensing framework. The resulting supply constraints have pushed local premiums to multi-month highs, creating a divergence between physical-market conditions and futures prices. Such imbalances are typically resolved either through a recovery in imports or a rise in spot prices.
On the supply side, Mexico remains the world’s largest silver producer, accounting for roughly one-fifth of global output, while Peru holds a significant share of known reserves and ranks among the top producers.
Despite recent weakness, many institutional forecasts remain considerably above current market levels. Consensus estimates among major banks and industry analysts generally place average silver prices for 2026 in the $79–$81 per ounce range, suggesting expectations for a meaningful recovery during the second half of the year. More pessimistic projections, however, envision prices falling toward $44 if the Federal Reserve maintains a restrictive stance and the U.S. dollar remains strong.
The wide gap between bullish and bearish forecasts highlights the market’s uncertainty. Ultimately, silver’s outlook remains closely tied to the future path of interest rates, economic growth, and industrial demand, making it one of the most sensitive assets to shifts in the broader macroeconomic environment.
Gold Mining Stocks Have Suffered Even More Than Bullion
Gold mining equities have endured steeper losses than the underlying metal, illustrating how operational leverage can amplify downside risks when gold prices fall.
The VanEck Gold Miners ETF (GDX) was trading around $74.17 on July 21, well below its 52-week high of $117.18 and roughly 37% lower than its peak. The fund’s technical outlook has weakened considerably, with its 50-day moving average falling below the 200-day moving average in late June, while momentum indicators turned bearish in early July. Investor sentiment has also deteriorated, as reflected by recent fund outflows.
The sector experienced significant pressure during June. While physical gold declined just over 10% during the month, major mining companies suffered considerably larger losses. Leading producers and royalty companies posted double-digit declines, with some stocks falling more than 20%. These moves highlight how mining shares often experience greater volatility than gold itself, particularly during market downturns.
The reason lies in the economics of the mining business. Operating costs tend to remain relatively stable regardless of short-term fluctuations in gold prices. When gold rises above production costs, much of the additional revenue flows directly to profits, allowing miners to outperform bullion during strong rallies. However, when gold prices decline, profit margins contract disproportionately because many expenses remain fixed. As a result, mining stocks often fall faster than the metal during corrections.
A new challenge has emerged in recent months: rising energy costs. Fuel and power represent major components of mining expenses, and the sharp increase in oil prices has added further pressure to the sector. With Brent crude climbing from around $70 earlier in July to above $100 per barrel, investors are increasingly focused on how higher energy costs could affect operating margins in upcoming earnings reports.
This combination of lower gold prices and rising production costs creates a difficult environment for mining companies. A substantial decline in bullion prices alongside a sharp increase in diesel and electricity expenses could significantly squeeze profitability, making management guidance on production costs a key factor to watch during the next reporting season.
Long-term performance data also offers an important perspective. Over the decade ending in July 2026, major gold-mining funds generated returns that were broadly comparable to—or in some cases lower than—those achieved by physical gold investment vehicles. While mining stocks offer leverage to rising gold prices, factors such as management decisions, hedging strategies, operational risks, fees, and portfolio rebalancing can reduce the benefits of that leverage over extended periods.
As a result, the recent downturn has reinforced a lesson familiar to many investors: mining stocks can magnify gains during bull markets, but they can also amplify losses when conditions turn unfavorable.
XRP remains under pressure, trading within a relatively narrow range between $1.10 and $1.15.
RippleX Principal Engineer Ayo Akinyele projects that agentic transactions could climb to 10 million after recently surpassing the 1 million mark.
The XRP Ledger continues to attract developers by offering an efficient and seamless infrastructure for digital payments.
XRP is edging lower on Thursday, though losses remain modest, with the token holding above the $1.13 level. The cross-border payment cryptocurrency reached a weekly peak of $1.16 on Tuesday, supported by progress surrounding the US Clarity Act and growing indications that inflationary pressures in the United States are easing.
Despite these positive developments, ongoing geopolitical tensions between the US and Iran continue to dampen appetite for risk-sensitive assets. This cautious mood is reflected in the cryptocurrency market, where the Fear & Greed Index remains firmly in the Fear zone. Investor sentiment slipped to 31 on Thursday from 33 a day earlier, reducing demand for XRP and related digital asset products.
RippleX records over 1 million agentic AI transactions
RippleX, the development arm behind the XRP Ledger, has achieved a significant milestone, with agent-driven AI transactions now exceeding 1 million.
Speaking to The Block, RippleX Principal Engineer Ayo Akinyele said he expects adoption to accelerate substantially, potentially pushing the total number of agentic transactions beyond 10 million in the near future.
According to Akinyele, the figure could eventually surpass 100 million within a few years as AI technologies advance and the supporting infrastructure becomes increasingly efficient.
Agentic payments are transactions initiated and completed by autonomous AI systems without requiring human approval at every step. Operating within predefined parameters such as spending limits and policy rules, these AI agents can independently determine how and when to make payments in pursuit of specific objectives.
As AI capabilities continue to improve, developers are increasingly embracing agentic transaction models. Autonomous agents can monitor systems, purchase data, access computing resources, and pay for various digital services needed to carry out assigned tasks.
Akinyele emphasized that RippleX is focused on creating a seamless payment experience for AI agents using the XRP Ledger, highlighting the network’s settlement efficiency as a key advantage for handling API payments and other digital service transactions.
Price Analysis: XRP Recovery Loses Steam as Bearish Pressure Persists
XRP remains supported above the $1.13 level, but its recovery is struggling to gain traction as the token continues to trade beneath several important Exponential Moving Averages (EMAs). The 50-day EMA near $1.15, the 100-day EMA around $1.23, and the 200-day EMA at $1.44 continue to act as significant resistance barriers. Nevertheless, XRP is holding above the Bollinger Bands’ midpoint at $1.11, indicating that buyers are still providing some support. Meanwhile, the Relative Strength Index (RSI) sits near 54, reflecting modest bullish momentum without signaling overbought conditions.
The Moving Average Convergence Divergence (MACD) indicator also remains above the zero line, suggesting that the recent rebound is still intact, although the broader market structure remains constrained by overhead resistance.
On the upside, the first obstacle for bulls is the 50-day EMA near $1.15, followed closely by the upper Bollinger Band around $1.16. If buying pressure strengthens, the next targets are the 100-day EMA at approximately $1.23 and the 200-day EMA near $1.44. On the downside, immediate support is located at the Bollinger Bands’ midpoint around $1.11, while stronger support emerges near the lower Bollinger Band at $1.06. A decisive move below this area could pave the way for a deeper corrective decline.
The pair gains traction as the US conducts a 13th straight night of military strikes against Iran, fueling geopolitical uncertainty. Market participants are now turning their attention to the UK’s June Retail Sales data, due later on Friday, for fresh direction and trading cues.
GBP/USD rebounds toward 1.3325, ending a five-session decline during Friday’s Asian trading hours.
Despite the recovery, gains may remain capped as escalating military tensions in the Middle East continue to support demand for the safe-haven US Dollar. Investors are also awaiting the release of the UK Retail Sales report later in the day for fresh market direction.
Geopolitical risks remain elevated after the US Central Command (CENTCOM) carried out a 13th consecutive night of strikes on Iranian-linked targets. US President Donald Trump stated that Iran would be held accountable for Houthi attacks and warned that both Iran and the Houthis could face significant military consequences, further boosting risk aversion and underpinning the Greenback.
Meanwhile, expectations for the Bank of England remain largely unchanged. Markets widely anticipate the BoE will leave its benchmark interest rate at 3.75% at next week’s meeting while assessing the economic impact of the Middle East conflict. According to Reuters, traders continue to price in one or two quarter-point rate increases by the end of 2026, little changed from earlier expectations.
Attention now turns to the UK Retail Sales figures, which could provide additional insight into the BoE’s policy outlook. Economists forecast a 0.3% monthly decline in June sales following May’s 1.2% increase. A stronger-than-expected result could strengthen the case for the BoE to maintain a hawkish stance, potentially offering further support to the Pound.
Analysts at Scotiabank highlighted that market expectations remain firmly anchored ahead of the BoE meeting, with investors largely expecting no change in interest rates. The stable policy outlook is likely to continue shaping near-term GBP/USD trading as markets await fresh economic data for clearer direction.
Gold prices dropped sharply toward the $4,050 level during the early Asian trading session on Friday. Renewed military tensions in the Middle East have heightened concerns about rising inflation, putting pressure on the precious metal. Meanwhile, investors are increasingly pricing in the possibility of tighter monetary policy, with markets currently assigning a 35.8% probability of a Federal Reserve rate hike in July.
Gold Retreats Toward $4,050 as Middle East Tensions Boost Fed Rate Hike Expectations
Gold (XAU/USD) came under selling pressure during Friday’s early Asian trading session, slipping toward the $4,050 level after recently reaching a two-month high. The decline follows a surge in oil prices driven by escalating geopolitical tensions in the Middle East, which has strengthened market expectations that the US Federal Reserve could resume interest rate hikes as early as next week.
Concerns over a broader regional conflict intensified after Yemen’s Iran-backed Houthi group claimed responsibility for attacks on two Saudi oil tankers in the Red Sea, while the United States continued its military strikes against Iran for a 13th consecutive night. The developments have heightened fears of further instability across the region.
Adding to market anxiety, US President Donald Trump warned that any additional Houthi attacks would trigger significant military retaliation against both the Houthis and Iran. Trump also revealed that he is considering a large-scale military operation against Iran, describing it as potentially the biggest action undertaken so far and indicating that a decision could be imminent.
The resulting spike in crude oil prices has reignited inflation concerns, prompting investors to increase their expectations for tighter US monetary policy. According to CME FedWatch data, markets are currently pricing in a 35.8% probability of a Fed rate increase this month and an 82.1% chance of at least a 25-basis-point hike in September. Higher interest rates typically weigh on non-yielding assets such as gold.
Analysts at TD Securities remain cautious on the outlook for the precious metal, arguing that the current interest rate and currency environment does not support a meaningful increase in bullish gold positions. They also note that continued oil price gains linked to the Middle East conflict could further raise the likelihood of Fed tightening, limiting the potential for sustained upside in gold prices over the near term.
Silver draws fresh buying interest on Thursday after a modest pullback, although bullish momentum remains limited.
The overall technical picture continues to support buyers, suggesting the potential for additional gains in the near term.
However, a sustained move below the $59.00 level would be required to invalidate the broader positive outlook.
Silver (XAG/USD) found renewed buying interest around the $58.25–$58.20 area during Thursday’s Asian trading session, helping to halt the previous day’s mild retreat from the $61.00 region, its highest level in more than two weeks. Despite the rebound, the precious metal has struggled to build momentum and is currently trading near the mid-$59.00s, down roughly 0.40% on the day.
The recent breakout above the key $59.00 confluence zone—where the 100-period SMA on the 4-hour chart aligns with the 23.6% Fibonacci retracement of the decline from the June 17 peak—has reinforced the bullish outlook for silver. Technical indicators remain supportive, with the RSI holding at 61.21 in positive territory and the MACD histogram maintaining a modest bullish bias. Together, these signals suggest that the broader upward momentum remains intact, supporting the possibility of additional gains in the near term.
On the upside, the first notable hurdle is located at the 38.2% Fibonacci retracement level of $61.31. A break above this area could pave the way toward the 50.0% retracement at $63.28, followed by the 61.8% level at $65.25. Further strength may bring the 78.6% retracement barrier near $68.05 into focus. On the downside, initial support is seen around the $58.99 region, where the 100-period SMA and the 23.6% Fibonacci retracement converge. A more pronounced correction could then target the key structural support area around $54.94.
The US Dollar Index (DXY) remains under pressure as investors weigh renewed inflation worries against signs of slowing economic momentum in the United States. Ambiguous signals from Federal Reserve Chair Kevin Warsh have added uncertainty to the Dollar’s longer-term trajectory, while ongoing geopolitical tensions in the Middle East continue to support safe-haven flows, potentially limiting further downside for the Greenback.
The US Dollar Index (DXY), which tracks the US Dollar against a basket of six major currencies, extended its decline for a second straight session, hovering near 101.00 during Thursday’s Asian trading hours.
The Greenback remains under pressure as investors assess the impact of rising inflation risks, fueled by higher energy prices, alongside signs of a slowing US economy. Although the Federal Reserve is widely expected to keep interest rates unchanged at its next policy meeting, evolving rate expectations and mixed signals from newly appointed Fed Chair Kevin Warsh have increased uncertainty surrounding the Dollar’s longer-term direction.
Nevertheless, losses in the US Dollar may be limited by persistent safe-haven demand amid escalating geopolitical tensions in the Middle East. Market concerns intensified after US President Donald Trump warned of potential strikes on Iranian infrastructure if Tehran targets vessels passing through the Strait of Hormuz, prompting Iran to threaten rapid retaliation against US-associated energy facilities in the region.
Further adding to the uncertainty, Iran-backed Houthi forces reportedly carried out missile and drone attacks on two Saudi oil tankers in the Red Sea. The incident represents the first direct assault on tankers in the strategic waterway, threatening a key alternative route for Saudi crude exports and raising fears of a broader regional conflict.
Gold finds it difficult to attract strong buying interest during Thursday’s Asian trading session. Persistent inflation concerns continue to support expectations of further Federal Reserve rate hikes, weighing on the precious metal. However, ongoing weakness in the U.S. dollar helps cushion the downside and prevents a sharper decline in gold prices.
Gold (XAU/USD) remained above the $4,100 level during Thursday’s Asian session, stabilizing after retreating slightly from a two-week high reached earlier this week. The precious metal is facing pressure from rising U.S. Treasury yields, as escalating tensions between the United States and Iran have pushed oil prices to their highest level since June, fueling concerns about inflation and strengthening expectations of additional Federal Reserve rate hikes.
The geopolitical conflict continues to intensify, with the U.S. and Iran exchanging strikes for a twelfth consecutive night. Meanwhile, Yemen’s Houthi forces have announced a blockade of a key Red Sea shipping route, adding to disruptions in global energy supply chains. Combined with reduced traffic through the Strait of Hormuz, these developments have driven crude oil prices higher and increased fears that energy-driven inflation could force central banks to maintain a more hawkish policy stance.
Market participants are now assigning a high probability to at least one Fed rate hike before year-end, supporting elevated Treasury yields and weighing on non-yielding assets such as gold. Nevertheless, ongoing weakness in the U.S. dollar has provided some support for bullion, helping limit downside pressure and keeping the broader short-term uptrend intact.
Analysts note that investors have become increasingly aggressive in pricing future Fed tightening, reinforcing the recent rise in real yields and broader bond market weakness. As a result, gold is caught between safe-haven demand stemming from geopolitical uncertainty and the negative impact of higher interest rate expectations.
Looking ahead, traders will closely monitor U.S. Initial Jobless Claims data and the European Central Bank’s policy decision for fresh market direction. Any further escalation in the Middle East conflict is also likely to remain a key driver of gold price movements in the near term.
Technical Analysis
Gold’s recent rally appears to be losing momentum near the critical $4,155–$4,165 resistance zone, where the 200-period EMA on the 4-hour chart converges with the 23.6% Fibonacci retracement of the April–June decline. This area has emerged as an important technical hurdle that bulls must overcome to sustain the upward move.
Despite the resistance, momentum indicators remain constructive. The RSI is holding around 63, indicating continued buying interest without entering overbought territory, while the MACD remains in positive territory, suggesting that bullish momentum is still intact. However, strong overhead supply is preventing buyers from gaining full control.
A decisive breakout above the $4,155–$4,165 region would strengthen the bullish outlook and could pave the way for a move toward the next major resistance near the 38.2% Fibonacci retracement level around $4,304. Such a development would signal renewed upside momentum and attract additional buying interest.
On the downside, the key support level remains around $3,941, which serves as the primary Fibonacci anchor for the current recovery. If gold experiences a deeper correction, this zone could attract fresh demand and provide a foundation for a more sustainable advance in the longer term.
Overall, gold remains in a cautiously bullish technical structure, but a clear break above the $4,165 resistance area is needed to confirm the next leg higher. Until then, traders may continue to see consolidation within the current range.
Western retail gold investors often fear rising interest rates because they mistakenly view the Federal Reserve as the ultimate force behind bond market movements. In reality, long-term interest rates are largely shaped by market dynamics, and the Fed’s influence may be far less significant than many assume.
From a broader perspective, extremely high interest rates coupled with persistent inflation could become one of the strongest catalysts for a major rally in gold prices. Investors should at least consider the possibility of a future environment where market-driven forces push yields dramatically higher, potentially coinciding with a substantial rise in gold.
Historical examples show that governments often react to inflation rather than control it. In countries that experienced severe inflationary pressures, interest rates were forced sharply higher as policymakers struggled to restore stability. Some analysts argue that similar risks, although on a much smaller scale today, are not being fully reflected in U.S. financial markets.
A key concern is the growing burden of government debt. If Treasury yields were to rise significantly, interest expenses could consume an increasingly large share of federal revenues, placing additional strain on public finances. Critics argue that markets may be underestimating this risk.
Quantitative easing (QE) proved effective during periods of disinflation and financial stress, largely supporting asset prices and market liquidity. However, in an environment where inflation remains elevated, renewed large-scale monetary stimulus could have very different consequences, potentially intensifying inflationary pressures felt by households.
Throughout history, societies have often focused on entertainment and short-term distractions during periods of economic uncertainty rather than preparing for potential financial upheaval. Advocates of gold believe the current environment presents a similar lesson: maintaining exposure to hard assets may offer protection against the long-term risks associated with inflation, debt accumulation, and currency debasement.
The long-running battle between gold and fiat currencies can be viewed as a contest between financial discipline and governments burdened by chronic overspending, rising debt levels, and an increasing reliance on monetary expansion.
Gold Spot ($GOLD – Daily Chart)
Gold’s recent price action has produced a notable technical breakout, a development that many market participants see as an important bullish signal.
Investors have been encouraged to pay close attention to gold’s retreat toward the psychologically significant $4,000 level. From recent highs, this represents roughly a 30% correction, creating what some analysts consider a rare long-term accumulation opportunity.
The broader $3,900–$4,100 range is increasingly being viewed as a high-conviction buying zone for investors seeking strategic exposure to the precious metal.
From a technical perspective, gold has broken above a key downward trendline, suggesting that bearish momentum may be fading. If the breakout is sustained, the next major target could be the higher resistance trendline near $4,400, implying further upside potential in the weeks ahead.
Gold and Silver Outlook
Looking at the weekly gold chart, several outcomes remain possible, and a scenario involving substantially higher prices cannot be ruled out. Some analysts argue that gold reaching $9,000 is conceivable even in an environment where interest rates rise toward 9%, particularly if inflation remains elevated or accelerates further.
Historical examples such as Venezuela and Zimbabwe demonstrate that governments can continue operating despite extremely high interest rates, largely because inflation was even higher. In such environments, nominal rates rise in response to inflationary pressures rather than acting as a constraint on them.
Silver Spot ($SILVER – Daily Chart)
Silver’s technical picture also appears increasingly constructive. Investors who accumulated the metal during the recent pullback—particularly as gold traded within the $3,900–$4,100 accumulation zone—are now seeing the market move in their favor.
The latest breakout signals strengthening bullish momentum, with silver appearing poised for a rapid advance. If current trends continue, the metal could target the $80 level, while an extension of the rally may open the door to prices approaching $90 over the longer term.
Overall, both precious metals continue to attract attention as investors seek potential protection against inflation, currency debasement, and mounting sovereign debt concerns.
Mining stocks are also beginning to show renewed strength. A review of the CDNX Index suggests that momentum is building across the junior resource sector, with technical indicators increasingly aligning in favor of the bulls.
From a chart perspective, the index appears to have entered a more constructive phase, as key signals—including trend direction, price structure, and momentum measures—have turned positive. In other words, the technical backdrop has improved significantly, leading some analysts to conclude that all major technical indicators are now flashing green for the CDNX.
If precious metals continue their advance, the improving technical outlook could position junior mining shares to benefit from increased investor interest and capital flows into the sector.
Gold mining stocks are presenting an increasingly attractive technical setup, according to some market analysts. The latest chart of the GDX Gold Miners ETF highlights several key accumulation zones that have historically offered favorable risk-reward opportunities for investors.
With gold, silver, and mining equities having already completed what appears to be a three-wave corrective decline, the sector may now be positioned for a much larger advance. Supporters of the bullish case argue that investors who accumulated positions during gold’s pullback into the $3,900–$4,100 range have already secured attractive entry points, while momentum-focused investors may now be receiving confirmation as prices begin to trend higher.
If the rally in precious metals continues to strengthen, GDX could potentially challenge—and in an especially bullish scenario, surpass—its previous all-time highs. Such a move would likely be supported by rising gold prices, improving sentiment, and increased capital flows into mining shares.
The broader investment thesis remains centered on concerns over expanding government debt, persistent inflation risks, and currency debasement. From this perspective, advocates of precious metals view gold as a long-term store of value and a potential hedge against fiscal and monetary instability, making it an important component of a diversified portfolio.
Bitcoin Reclaims Key Resistance as ETF Demand Returns
Bitcoin surged back above a critical resistance level that has defined trading over the past month, climbing to around $65,800, up 2.55% over the previous 24 hours after briefly topping $66,000. Trading volume exceeded $31 billion, helping extend its seven-day gain to 5% and pushing its 30-day return into positive territory at 2.44%. This marks Bitcoin’s first positive monthly performance since plunging to a 21-month low near $57,800 in late June.
The recovery above $65,000 is significant because the level has acted as a major technical barrier throughout the month. Bitcoin spent weeks trading below its 50-month EMA around $65,150, with repeated rebound attempts failing to break through. Moving above this resistance and maintaining gains on stronger volume suggests that the intense selling pressure that drove prices lower may be fading. As a result, Bitcoin’s market capitalization has rebounded to approximately $1.3 trillion.
The rally was not driven by a single event but rather a combination of supportive factors. Spot Bitcoin ETFs recorded five consecutive sessions of net inflows, geopolitical tensions between the United States and Iran showed signs of easing, and exchange balances continued to decline as large holders reduced selling activity. Together, these developments created Bitcoin’s strongest 24-hour performance in more than a month.
A key theme behind the rebound is the return of demand through spot Bitcoin ETFs. Throughout much of 2026, weak ETF inflows limited Bitcoin’s ability to sustain rallies. The recent five-day buying streak has effectively reversed part of June’s sharp decline and could pave the way for a move toward $68,000, provided support levels hold.
However, risks remain. The Federal Reserve’s July 28–29 meeting could introduce fresh volatility, and Bitcoin is still down roughly 25% year-to-date. Earlier ETF inflow recoveries this year were often followed by renewed outflows after major macroeconomic events. While the breakout above $65,000 is encouraging, the next several trading sessions will determine whether it becomes a solid foundation for further gains or merely another temporary recovery.
ETF Inflows Provide the Fuel
The main catalyst behind Bitcoin’s rebound has been the return of institutional demand through spot Bitcoin ETFs. The sector has now recorded its first five-day inflow streak since April, signaling renewed accumulation after months of persistent redemptions. For many market participants, the lack of ETF demand was the primary reason Bitcoin struggled to gain momentum throughout 2026.
On Monday alone, US spot Bitcoin ETFs attracted approximately $227 million in net inflows. These inflows directly impact the spot market because ETF issuers must purchase physical Bitcoin to back newly created shares. As a result, ETF flow trends have become one of the most important drivers of Bitcoin’s price action.
The latest inflow streak also represents an important psychological shift. Earlier in July, a brief three-day inflow period totaling $510 million interrupted a damaging 10-day outflow streak of $2.73 billion. While that provided initial stabilization, the current five-day run has delivered enough buying pressure to push Bitcoin decisively above the key $65,000 resistance level.
Assets held across US spot Bitcoin ETFs have recovered toward $79 billion, while cumulative net inflows since their launch in January 2024 have risen to $51.63 billion. These figures highlight a recovery in investor confidence rather than a continuation of the previous downturn.
Since their introduction, spot Bitcoin ETFs have become one of the most influential sources of demand for the cryptocurrency, offering regulated access for institutional investors such as pension funds, wealth managers, and financial advisors. When ETF inflows are strong, Bitcoin benefits from a consistent source of buying pressure. When flows weaken, prices often struggle to find support. The recent five-day inflow streak has restored that demand, helping Bitcoin reclaim a level that had repeatedly capped previous rallies. The market’s focus now shifts to whether this momentum can survive upcoming macroeconomic events, particularly the Federal Reserve meeting.
IBIT Takes the Lead, Signaling Institutional Demand Is Back
Among all spot Bitcoin ETF flow metrics, the most closely watched indicator is which fund attracts the most capital. On Monday, the answer was clear: BlackRock’s IBIT led the market with $116 million in net inflows, a development widely viewed as a sign of renewed institutional participation rather than short-term speculative buying.
The distinction is important. IBIT is considered the strongest proxy for institutional positioning within the spot Bitcoin ETF market. Given its massive asset base, each dollar flowing into the fund typically translates into larger underlying Bitcoin purchases compared with smaller ETF competitors. When IBIT leads inflows, it suggests that long-term investors are accumulating exposure rather than traders simply buying a temporary dip.
The broader ETF picture also reflected widespread buying interest. IBIT attracted $116.5 million, while ARK 21Shares added $72.7 million, Fidelity brought in $24.1 million, Bitwise gained $8.8 million, Morgan Stanley’s offering received $6.9 million, and VanEck collected $1.8 million. Meanwhile, the two Grayscale products moved in opposite directions, with the legacy trust losing $45.4 million while the lower-fee version gained $41.4 million. Combined, these flows produced approximately $227 million in net inflows, helping Bitcoin break above the crucial $65,000 level.
The composition of the inflows matters as much as the total. Earlier in July, sessions led by Fidelity or ARK while IBIT continued to experience outflows were viewed as tactical positioning or retail-driven activity. In contrast, when IBIT became the leading recipient of inflows—such as the $209.4 million inflow on July 6 and the $116 million gain on Monday—the market interpreted it as a much stronger signal of institutional accumulation.
IBIT itself posted a 1.55% increase in net asset value during Monday’s session, reflecting Bitcoin’s rise in the spot market. Its influence on the ETF ecosystem is substantial. The fund accounted for nearly 79% of June’s record ETF outflows, making its return to positive flows particularly meaningful. Because of its size, IBIT has the ability to drive sentiment and liquidity across the entire ETF complex. For now, that influence is working in Bitcoin’s favor, although investors remain focused on whether the trend can continue through the upcoming Federal Reserve meeting.
June’s Selloff Created the Foundation for the Recovery
To appreciate why a $227 million inflow day is attracting so much attention, it is important to understand the scale of June’s decline. June 2026 became the worst month ever for spot Bitcoin ETFs, with approximately $4.5 billion leaving the sector, surpassing the previous record outflow of $3.56 billion recorded in February 2025. IBIT alone accounted for nearly 79% of those redemptions.
The asset decline was dramatic. Total assets held by spot Bitcoin ETFs fell from more than $104 billion in mid-May to roughly $77 billion at the height of the June selloff. At the same time, Bitcoin dropped from above $93,000 at the start of 2026 to around $60,000 by the end of June, briefly touching a 21-month low near $57,800.
Unlike previous crypto bear markets, this downturn was not triggered by failures within the digital asset industry. There were no major exchange collapses, stablecoin de-peggings, or systemic credit crises. Instead, the decline was largely driven by macroeconomic pressures, including a hawkish Federal Reserve and heavy institutional ETF outflows.
This difference is crucial because recoveries from macro-driven selloffs tend to be faster than recoveries from structural crises. The underlying infrastructure remained intact throughout the downturn; only investor positioning changed. As a result, the return of ETF inflows has the potential to reverse the damage more quickly than in previous cycles.
That is why the recent five-day inflow streak is viewed as more than just a short-term rebound. It suggests that capital which exited due to macroeconomic concerns may now be returning as those concerns begin to ease. Compared with a backdrop of record outflows and a 21-month price low, Bitcoin’s move back above $65,000 appears to be the early stages of a mechanical recovery driven by the same flows that fueled the selloff.
Bulls and Bears Remain Divided
The institutional outlook for Bitcoin remains sharply split. One camp has become increasingly cautious, with at least one major financial institution cutting its 12-month Bitcoin target from $112,000 to $82,000 on July 1. The bank also projected zero net ETF inflows over the next year, citing stalled cryptocurrency legislation in Washington and concerns about weak institutional demand.
This bearish view argues that the ETF demand engine that powered Bitcoin’s rise in 2024 and 2025 has fundamentally weakened. If that assessment is correct, then every inflow streak seen this year—including the current one—would represent a temporary bounce rather than the start of a sustained bull market.
The opposing camp believes the June correction effectively flushed out weak holders and that the return of IBIT-led inflows marks the beginning of a more durable recovery. Supporters of this view argue that the recent inflow streak has already halted the systematic selling pressure that drove Bitcoin to its lows.
A more moderate perspective compares Bitcoin ETF adoption to the historical development of gold ETFs. Under this framework, periods of strong gains are naturally followed by significant corrections before long-term growth resumes. From this viewpoint, Bitcoin’s recent volatility may simply be part of a broader maturation process rather than a sign of structural weakness.
Ultimately, the debate will be decided by ETF flows. If inflows continue beyond the Federal Reserve meeting and develop into a sustained multi-week trend, confidence in a stronger recovery could grow and higher price targets may return. If flows weaken again, the bearish argument that institutional demand remains fragile will gain credibility. For now, however, the recent five-day inflow streak has shifted momentum back toward the bullish side of the market.
Exchange Outflows and Whale Activity Strengthen the Bullish Narrative
Beyond ETF inflows, on-chain data is also providing evidence that Bitcoin’s recovery may have stronger foundations. In a single day, roughly $686 million worth of Bitcoin was withdrawn from Binance, Coinbase, and Bybit, a substantial exchange outflow that is typically interpreted as investors moving coins into long-term storage rather than keeping them on exchanges for potential sale. When exchange balances decline, the amount of Bitcoin readily available for selling decreases, creating a more supportive supply environment.
Another encouraging signal comes from whale activity. The Momentum Whale Inflow Ratio, which measures the amount of Bitcoin large holders transfer to exchanges, turned negative for the first time in 2026 after remaining positive for five consecutive months. A positive reading generally suggests whales are preparing to sell by moving coins onto exchanges, while a negative reading indicates reduced selling intent and fewer coins entering the market.
The shift is particularly notable because it breaks a pattern that persisted throughout most of the 2026 downturn. During the decline, large holders consistently supplied Bitcoin to exchanges, creating selling pressure that repeatedly capped recovery attempts. The recent negative reading suggests that major investors have become less active sellers, removing a key source of overhead supply.
When viewed together, ETF inflows and exchange outflows create a favorable supply-demand dynamic. ETF issuers continue purchasing Bitcoin in response to investor demand, while fewer coins remain available on exchanges for sale. This combination often creates conditions for stronger price advances, as reduced supply meets increasing demand. Such an environment likely contributed to Bitcoin’s ability to break above $65,000 and briefly test $66,000.
While these indicators remain constructive, they are not permanent. Whale behavior can change quickly, and exchange balances can rise again if investors decide to take profits. Nevertheless, current on-chain data points toward accumulation rather than distribution, supporting the possibility of a continued move toward $68,000 in the near term.
Improving Macro Conditions Helped Fuel the Rally
The broader macroeconomic environment also played an important role in Bitcoin’s recent rebound. Reports suggesting that diplomatic discussions between the United States and Iran could resume helped ease geopolitical concerns that had previously driven investors toward defensive assets. As tensions appeared to soften, capital flowed back into risk-sensitive markets, including equities, commodities, and cryptocurrencies.
The relationship between Bitcoin and traditional financial markets was evident during the rally. On the same day Bitcoin reclaimed $65,000, US equities also moved higher, supported by strong corporate earnings and renewed optimism in the technology sector. In risk-on environments, Bitcoin tends to behave similarly to high-growth assets, benefiting from improved investor sentiment.
The significance of this shift becomes clearer when compared with earlier periods of heightened geopolitical uncertainty. During previous escalations in US-Iran tensions, Bitcoin ETFs experienced substantial outflows, including a single-day withdrawal of approximately $424.7 million, highlighting how sensitive institutional flows have become to macro developments. As geopolitical risks eased, investor appetite returned and ETF inflows resumed.
This improvement in sentiment directly challenges one of the key bearish arguments for Bitcoin. Critics have maintained that institutional demand remains weak and that ETF inflows are unlikely to recover meaningfully. However, a sustained risk-on environment—supported by easing geopolitical tensions and resilient corporate earnings—could encourage institutions to reallocate capital toward risk assets, including Bitcoin.
At the same time, the geopolitical backdrop remains fragile. Any renewed escalation could quickly reverse the current trend, driving investors back toward traditional safe-haven assets and weakening demand for cryptocurrencies. As a result, the same macro conditions that have supported Bitcoin’s rebound also represent one of its greatest risks.
The Federal Reserve Remains the Biggest Near-Term Risk
Despite improving flows and sentiment, attention is increasingly turning to the Federal Reserve’s July 28–29 policy meeting, which many investors view as the most important event for Bitcoin’s near-term outlook.
Current market expectations suggest roughly a 70% probability that the Fed leaves interest rates unchanged, with only a small chance of a surprise policy move. While a rate cut appears unlikely, even a neutral decision could influence risk assets depending on the tone of the Fed’s communication.
The Fed has been a major factor behind Bitcoin’s weakness this year. June’s sharp decline occurred amid a combination of persistent ETF outflows and a central bank that showed little willingness to ease monetary policy. Higher interest rates generally reduce the appeal of speculative and growth-oriented assets, including cryptocurrencies.
The primary concern for investors is asymmetrical risk. A rate hold is largely priced into markets and may have a limited impact on its own. However, a more hawkish-than-expected message—or an unexpected rate increase—could trigger a sharp reaction across risk assets. Given Bitcoin’s high sensitivity to changes in investor sentiment, it would likely experience outsized volatility under such a scenario.
On the other hand, a more dovish tone could provide significant support. If the Fed acknowledges signs of moderating inflation and hints at a more accommodative policy outlook later in the year, the current risk-on momentum could accelerate. In that case, Bitcoin may have a clearer path toward $68,000 and potentially higher levels.
The period leading up to the Fed meeting is therefore critical. Bitcoin has already regained the important $65,000 threshold and briefly touched $66,000, supported by ETF inflows, improving macro sentiment, and favorable on-chain data. Whether those gains can be consolidated into a sustainable uptrend will likely depend on how markets position themselves ahead of the Fed decision and how policymakers ultimately shape expectations for the remainder of the year.
For now, ETF demand, declining exchange balances, and improving risk appetite provide support for the bullish case. However, the Federal Reserve remains the single most important variable that could either extend the rally or abruptly halt it.
Many investors focus heavily on domestic markets, particularly in the United States, where stocks account for roughly 65% of global equity market capitalization. However, this still leaves about 35% of the world’s investable equity opportunities outside the U.S. A portfolio concentrated solely in one country may miss significant growth potential and expose investors to unnecessary concentration risk.
The Myth of Automatic Global Diversification
Some investors believe they already have international exposure because large U.S. companies generate a substantial portion of their revenue overseas. However, owning multinational U.S. corporations is not the same as investing directly in foreign markets. International investments provide exposure to different economies, regulatory systems, currencies, and political environments that domestic stocks cannot fully replicate.
Another concern is concentration risk within major U.S. indices. The largest companies now account for an increasingly large share of benchmark indexes, meaning investors may be more exposed to a handful of mega-cap stocks than they realize.
Four Ways to Improve Global Diversification
1. Gain Growth Exposure Through Emerging Markets
Emerging economies such as India, Brazil, Indonesia, and China offer access to expanding populations, rising consumer demand, and faster economic growth. Exchange-traded funds (ETFs) focused on these regions can enhance portfolio growth potential while adding geographic and currency diversification.
2. Add Stability with Developed International Markets
Countries including Japan, Canada, Australia, and those in Western Europe host many established companies with strong balance sheets and dividend-paying histories. Developed-market equities often behave differently from U.S. stocks, helping reduce portfolio volatility during periods of market stress.
3. Diversify Income Through International Bonds
International fixed-income investments can provide exposure to different interest-rate cycles and monetary policies. They also introduce foreign-currency exposure, helping reduce reliance on the U.S. dollar while potentially offering attractive yields.
4. Invest in Global Real Estate and Infrastructure
Global infrastructure assets such as utilities, transportation networks, and renewable energy projects can provide stable, defensive returns. International real estate investments further diversify a portfolio by accessing property markets whose cycles may differ from those in the United States.
Bottom Line
A well-diversified portfolio extends beyond national borders. While the U.S. remains one of the world’s most important investment destinations, relying exclusively on domestic assets can create concentration risks and limit long-term opportunities. By incorporating emerging markets, developed international equities, global bonds, and overseas real assets, investors can build a more balanced portfolio positioned to benefit from growth across the global economy.
EUR/USD edges higher to around 1.1405 during Wednesday’s Asian trading session. Elevated energy prices are raising concerns about renewed inflationary pressures, reinforcing expectations that the European Central Bank may maintain a tighter policy stance. Meanwhile, geopolitical tensions remain in focus after President Donald Trump downplayed the chances of near-term negotiations with Iran, as US military operations against the country entered an eleventh consecutive night.
EUR/USD posts modest gains near 1.1405 during Wednesday’s early Asian trading hours, supported by the European Central Bank’s increasingly hawkish outlook. The Euro finds demand against the US Dollar as investors position ahead of the ECB’s policy announcement scheduled for Thursday.
European sovereign bonds advanced earlier this week as persistent geopolitical risks in energy markets and concerns over renewed inflation pressures led traders to anticipate a less accommodative ECB policy trajectory.
Although the ECB is broadly expected to keep its deposit rate unchanged at 2.25% at the July meeting, market pricing suggests rates could climb to 2.66% by December and 2.73% by February 2027. According to Reuters, investors have also fully priced in a rate hike for September.
On the geopolitical front, US President Donald Trump downplayed the likelihood of near-term talks with Iran as hostilities continued and Yemen’s Iran-backed Houthi forces renewed threats against shipping in the Red Sea. Trump warned on Tuesday that Washington would retaliate if maritime routes were disrupted, though he provided no details on the potential response.
Meanwhile, Iran’s senior military leadership stated that Tehran would broaden its military operations and target US and allied interests throughout the region should Washington strike Iranian nuclear facilities, according to Xinhua. The escalating Middle East conflict could strengthen demand for traditional safe-haven assets, including the US Dollar, potentially limiting further upside in EUR/USD.
President Trump warned that any Houthi attempts to disrupt critical Saudi oil export routes would be met with retaliatory military action.
An attack on a Kuwaiti oil tanker has underscored the persistent security risks facing key shipping lanes in the Persian Gulf.
Strikes targeting Black Sea export terminals threaten the main corridor responsible for transporting most of Kazakhstan’s crude oil exports.
WTI crude oil extended its rally for a second straight session, trading near $84.60 per barrel during Wednesday’s Asian session as growing supply concerns across several major export routes supported prices. The latest gains reflect rising geopolitical risks that now extend beyond the Middle East, raising fears of potential disruptions to global energy flows.
In the United States, President Donald Trump downplayed the prospects of near-term negotiations with Iran and warned that further military action remains possible. He also pledged a swift response if Iran-backed Houthi forces follow through on threats to target commercial vessels operating in the Red Sea.
The Red Sea has become an increasingly important export route for Saudi Arabia during the regional conflict. By diverting part of its crude shipments through pipelines to Red Sea ports, the kingdom has reduced its dependence on the strategically sensitive Strait of Hormuz. Nevertheless, maritime security concerns remain elevated, highlighted by a recent attack on a Kuwaiti tanker transporting oil products through the Gulf region.
Meanwhile, supply risks are not limited to the Middle East. Market participants are also watching repeated drone strikes targeting the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast. The facility serves as a crucial export gateway for Kazakhstan, handling most of the country’s crude oil shipments to international markets, making any disruption a potential threat to global supply.
Gold attracts renewed buying interest during Tuesday’s Asian session, although its upside remains limited. Persistent inflation concerns continue to reinforce expectations that the Federal Reserve will keep interest rates elevated, providing support for the US Dollar and reducing the appeal of the non-yielding precious metal. At the same time, lingering geopolitical tensions between the United States and Iran are underpinning demand for the greenback, prompting traders to remain cautious about chasing further gains in gold.
Gold (XAU/USD) extends its rebound during Tuesday’s European session, climbing to its highest level in four days around the $4,075 area as the US Dollar eases amid renewed hopes for diplomacy between Washington and Tehran.
The precious metal draws support after US Secretary of State Marco Rubio stated on Sunday that the United States remains willing to engage in negotiations with Iran despite the recent exchange of military strikes. The remarks have tempered demand for the US Dollar by encouraging optimism that the conflict could eventually be resolved through diplomatic channels.
However, Gold’s upside remains constrained as investors continue to price in the inflationary risks stemming from rising energy costs. Disruptions to oil shipments through the Strait of Hormuz, combined with Yemen’s Iran-backed Houthi movement announcing a maritime blockade targeting Saudi Arabia, have reinforced expectations of tighter global crude supplies. Higher oil prices could fuel inflation and strengthen the case for the Federal Reserve to maintain restrictive monetary policy for longer.
Market expectations continue to reflect that view. According to the CME FedWatch Tool, traders see roughly an 83% chance that the Fed will raise interest rates before the end of the year. The prospect of higher US borrowing costs supports the US Dollar and limits demand for non-yielding assets such as Gold.
Meanwhile, geopolitical tensions remain elevated despite the diplomatic signals. The United States has reportedly carried out a tenth consecutive night of strikes on Iranian targets, with the White House indicating that military operations will continue until President Donald Trump decides otherwise. Iran has responded with retaliatory attacks against US military facilities and allied infrastructure across the Gulf, keeping concerns over a broader regional conflict firmly in focus.
With geopolitical risks continuing to underpin the US Dollar’s safe-haven appeal and expectations for prolonged Fed tightening remaining intact, traders may prefer to wait for stronger confirmation before concluding that Gold has established a near-term bottom, particularly in the absence of major US economic data releases on Tuesday.
Gold H4 Chart
Gold continues to trade with a positive intraday tone after breaking above the 23.6% Fibonacci retracement of the decline from the July peak and pushing through a short-term descending trendline. This technical breakout strengthens the bullish outlook, while momentum indicators also show improving conditions. Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are pointing higher, indicating that selling pressure is gradually easing.
Even so, the broader near-term outlook remains cautious as long as XAU/USD stays below the 100-period Simple Moving Average (SMA) on the 4-hour chart and several key Fibonacci resistance levels. Any continued advance is therefore likely to encounter resistance first near the 38.2% Fibonacci retracement at $4,052.78, followed by the 100-period SMA at $4,067.29 and the 50.0% retracement at $4,081.40.
If bullish momentum extends beyond those levels, the 61.8% Fibonacci retracement at $4,110.01 could provide a more formidable resistance zone. On the downside, initial support is located around $4,017, where the 23.6% Fibonacci level aligns with the recently broken trendline. A stronger support base sits near $3,960.14, the key Fibonacci anchor, where buyers may step back in should the current pullback deepen.
