Insights 
VT 
Political Concerns on Gold
Political interference concerns, involving President Trump and the recent firing of Bureau of Labor Statistics Commissioner Erika McEntarfer, have added market caution. Trump’s comments on the credibility of economic data and his upcoming appointments for the Fed and BLS positions are key issues for market watchers.
The US Factory Orders report showed a 4.8% month-on-month decline in June. Reaction to economic data and Fed guidance continue to shape market dynamics, with the US Dollar Index stabilised and US Treasury yields showing a modest recovery post-NFP report.
The Nonfarm Payrolls report revealed only 73,000 jobs added, falling short of the expected 110,000. The unemployment rate increased to 4.2%, coinciding with revised lower figures for prior months.
Gold’s price remains near $3,370, struggling to maintain momentum post an initial bounce. The Relative Strength Index and Moving Average Convergence Divergence suggest a lack of decisive market direction for Gold.
Central banks’ Gold reserves have climbed, with 1,136 tonnes added in 2022. Emerging economies are increasing their reserves, showcasing Gold’s role as a vital asset during economic turbulence.
Gold Market Outlook
Gold prices are influenced by geopolitical instability, interest rate trends, and the US Dollar’s performance. With its inverse correlation to risk assets and the US Dollar, Gold remains a hedge against market volatility and economic uncertainty.
Given the market’s current state, we see gold trading around $3,375, caught between opposing forces. Last month’s weak job report, with only 73,000 jobs added, has increased the odds of a Federal Reserve rate cut in September. This should be bullish for gold, but stabilising US Treasury yields are capping any significant price advance for now.
The path for the Fed seems to be leaning towards easing, especially after last week’s Consumer Price Index data showed core inflation dipping to 3.1%, a level not seen since late 2023. This slowing inflation, combined with the rise in unemployment to 4.2%, strengthens the argument for a rate cut. We believe traders should position for lower interest rates, which historically benefits non-yielding assets like gold.
Political uncertainty adds another layer of complexity that we must watch closely. President Trump’s recent comments on economic data and the upcoming appointments to the Fed and BLS are making markets nervous. We’re seeing this caution reflected in the derivatives market, where the CBOE Gold Volatility Index (GVZ) has climbed to 19.5, suggesting traders are pricing in bigger price swings in the weeks ahead.
The broader economic picture supports a cautious outlook, with US Factory Orders in June showing a sharp 4.8% decline. This slowdown points to underlying weakness in the economy, which typically increases gold’s appeal as a safe-haven asset. For derivative traders, this means long exposure to gold could be profitable if economic data continues to disappoint.
Looking at the bigger picture, we see a solid floor of support for gold prices from long-term institutional buying. Central banks added a staggering 1,136 tonnes of gold back in 2022, and this trend has not stopped. The World Gold Council’s report for the second quarter of 2025 confirmed that another 270 tonnes were purchased, primarily by emerging economies.
With technical indicators like the RSI showing a lack of direction, we think aggressive directional bets are risky right now. Instead, strategies that benefit from either a defined range or a potential spike in volatility seem prudent. Selling out-of-the-money puts is one way to collect premium, relying on the strong central bank demand to limit any major sell-offs.
