Gold prices have experienced fluctuations in early July 2025, influenced primarily by expectations surrounding Federal Reserve interest rate policies and broader economic factors. Initially, gold climbed for two consecutive days driven by optimism that the Federal Reserve would resume interest rate cuts later in the year. This positive sentiment was supported by a weaker U.S. dollar and ongoing investor attention to U.S. trade negotiations ahead of a July 9 tariff deadline. However, gold prices dropped nearly 1% following strong U.S. employment data, which diminished hopes for a July rate cut. Despite this pullback, gold remains up over 25% in 2025, buoyed by global geopolitical tensions. Additionally, concerns over the U.S. fiscal deficit, exacerbated by a recent tax-cut bill, have contributed to gold's resilience, keeping it on track for a weekly gain despite the recent decline.