Gold Rebounds from Lows as Market Refocuses on Tariff Risks

Market Overview

With the ceasefire between Israel and Iran now in effect, risk-off sentiment has eased, sparking a sharp rebound in U.S. equities. All three major indexes rallied over 1%, hitting near four-month highs, with the Nasdaq 100 closing at its highest level since February. Fed Chair Jerome Powell reiterated a wait-and-see approach but did not rule out an early rate cut, which markets interpreted as dovish. U.S. Treasury yields fell to six-week lows, boosting bond prices, while the U.S. dollar index tumbled intraday, nearing a three-year low. As risk appetite returned, safe-haven assets broadly retreated—oil plunged over 6% for a second straight day, erasing all gains since the onset of the Israel-Iran conflict. Gold also dropped more than 2% intraday, with futures hitting a monthly low, reflecting a renewed risk-on tone in the market.

Hot Topics to Watch

● EU Prepares Broader Tariff Countermeasures

Björn Seibert, Chief of Staff to European Commission President Ursula von der Leyen, said the EU must align its internal stance and prepare strong retaliatory tariffs ahead of the July 9 trade negotiation deadline with the U.S. The bloc is considering a sweeping package of tariffs on $100 billion (€95 billion) worth of American goods. Additional measures targeting the services sector are also under review, including a potential digital tax on U.S. tech firms and restrictions on public procurement contracts for American companies.

● Powells First Day of Congressional Testimony

When asked about the possibility of a July rate cut, Powell responded that “many paths are possible,” highlighting that softer inflation and labor market weakness could justify early action. He noted that data from June and July will be critical in assessing the inflationary impact of tariffs, some of which may ultimately be borne by consumers. While acknowledging upside inflation risks, Powell stressed that if inflation remains contained, the Fed would be ready to “cut rates promptly.” He also pushed back on the idea of a weakening dollar, affirming its role as the worlds leading safe-haven currency. Media interpretations suggest that while a July cut is on the table, September appears more likely as a starting point for easing.

Key Data to Watch

🕙 22:00 GMT+8 – U.S. New Home Sales (Annualized, May)

🕥 22:30 GMT+8 – U.S. Weekly EIA Crude Oil Inventory Report (ending June 20)

🗣️ 22:00 GMT+8 – Fed Chair Jerome Powell testifies before the Senate Banking, Housing, and Urban Affairs Committee on the Fed's semiannual monetary policy report