Gold Prices Hold Gains Amid US Fiscal Deficit Concerns, Trade Uncertainty

Economic

Commodity

Summary:

Gold prices held steady in Asian trade on Wednesday after sharp gains in the past two sessions, supported by U.S....

Gold prices held steady in Asian trade on Wednesday after sharp gains in the past two sessions, supported by U.S. fiscal deficit concerns as the Senate passed President Donald Trump’s tax-and-spending megabill.

Bullion was also supported by uncertainty over U.S. trade deals ahead of Trump’s July 9 tariff deadline.

Spot Gold was largely unchanged at $3,337.25 an ounce, while Gold Futures for August edged 0.1% lower to $3,347.40/oz by 01:52 ET (05:52 GMT).

Gold has risen more than 2% this week so far, erasing losses from last week when Israel-Iran ceasefire reduced its safe-haven appeal.

Trump’s tax-cut bill clears Senate, sparks national debt concerns

Senate Republicans narrowly passed Trump’s sweeping tax-cut and spending bill on Tuesday.

The bill—aimed at cutting taxes, curbing social programs, and increasing military and immigration enforcement funding—is projected to add $3.3 trillion to the national debt.

It will now move to the House of Representatives for potential final approval, with Trump aiming to sign it into law by the July 4 Independence Day holiday.

Meanwhile, Federal Reserve Chair Jerome Powell repeated on Tuesday that the central bank will wait and learn about tariff impacts before cutting rates, defying Trump’s calls for swift, deep cuts.

Investors parsed Powell’s recent comments as slightly dovish as he did not rule out the chances of a rate cut next month.

Markets now await Thursday’s nonfarm payrolls report to gauge the chances of a July rate cut, while a reduction in September is largely priced in.

Trump’s July 9 tariff deadline looms

Expectations of lower interest rates and U.S. fiscal deficit concerns supported gold prices, while uncertainty over U.S. trade deals ahead of the looming July 9 deadline further aided sentiment.

Trump said he had no plans to extend the deadline and would instead notify countries of the tariff rates they will face through formal letters.

He said India may ease curbs on U.S. firms, opening the door to a deal, but added that he was doubtful about a deal with Japan.

Metal markets subdued, copper rises with dollar near 3-½ yr low

The US Dollar Index remained subdued in Asian trading hours, wallowing near its lowest level since February 2022.

Still, metal markets were largely subdued as investors sought clarity on trade deals and sectoral tariffs.

Silver Futures were largely muted at $36.05 per ounce, while Platinum Futures edged up 0.2% to $1,369.05.

Meanwhile, benchmark Copper Futures on the London Metal Exchange rose 0.4% $9,968.65 a ton, while U.S. Copper Futures jumped 1.6% to $5.1165 a pound.

Source: Investing

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Gerik

Russia-Ukraine Conflict

Political

Resuming Dialogue After Nearly Three Years

This phone call marks a significant thaw after nearly three years of frozen diplomatic ties, especially as France had been one of Ukraine’s strongest supporters within Europe. According to the Kiel Institute, Paris has committed over €3.7 billion in military aid since the conflict escalated in early 2022. However, Macron has recently adopted a more restrained tone, acknowledging the limits of France’s capacity to support Ukraine and suggesting that Europe must now consider resuming dialogue with Russia as part of any potential peace agreement.

This development is more than symbolic — it may open the door to renewed direct diplomacy between Moscow and a key EU and NATO power.

Moscow's Message: Blaming the West and Defining Terms

According to the Kremlin, Putin blamed Western nations for the Ukraine war, arguing that they ignored Russia’s security concerns for years and used Ukraine as a staging ground against Moscow. He reiterated Russia’s position that any resolution must be “comprehensive and long-lasting,” based on the “new territorial realities” — a phrase referencing the areas Russia has annexed from Ukraine.

While the tone was assertive, the fact that Putin is now engaging directly with Macron suggests that Moscow may be looking for leverage or political openings as Western sanctions and economic pressure continue to mount.

Macron’s Shift: From Confrontation to Strategic Reassessment

Macron, once a vocal advocate for strong support to Ukraine, has softened his stance in recent months. Acknowledging that France can no longer endlessly provide weapons, he recently urged European NATO members to think seriously about restarting dialogue with Moscow. This shift may reflect broader fatigue in Europe over prolonged war costs and a desire to reposition France as a potential broker in future peace efforts.

While this doesn’t mean a policy reversal, it points to a more pragmatic French strategy — preparing for the “day after” the war ends.

Middle East Concerns and Nuclear Nonproliferation: A Shared Interest

Beyond Ukraine, both leaders discussed the recent escalation between Israel and Iran. They agreed that diplomacy is the only viable path and emphasized the need to uphold global nuclear nonproliferation norms. They highlighted Iran’s legitimate right to pursue peaceful nuclear energy under the Non-Proliferation Treaty (NPT), underlining a rare area of shared concern between Russia and France in an increasingly fragmented global order.

This shared stance suggests that while Europe and Russia remain adversaries on Ukraine, they could still cooperate on multilateral issues like arms control and regional stability.

Could France Be Russia’s Way Back to the European Table?

Though no major breakthroughs were announced, the Putin–Macron call may indicate a subtle pivot in diplomatic postures. Russia may be testing the waters for reengagement, while France — strained by war fatigue and financial constraints — appears to be recalibrating its role from combatant ally to potential mediator.

If this trend continues, Europe could be entering a new phase of geopolitical recalibration. Not out of goodwill — but out of necessity, and long-term strategic calculation.

Source: France24

Risk Warnings and Disclaimers

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Blue River

Forex

Technical Analysis

The Loonie is having trouble extending its downswings near a key support zone!

Think it means CAD/JPY is ready to extend a longer-term uptrend?

Let’s take a closer look at the 4-hour time frame!

CAD/JPY: 4-hour

CAD/JPY 4-hour Forex Chart

Japanese yen traders found some support from slightly better-than-expected manufacturing surveys and comments from BOJ Governor Ueda at the ECB Forum, where he noted that underlying inflation remains below the central bank’s 2% target. Still, the yen gave back some of its weekly gains on Tuesday as geopolitical tensions and trade war concerns began to ease.

Over in Canada, a modest rebound in crude oil prices and signs of progress on a potential U.S.-Canada trade deal helped limit the Loonie’s losses, even though it remains one of the less favored major currencies when risk appetite returns.

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Canadian dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

CAD/JPY has been slipping since hitting resistance at 107.00 last week, and is now trading near the 105.00 psychological level.

As you can see, this area lines up with the 100 SMA on the 4-hour chart, the S1(104.67) Pivot Point, and the ascending channel support that has held since May.

If the pair holds above 105.00 and prints bullish candlesticks, it could resume its longer-term uptrend. A move toward the 106.00 Pivot Point or even a retest of the 107.00 highs would be on the table.

But if downside momentum picks up and CAD/JPY breaks below the channel support, the uptrend could be in trouble. In that case, watch for a possible drop toward the 104.00 handle or the S2 Pivot Point near 103.69.

Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.

Source: BabyPips

Risk Warnings and Disclaimers

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Gerik

Economic

Cryptocurrency

From Skepticism to Strategy: China’s Pivot on Stablecoins

Despite its historic ban on crypto trading and mining, China is now showing growing interest in stablecoins—privately issued digital tokens pegged to traditional currencies. Triggered by recent remarks from People’s Bank of China (PBOC) Governor Pan Gongsheng and former central bank chief Zhou Xiaochuan, the conversation has shifted from rejection to exploration. Their comments during the Lujiazui Forum highlighted stablecoins’ potential to reshape global finance and reduce reliance on politicized traditional systems like SWIFT.

Morgan Stanley supports the idea of using Hong Kong’s financial system to test offshore yuan-backed stablecoins. This move would allow China to experiment with global digital finance innovations while avoiding violations of capital control laws. The push, however, is also reactive: just hours before the Shanghai conference, the U.S. Senate passed a bill regulating stablecoins, giving President Trump another legislative win and reinforcing the dollar’s digital dominance.

Trump’s Digital Dollar Push Raises Stakes for China

The United States is positioning stablecoins as a strategic extension of the dollar. Treasury Secretary Scott Bessent publicly endorsed stablecoins as a tool to strengthen—not weaken—dollar dominance, claiming they offer more trust than Europe’s or China’s central bank digital currencies (CBDCs). This stance aligns with President Trump’s broader digital asset agenda and aligns regulatory policy with financial innovation.

As stablecoins grow—projected to reach $3.7 trillion by 2030—most remain dollar-pegged and backed by U.S. assets, consolidating America's first-mover advantage. Economists like JD.com’s Shen Jianguang now warn that if China fails to develop competitive yuan-linked stablecoins, it risks ceding leadership in the next era of global finance.

Hong Kong as a Launchpad for Digital Yuan

Hong Kong’s new regulatory framework for fiat-referenced stablecoins offers a convenient backdoor for Chinese firms. JD.com and Ant Group are among the first expected to apply for stablecoin licenses, aiming to slash cross-border payment costs by up to 90% and reduce settlement times to under 10 seconds. Zhejiang China Commodities City Group, which manages the world’s largest wholesale goods market, has also declared interest in entering the stablecoin space.

This aligns with broader efforts to promote the yuan in trade settlement. In February 2025, over 30% of China’s goods trade was settled in yuan—a decade high—yet global usage remains limited. The failure of China’s official digital currency, the e-CNY, to gain traction, and the uncertainty surrounding the mBridge cross-border CBDC project after BIS pulled out, adds urgency to finding alternative digital channels.

Dual-Track Strategy and Global Perception Challenge

Chinese economists suggest a dual-track strategy: expanding traditional channels like the CIPS system and currency swaps, while using offshore yuan stablecoins as a flexible and politically safer alternative. Yet, barriers remain. As Cornell professor Eswar Prasad notes, offshore yuan stablecoins will struggle unless Beijing unifies its onshore and offshore exchange regimes.

The rise of stablecoins could also backfire domestically, potentially forcing China to accelerate reforms in capital mobility and exchange rate flexibility—changes Beijing has long resisted. Still, pressure from a fast-evolving global digital economy may turn stablecoins into a catalyst for long-overdue liberalization.

The global currency race is no longer just about traditional fundamentals but also about technological adaptability and geopolitical foresight. As the U.S. aggressively backs stablecoins to extend the dollar’s reach, China faces a make-or-break moment. Failing to embrace yuan-backed stablecoins could mean strategic retreat in the financial arena. Yet, doing so may require the country to confront deep-rooted structural challenges, potentially setting the stage for a transformative shift in how China engages with the world economy.

Source: Bloomberg

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James Whitman

Economic

A seasonal lift for Asian equities in July may be hard to come by this year, as tariff and macroeconomic concerns dampen sentiment.

Markets are bracing for heightened volatility ahead of the July 9 deadline for countries to cut trade deals with the US. Uncertainty over the outcome of these negotiations poses a hurdle for regional shares to maintain an average return of 1.36% for July — the second-best performing month of the year — over the past decade.

Investors are “somewhat holding back on fresh allocations to emerging Asia,” said Christian Nolting, global chief investment officer at Deutsche Bank’s Private Bank. “While recent comments from high-level negotiators suggest constructive progress in ongoing talks with major Asian trading partners,” uncertainties remain high, given that trade disputes during US President Donald Trump’s first term lasted one and a half years, he added.

While the MSCI Asia Pacific Index has gained for three consecutive months through June, a potential return of “Liberation Day” tariff rates could send shares plunging in a similar way they did in early April.

Trump ruled out delaying the July 9 deadline for imposing higher levies on trading partners and renewed threats to hike tariffs on Japan. That saw Japanese shares leading losses in Asia early on Wednesday, with the Nikkei 225 down about 1%.

Even if trade deals materialise, some levels of tariffs are likely to stay. That would be a drag on the region’s export-led economies. A number of central banks in Asia have lowered their growth outlooks for the year. Meanwhile, elevated US interest rates may curb the scope for Asian central banks to further lower borrowing costs.

“The third quarter looks to have lots of dangerous potholes, with higher inflation and the prospect of slower growth,” said Gary Dugan, chief executive officer of the Global CIO Office. “We are not so convinced [that] the US Federal Reserve (Fed) will have sufficient reasons to cut rates at the pace the market prices.”

To be sure, a milder-than-expected tariff outcome and more dovish signalling from the Fed may encourage flows into the region. Current positioning in Asian assets leaves room for upside, said Gary Tan, a portfolio manager at Allspring Global Investments.

The US central bank has refrained from cutting interest rates this year, as it assesses the impact of Trump’s tariffs on inflation. The Trump administration though, has been applying pressure to lower borrowing costs, and two Fed governors in recent days have said a cut could be appropriate as soon as July.

The MSCI Asia Pacific gauge has risen 12% so far this year, outperforming the US, with shares in South Korea and Hong Kong seeing renewed interest. Still, some markets in Southeast Asia, where countries were hit with among the highest tariff rates, remain under pressure.

“We continue to expect choppy markets over the summer,” Nomura Holdings Inc strategists, including Chetan Seth, wrote in a recent note. “We recommend [that] investors focus on stock selection and on idiosyncratic themes that provide insulation from policy uncertainty and ones that offer better visibility.”

Source: Theedgemarkets

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Gerik

Economic

Tariffs Blamed for Blocking Rate Relief

Jerome Powell’s confirmation that President Donald Trump’s tariffs are the primary obstacle to cutting interest rates has crystallized a hard truth for investors: policy choices, not economic fundamentals alone, are shaping the monetary trajectory. Without the inflationary push caused by these tariffs, the U.S. might already be experiencing a fed funds range of 3.75% to 4.25%, instead of the current 4.5% to 4.75%.

This divergence between reality and potential has created what CNBC describes as a “what-could-have-been” economic environment, where past projections of two 2025 rate cuts remain technically alive, but politically hamstrung. Tariffs, particularly in their unexpected size and reach, have lifted inflation expectations enough to stall Fed action.

Market Pullback from Record Territory

The S&P 500 edged down 0.11% Tuesday from its all-time high, a modest retreat but symbolic of growing caution. Tesla led declines after Trump’s suggestion that DOGE investigate subsidies received by Elon Musk’s companies, a move that added political uncertainty to an already volatile tech sector.

European markets fared little better, with the Stoxx 600 slipping 0.21% as euro zone inflation ticked up to 2%. A synchronous inflation uptick on both sides of the Atlantic has reintroduced fear of monetary stalling, even as growth cools.

Figma’s IPO and the Trump Megabill: Risk and Opportunity

Amid the macro backdrop, Figma filed for its long-awaited IPO, aiming to trade on the NYSE. With a previous valuation of $12.5 billion during a tender offer last year, Figma’s public debut is poised to test investor appetite in a cautious but hopeful equity market.

Meanwhile, Trump’s $3.3 trillion megabill narrowly passed the Senate after a tie-breaking vote from Vice President JD Vance. While controversial for its debt implications, several analysts believe the fiscal stimulus could temporarily lift U.S. growth, offsetting some rate hike drag and providing a mid-year catalyst for equities and consumption.

Bond Market: A Rare Window Opens

BlackRock’s Rick Rieder described current fixed-income conditions as a “generational opportunity” for income investors. With yields still historically elevated, especially for corporate and municipal bonds, the disinflationary outlook and potential rate cuts later in the year make this a rare alignment of income and price appreciation potential.

In a significant geopolitical and technological move, Huawei open-sourced its Pangu AI model series. This reinforces its transformation from a telecom provider into a full-spectrum AI player, seeking to dominate both hardware and software despite U.S. chip export controls. Paul Triolo of DGA-Albright Stonebridge describes Huawei’s repositioning as that of a “muscular technology juggernaut.”

By giving global developers access to Pangu’s capabilities, Huawei aims not just to survive export restrictions but to embed its systems into the core of global AI infrastructure, a strategy that mirrors China’s broader attempt to build tech sovereignty.

The global economy stands at the intersection of aggressive fiscal policy, unresolved trade tensions, and delayed monetary easing. While the U.S. market continues to flirt with record levels, the absence of expected rate cuts — due largely to tariffs — clouds what might otherwise be an unequivocally bullish landscape. With the July 9 tariff deadline looming, non-farm payrolls due Thursday, and OPEC+ set to meet this week, the path forward remains murky but charged with potential for both volatility and value.

Source: CNBC

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Kevin Du

Cryptocurrency

Bitcoin prices faced a correction on July 2, 2025, fueled by announced tariff measures from President Donald Trump, influencing market sentiments and trading activity on Indonesian exchange Tokocrypto.

This event highlights the enduring impact of geopolitical factors on cryptocurrency markets, with immediate market reactions suggesting increased volatility and strategic adaptability from exchanges like Tokocrypto.

Bitcoin's July 2025 Correction and Tokocrypto's Role

On July 2, 2025, Bitcoin's price experienced a notable correction driven by tariffs announced by Donald Trump. Tokocrypto, Indonesia's prominent exchange, remains pivotal in managing the dynamics caused by such macroeconomic influences.

Tokocrypto's market leadership, underscored by its acquisition by Binance, highlights its role in the cryptocurrency exchange ecosystem in Indonesia. It now serves over 1.5 million users, holding a significant national market share.

Geopolitical Tensions Shake Cryptocurrency Markets

Bitcoin's correction has sparked discussions about the exchange's strategic positioning to handle such market fluctuations. Traders and analysts watch for changes across other cryptocurrencies affected by broader market sentiments.

Historically, geopolitical changes like tariffs influence Bitcoin and Ethereum significantly. Such events might increase volatility on platforms aligned with asset diversification, as evidenced by Tokocrypto's recent expansion efforts in trading pairs.

Market Reactions to Trump’s Tariff Announcements

Similar historical events, such as trade tensions, often lead to corrections in Bitcoin prices, affecting the wider crypto market landscape. Layer 1 assets like BTC and ETH historically react to these catalysts.

Expert analysis from Kanalcoin suggests potential outcomes influenced by historical trends. Tokocrypto's resilience is noted, supported by its comprehensive asset offerings designed to offset short-term disturbances.