Insights 
VT 
Gold (XAU/USD) is trading higher, moving above $3,330 amid light US trading due to Independence Day. Liquidity may remain thin, potentially affecting Gold’s response to risk sentiment changes.
The week saw improved risk appetite with US trade talk progress ahead of the July 9 deadline. However, uncertainty over tariffs has resurfaced as President Trump discusses potential tariffs ranging from 10% to 70% for various nations.
The Big Beautiful Bill
The “Big, Beautiful, Bill” passed by the House aims to extend tax cuts and address immigration but concerns over fiscal sustainability persist. The bill raises the debt ceiling by $5 trillion, and the CBO estimates it could increase the national deficit by $3.3 trillion over ten years.
Short-term Gold gains are tempered by interest rate expectations despite employment data showing 147K jobs added and unemployment dropping to 4.1%. Technical analysis suggests XAU/USD is consolidating with potential breakout above $3,400, key levels are around $3,321 for support and $3,350 for resistance.
The US Dollar remains a central focus, heavily influenced by the Federal Reserve’s monetary policy. Quantitative easing and tightening by the Fed can significantly impact its value. These monetary policy tools determine the supply and demand dynamics of US Dollars in global markets.
In the early part of this week, what we’ve noticed is that gold has been ticking higher, with XAU/USD climbing past $3,330—albeit in thin trading conditions as US markets took a pause for Independence Day celebrations. Naturally, when market depth is reduced as it is now, even smaller orders can nudge prices more than they typically would. This doesn’t imply the movement lacks foundation, but responses to broader sentiment shifts could see amplification in either direction.
The rally has been loosely tethered to a recovery in risk appetite, spurred by a step forward in trade discussions that are expected to reach a conclusion—or possibly another delay—on 9 July. However, that optimism began to unravel towards the end of the week as Trump raised the prospect of steep new tariffs, ranging widely between 10% and 70%. While nothing has been formally enacted, the sheer scale floated is sufficient to unsettle cross-border flow assumptions.
A large economic package passed through the US House, referred to in grand terms by the President himself. The proposed legislation aims to extend current tax reductions and pushes through new immigration provisions. That said, it comes with a large price tag—lifting the debt ceiling by $5 trillion, and according to the Congressional Budget Office, increasing the federal deficit by $3.3 trillion across a decade.
Trading Analysis
For us watching closely, it’s clear that these fiscal developments could sow uncertainty in the bond market. Despite that, yields haven’t moved aggressively yet, likely because investor attention remains squarely on monetary policy cues. The latest employment figures, adding 147,000 jobs with unemployment slipping to 4.1%, may appear solid on the surface. Still, markets aren’t bracing for immediate rate adjustments. Instead, there’s a prevailing expectation that the Federal Reserve may tread lightly going forward.
On the charts, gold appears to be resting. It’s trading in a fairly narrow range between $3,321 and $3,350. Should prices press higher with volume support, attention would likely fall on the $3,400 area, where a breakout could gather meaningful momentum. Until then, this type of sideways movement suggests buyers are hesitant to commit unless a clearer macro driver emerges.
The US Dollar is, as ever, steering much of this. All of us in the derivatives space have to keep in mind that the Fed’s stance on liquidity—whether it’s injecting more via asset purchases or withdrawing it through balance sheet reduction—directly moves the currency. That in turn sways commodities priced in dollars, of which gold is the most responsive. Right now, markets are holding a neutral to mildly bearish bias on the Dollar, which is subtly supportive for metals.
As we move into the coming weeks, there’s plenty to watch. We’re setting alerts around US data releases and geopolitical soundbites, particularly anything that tips the needle on inflation expectations. The potential for volatility is increasing, but without clarity on fiscal or monetary policy paths, directional conviction remains low. Flat positioning or option-based hedges may be the approach that offers flexibility without overcommitting to a single narrative.
