Gold prices are also worth watching as the tariff deadline looms this week.
Gold is currently testing the lower bound of the recent uptrend after a pullback from the resistance at $3,430. A break lower could be significant, but a move above the highs would spark another leg of the rally.
The previous tariff meltdown in markets led to the next leg of upside in bullion from $3,000 onward.
The next move will depend on this week’s events with tariffs and any further issues in the Middle East.
Israel’s Prime Minister Benjamin Netanyahu is set to visit Washington on Monday after the recent ceasefire. Many see the trip as a victory lap after the strikes on Iran’s nuclear facilities last month.
Israel sent negotiators to Qatar on Sunday in an attempt to fix differences with Hamas. The United States has also been seeking to broker talks between Israel and Syria in order to restore some calm in the region. Without tariff threats and with a ceasefire extended, gold’s recent rally may be at risk.
Jim Reid, analyst at Deutsche Bank, said that Trump’s new spending bill “would have significant economic implications”.
Reid said: “Note that the $5tn ($3.7tn) debt ceiling increase included in the bill, probably takes that off the table for around 2.5 years given the current run rate of deficits”.
“Without the increase, we’d probably have run up against the existing debt ceiling around mid-August. So one less thing to worry about in the near term, even if the bigger picture on debt just got more worrying.”
