Solid Goold Trading

Monday’s Edition

With Nick Goold

The S&P 500 Index and Nasdaq Composite Index reached new record highs during the week, supported by strong corporate earnings and generally positive economic data. U.S. inflation figures (CPI and PPI) came in below expectations, suggesting that recent tariff increases have not yet pushed up consumer prices. Retail sales and the Michigan Consumer Sentiment Index also beat forecasts, giving equity markets another boost.

The U.S. dollar continued its recovery as President Trump reduced pressure on the Federal Reserve to cut interest rates. Gold traded sideways but remained well supported at lower levels, as investors stayed cautious. Crude oil prices dipped slightly after tensions eased in the Middle East, lowering concerns over supply disruptions.

Bitcoin surged to record highs after the U.S. Congress passed the country’s first major standalone crypto bill. Institutional buying and growing interest in Bitcoin ETFs also supported the rally. Overall, markets remained strong despite ongoing trade tensions and the upcoming August 1 tariff deadline.

Markets This Week

U.S. Stocks

Strong U.S. corporate earnings, lower-than-expected inflation data, and solid retail sales helped the S&P 500 and Nasdaq reach new record highs last week. However, the Dow traded sideways and failed to break to fresh highs, which is a concern for some investors. While the market appears less worried about the negative impact of higher tariffs, trade risks still remain. The Dow's inability to join the rally suggests the market may move sideways or lower in the near term. Key support levels are at 44,000, 43,000, and 42,000, while resistance is now seen at 45,000, 45,100, and 45,500.

Japanese Stocks

The Nikkei pushed higher during the week, briefly testing resistance at 40,000円, supported by strong U.S. equities and a weaker yen. However, concerns over stalled trade negotiations with the U.S. and uncertainty around the Japanese election led to a pullback before the weekend. Despite the late decline, the index still finished the week with a 1% gain. The overall outlook remains unchanged, with a preference for selling opportunities as long as the market stays below the key 40,000円 resistance level. Resistance remains at 40,000円, 41,000円, and 42,000円, while support levels are unchanged at 39,000円 and 38,000円.

USD/JPY

USD/JPY had another strong week, breaking above the May highs as the U.S. dollar gained broadly against major currencies. Concerns that new tariffs could hurt the Japanese economy are making it harder for the Bank of Japan to consider rate hikes, encouraging continued yen selling. While the pair is still trading near key resistance levels, some sideways movement is possible in the short term. However, the medium-term uptrend remains intact, and buying on weakness continues to be the preferred strategy. Support levels are at 148 and 147, while resistance is seen at 149 and 150.

Gold

Gold traded sideways throughout the week as a stronger U.S. dollar encouraged some selling, which was balanced by continued strong buying interest at lower levels. Despite firm equity markets, gold held up well, showing that it remains a popular asset ahead of the August 1st tariff extension deadline. Range trading remains the preferred short-term strategy, with the market expected to stay between support at $3,250 and $3,200 and resistance at $3,400.

Crude Oil

It was a quiet week for crude oil, with resistance at $70 triggering some selling as Middle East tensions remained unchanged. On the downside, support at $65 held firm, helped by better-than-expected U.S. economic data, which was viewed positively by the market. The 10-day moving average is now pointing sideways, and with prices sitting in the middle of the $65 to $70 range, there is no clear direction in the short term. Until a breakout occurs, range trading remains the preferred strategy. Resistance is seen at $70, $75, and $80, while support holds at $65 and $60.

Bitcoin

Bitcoin reached another record high early last week as growing optimism around U.S. crypto-friendly regulation continued to drive the market higher. However, some traders took profits, leading to a brief pullback that tested support at the 10-day moving average, which held firm. The market has risen sharply this month, and further profit-taking is likely if prices fall below the 10-day average. In the short term, range trading is preferred, while medium-term traders should look to buy on weakness. Resistance is seen at $125,000 and $150,000, while support lies at $115,000, $110,000, and $105,000.

This Week’s Focus

Monday: U.S. Leading Index
Tuesday: Australia RBA Meeting Minutes, U.S. Fed Chair Powell Speaks
Wednesday: Japan Bank of Japan Core CPI, U.S. Existing Home Sales
Thursday: Japan au Jibun Bank Services PMI, E.U. HCOB Eurozone Manufacturing PMI, U.K. S&P Global Composite PMI, E.U. ECB Interest Rate Decision, U.S. Initial Jobless Claims, U.S. S&P Global Manufacturing PMI, E.U. New Home Sales
Friday: Japan Tokyo Core CPI, U.K. Retail Sales, U.S. Durable Goods Orders

Ongoing U.S. trade negotiations remain a key focus for markets, especially talks with the EU and Japan. While investor sentiment is still optimistic, there have been no signs of real progress yet. In Japan, the results of the Upper House election will be closely watched and could cause increased volatility in the yen and Nikkei index.

The European Central Bank is expected to keep interest rates unchanged, so attention will turn to the speech following the announcement. Important economic data, including purchasing manager reports from Europe, the UK, and the U.S., will also be in focus. After a couple of quiet weeks, there is a growing chance of a surprise large move in the markets.