The Chicago Purchasing Managers’ Index (PMI) in the United States recorded a reading of 47.1 in July 2025. This figure surpassed the anticipated level of 42, signalling a stronger than expected performance.
In currency movements, the Euro-US Dollar pair managed to reverse its earlier downward trend. The EUR/USD climbed back to the 1.1460 area despite the US Dollar’s continued strength.
Gold Faces Resistance
Gold is encountering resistance as it tries to break through the $3,300 threshold per troy ounce. The precious metal’s current price movement comes amid declining US yield rates and slight losses in the Greenback.
Ripple’s (XRP) price dropped, trading at $3.09, with effort to surpass $3.32 proving unsuccessful. This retreat reflects low retail demand and shifting market sentiment following the US Federal Reserve’s rate decision.
The Federal Open Market Committee (FOMC) is debating the implications of tariffs, exploring potential risks to either inflation or labour markets. The ongoing discussions reflect divisions on how tariff issues might affect the economy.
The Chicago PMI reading, while better than expected, is still in contraction territory below 50. This suggests the economy is not collapsing but is far from booming, creating uncertainty for future Federal Reserve policy. Historically, similar recoveries from low PMI levels, like we saw in late 2023, often lead to range-bound markets rather than a sustained rally.
Market Volatility Ahead
With the FOMC openly divided on the impact of tariffs, we anticipate increased market volatility in the weeks ahead. We are looking at the CBOE Volatility Index (VIX), which has recently ticked up 5% to 19.5, as this situation mirrors the whipsaw markets of the 2018-2019 trade disputes. Buying VIX call options or options on volatility ETFs could be a prudent hedge against sudden policy-driven market swings.
The Euro’s ability to climb back to 1.1460 against a strong dollar is noteworthy and warrants our attention. This level is a critical pivot point that historically acted as major resistance back in the 2018-2020 period. We should consider long-dated call options if we believe this is a structural breakout, or short-term puts if we see it as a failure at resistance.
Gold is facing a significant barrier at the $3,300 level, which is a psychological and technical hurdle. Open interest data from major exchanges shows a heavy concentration of call options sold at this strike price, acting as a ceiling for now. We are looking to sell call spreads to capitalize on this resistance, while keeping an eye on falling US yields which could eventually fuel a breakout.
Ripple’s rejection at the $3.32 mark is a bearish signal, especially given its proximity to its inflation-adjusted 2018 peak. The reported low retail demand suggests this is not a temporary pullback but a more fundamental shift in sentiment. For now, we see more value in buying put options or establishing short positions via futures until buying volume returns.
