Mixed Signals Fail to Derail Market Rally

The market is once again facing heightened volatility due to a blend of bullish and bearish developments. As July nears its end, investors must learn to interpret “bad news as good news, and good news as even better news.” These signals arent about gold alone—they influence the broader economy and risk assets.

U.S.–Vietnam Trade Agreement: Tariffs Halved

The newly agreed 20% tariff isnt particularly low, but it marks a significant reduction from earlier negotiation frameworks.

Market reaction was positive, suggesting that the worst-case scenario had already been priced in. Any sign of a deal—no matter how small—is now seen as bullish.

ADP Employment Report: Job Growth Turns Negative

The ADP report revealed a contraction in private sector employment. ADPs Chief Economist noted that while layoffs remain rare, companies are reluctant to hire or replace workers who resign—resulting in a slight uptick in job losses last month. Hiring slowdown has yet to significantly impact wage growth.

AI Reshapes Labor Markets: High-Paying Jobs at Risk

We are entering an AI-driven era. Generative AI is already replacing some high-income roles. As we move toward physical AI robotics, many traditional jobs will disappear—but new ones will emerge.

A closer look at sector-level employment shows that layoffs are concentrated in three major industries: financial activities, professional & business services, and education & health services. These sectors reflect a broader trend: companies are becoming more cautious about hiring costly human capital.

• Financial Activities

• Typical Roles: Investment bankers, financial analysts, accountants, insurance brokers, asset managers

• Salary: Commonly ranges from $80,000 to $150,000+

• Professional & Business Services

• Typical Roles: Management consultants, legal advisors, HR executives, marketing strategists, technical service providers

• Salary: Generally between $60,000 and $130,000+

• Education & Health Services

• Typical Roles: Professors, school administrators, physicians, registered nurses, clinical researchers

• Salary: Health roles often exceed $200,000; education varies widely (lower for public teachers, higher for professors)

(Chart 3: Major Layoff Sectors in ADP Report | Source: ADP Report)

Microsoft Layoffs Echo Labor Trends

Microsoft announced 9,000 layoffs in alignment with the ADP report. The company is restructuring to adapt to the AI era. With tariffs potentially raising operating costs, businesses are seeking ways to maintain margins.

Trumps vision of “reindustrializing America” hinges on one thing: increasing labor productivity. The chart below shows U.S. labor productivity bottoming out in Q4 2022 and rebounding strongly, driven by the end of inventory cycles and rising AI adoption.

Both service and manufacturing sectors are seeing improved efficiency. Labor productivity is becoming the core driver of corporate profitability. This trend will only intensify as more trade deals are finalized. Automation and layoffs are just the beginning.

July Market Catalysts: More Volatility Ahead

July has introduced a new wave of volatility, with traders increasingly split between optimism and caution. But remember: the ones who succeed are not those who resist change. Is a market correction imminent？ Its getting closer—but not just yet. The bullet still has some distance to travel.

Gold Technical Outlook

Gold prices have been increasingly volatile, driven by macroeconomic data and news events. The price is currently fluctuating around the 50% Fibonacci retracement level. Traders should focus on daily candlestick patterns for swing trades. If today's candle forms a bearish engulfing or bearish harami pattern, it could signal a reversal and justify short positions. For now, a wait-and-see approach is advisable.

• Support: 3247 / 3325

• Resistance: 3349

Risk Disclaimer: The above analysis, prices, and information are intended for general market commentary and do not represent the views of this platform. Viewers should exercise caution and bear all associated risks when trading.