SAMUEL LEACH'S WEEKLY MARKETS NEWSLETTER

From the Trading Desk of Samuel Leach

Founder & CEO, Samuel and Co Trading

Good morning/evening traders,

Another week, another opportunity to navigate the ever-evolving landscape of global markets. As I sit here at 6 AM Sunday, coffee in hand, scanning through overnight price action and preparing for what promises to be a pivotal week in the markets, I can't help but reflect on the fascinating dynamics currently at play across asset classes.

The markets never sleep, and neither do the opportunities they present. This week, we're seeing a confluence of factors that could set the tone for the remainder of July and potentially the entire third quarter. From elevated volatility readings to precious metals testing new highs, from energy markets finding their footing to currency pairs painting compelling technical pictures, there's no shortage of actionable intelligence for those willing to dig beneath the surface.

Let me walk you through what I'm seeing, what I'm watching, and most importantly, where I believe the smart money is positioning itself for the week ahead.

THE VOLATILITY STORY: VIX SIGNALS CAUTION

The CBOE Volatility Index closed Friday at 18.78, marking a small upside 6.72% spike that caught many traders off guard. This isn't just noise – it's the market's way of telling us that beneath the surface calm, there's genuine uncertainty brewing.

What strikes me most about this VIX reading is the context. We're sitting well above the 52-week low of 12.62 hit back in July 2024, but we're also a far cry from the panic levels of 43.73 we witnessed during the April 2025 volatility spike. This middle ground is actually the most dangerous territory for complacent traders.

Here's what the VIX is really telling us: institutional money is hedging. When I see a 6.72% daily spike in volatility, I know that somewhere, sophisticated players are buying protection. They're not panicking – they're preparing. The 42.58% year-over-year increase in the VIX tells a story of a market that's fundamentally more uncertain than it was twelve months ago.

From a trading perspective, this elevated volatility creates both opportunity and risk. Options premiums are rich, which benefits sellers but makes buying protection expensive. For our systematic strategies at Samuel and Co Trading, these conditions often present the best risk-adjusted opportunities, as our algorithms thrive in environments where price discovery is active and inefficiencies emerge.

The key levels I'm watching on the VIX are 17 on the downside – a break below would signal a return to complacency – and 22 on the upside, which would indicate we're moving into genuine fear territory. Currently, at 18.78, we're in that sweet spot where smart money makes its moves while retail investors remain largely unaware of the underlying tensions.

GOLD: THE ULTIMATE HEDGE IN UNCERTAIN TIMES

Gold continues to command respect, trading around $3,335 per ounce as of Friday's close. What's particularly compelling about gold's current position is not just the price level, but the underlying dynamics driving demand.

The 39.50% year-over-year gain in gold prices reflects a fundamental shift in how institutional investors view portfolio construction. When HSBC raises its 2025 average gold forecast to 3,215 and Goldman Sachs targets 3,215 per ounce and 3,700 by year-end, you know this isn't just speculative froth – it's a recognition of gold's role as the ultimate portfolio hedge.

What I find fascinating is gold's recent resilience despite a stronger dollar and elevated real yields. Traditionally, these conditions would be headwinds for precious metals, yet gold continues to find buyers at these elevated levels. This tells me that the demand drivers go beyond traditional monetary policy considerations.

Central bank buying remains robust, with emerging market central banks continuing to diversify away from dollar-heavy reserves. Geopolitical tensions, while not at crisis levels, continue to simmer beneath the surface, providing a constant bid for safe-haven assets. Perhaps most importantly, the growing recognition that traditional 60/40 portfolios may not provide adequate protection in an era of heightened volatility is driving institutional allocations to alternatives, such as gold.

From a technical perspective, gold is testing resistance around the 3,400 level, with strong support established at 3,300. A break above 3,400 could trigger momentum buying toward Goldman's 3,700 target, while a failure to hold above 3,300 might result in a retest of the 3,200 level.

For traders, gold's current setup offers compelling risk-reward dynamics. The monthly decline of 0.52% has created a more attractive entry point for those who missed the earlier rally, while the longer-term uptrend remains intact. I'm particularly interested in gold's performance relative to other safe-haven assets – if we see continued divergence between gold and traditional bonds, it could signal a fundamental shift in how markets price tail risk.

ENERGY MARKETS: FINDING EQUILIBRIUM

The energy complex presents one of the most interesting fundamental stories in markets today. With WTI crude at $66.50 and Brent at $68.28, we're seeing oil prices settle into a range that reflects both supply discipline and demand uncertainty.

The 4.50% monthly gain in Brent crude tells a story of markets regaining their footing after the volatility seen earlier in the year. What's particularly noteworthy is how oil has managed this recovery despite broader economic uncertainty and the ongoing transition toward renewable energy sources.

OPEC+ continues to demonstrate remarkable discipline in managing supply, while U.S. shale producers have shown restraint in ramping up production despite higher prices. This supply-side discipline is providing a floor for prices, even as demand growth remains somewhat muted due to economic uncertainties.

The EIA's forecast of Brent averaging $61 per barrel by year-end and $59 in 2026 suggests that current levels may be near the top of the range, but I'm not entirely convinced. These forecasts assume continued economic softening and increased supply, both of which could be challenged by geopolitical developments or unexpected demand strength.

From a trading perspective, the energy sector offers compelling opportunities for those willing to navigate the volatility. The key is understanding that oil prices are increasingly driven by geopolitical premiums and supply discipline rather than pure demand fundamentals. This creates opportunities for nimble traders who can capitalise on news-driven volatility while maintaining awareness of the longer-term structural trends.

I'm watching the 70 level on Brent as key resistance – a break above could trigger momentum buying toward 75, while support at $65 should provide a floor for any near-term weakness. The relationship between oil prices and broader market sentiment remains crucial, as energy often serves as a barometer for global economic health.

UK MARKETS: RESILIENCE IN THE FACE OF UNCERTAINTY

The FTSE 100's performance continues to impress, holding steady at 8,793.91 despite global headwinds. What strikes me most about the UK market's resilience is how it's managed to deliver a 7.54% year-over-year gain while navigating significant political and economic uncertainties.

The index's ability to maintain levels near its 52-week high of 8,908.82 demonstrates the underlying strength of UK corporate earnings and the attractiveness of UK equities from a valuation perspective. While the monthly decline of 0.17% might seem concerning on the surface, it's actually quite remarkable given the volatility we've seen in global markets.

What's driving this resilience? Several factors are at play. First, UK companies have demonstrated remarkable adaptability in navigating post-Brexit realities, with many finding new growth opportunities in emerging markets. Second, the relative weakness of sterling earlier in the year has boosted the competitiveness of UK exporters, supporting earnings growth. Third, the UK market's heavy weighting toward value sectors like financials and energy has provided defensive characteristics during periods of growth uncertainty.

The FTSE 250's more pronounced weakness, down 0.67% on Friday, tells a different story about domestic-focused companies versus international players. This divergence is worth monitoring, as it often provides early signals about the health of the UK domestic economy versus the performance of multinational corporations.

From a sector perspective, I'm particularly interested in the performance of UK financials, which have benefited from higher interest rates, and energy companies, which have provided natural hedges against inflation. The technology sector remains underrepresented in the FTSE 100 compared to other major indices, which could be either a vulnerability or an opportunity, depending on how the global tech narrative evolves.

Looking ahead, key catalysts for UK markets include upcoming inflation data, Bank of England policy decisions, and the ongoing evolution of the UK-EU trade relationship. The market's ability to maintain current levels despite these uncertainties suggests that investors are finding value in UK equities. Still, any significant deterioration in the fundamental backdrop could test this resilience.

STERLING'S STRENGTH: A CURRENCY FINDING ITS FOOTING

The pound's performance against the dollar remains one of the most compelling currency stories of 2025. At 1.3649, GBP/USD has delivered an impressive 9.07% gain year-to-date, demonstrating remarkable resilience in the face of global dollar strength.

What's particularly interesting about Sterling's performance is how it's managed to advance despite the UK's ongoing economic challenges. The 0.58% monthly gain reflects growing confidence in the UK's economic trajectory and the Bank of England's monetary policy framework. This isn't just about interest rate differentials – it's about market perception of the UK's long-term competitiveness and stability.

The technical picture for GBP/USD remains constructive, with the pair holding above key support levels and showing resilience during periods of broader dollar strength. The 30-day range of 1.3416 to 1.3747 has established clear parameters for near-term trading, with a break above 1.3750 potentially opening the door to a test of 1.4000.

From a fundamental perspective, sterling's strength reflects several positive developments. The UK economy has shown surprising resilience, with growth data consistently exceeding expectations. Inflation, while still elevated, has shown signs of moderating, giving the Bank of England more flexibility in its policy approach. Perhaps most importantly, the UK's current account deficit has improved significantly, reducing the country's reliance on foreign capital inflows.

For traders, GBP/USD offers compelling opportunities, particularly for those who understand the interplay between UK domestic factors and global risk sentiment. The pair tends to outperform during periods of high global risk appetite, while showing vulnerability during episodes of flight to quality. This makes it an excellent barometer for broader market sentiment while offering specific exposure to UK economic developments.

I'm watching the 1.3600 level as key support – a break below could signal a deeper correction toward 1.3400, while a move above 1.3750 could trigger momentum buying toward 1.4000. The relationship between sterling and UK gilt yields remains crucial, as any significant shift in interest rate expectations could drive meaningful currency moves.

THE WEEK AHEAD: KEY CATALYSTS AND OPPORTUNITIES

As we look toward the week of July 7-11, several key events could drive significant market movements and create trading opportunities for those positioned correctly.

Friday's U.S. jobs report stands out as the week's most significant catalyst. With the Federal Reserve's policy path increasingly dependent on labour market data, any significant deviation from expectations could trigger substantial moves across asset classes. A stronger-than-expected report could reignite concerns about persistent inflation and support dollar strength, while weakness could reinforce expectations for more accommodative policy.

UK Inflation Data expected mid-week will be crucial for Bank of England policy expectations and sterling performance. Given the recent strength in GBP/USD, the market may be vulnerable to disappointment if inflation proves stickier than expected. Conversely, signs of continued moderation could support further sterling gains and potentially drive UK gilt yields lower.

Corporate Earnings Season is beginning in earnest, with several major companies reporting results that could set the tone for sector performance. I'm particularly interested in how companies are managing margin pressures and what their guidance suggests about the economic outlook.

Geopolitical Developments continue to simmer beneath the surface, with ongoing tensions in various regions providing potential catalysts for safe-haven flows. While markets have largely shrugged off geopolitical risks in recent months, any escalation could quickly change sentiment and drive flows toward traditional safe havens like gold and government bonds.

Central Bank Communications from both sides of the Atlantic will be closely watched for any shifts in policy tone. With markets finely balanced between growth concerns and inflation fears, any change in central bank rhetoric could trigger significant repositioning.

TRADING STRATEGIES FOR THE WEEK

Based on current market conditions and upcoming catalysts, several trading themes stand out as particularly compelling for the week ahead.

Volatility Trading remains attractive given elevated VIX levels and upcoming event risk. For sophisticated traders, selling volatility in names with rich implied volatility while buying protection in areas where the market may be complacent could provide attractive risk-adjusted returns.

Currency Pairs offer compelling opportunities, particularly GBP/USD given its technical setup and fundamental backdrop. I'm also watching EUR/USD for any signs of European economic resilience and USD/JPY for potential intervention risks.

Precious Metals continue to offer portfolio diversification benefits, with gold's technical setup suggesting potential for further gains if we see any escalation in risk-off sentiment.

Energy Sector positioning could benefit from any supply disruptions or geopolitical developments, while also offering inflation hedging characteristics.

Interest Rate Sensitive Sectors in both the UK and US could see significant moves based on economic data releases and any shifts in central bank expectations.

The key to successful trading in this environment is maintaining flexibility while staying true to risk management principles. Markets are providing opportunities, but they're also punishing those who fail to respect the elevated uncertainty levels reflected in current volatility readings.

FINAL THOUGHTS: NAVIGATING UNCERTAINTY WITH DISCIPLINE

As I wrap up this week's analysis, I'm reminded of why I've always emphasised the importance of systematic, disciplined approaches to trading and investing. The current market environment perfectly illustrates why emotional decision-making and reactive trading strategies consistently underperform.

The elevated VIX, gold's continued strength, oil's range-bound behaviour, the FTSE's resilience, and sterling's surprising strength all tell parts of a larger story about markets searching for equilibrium in an uncertain world. For traders and investors who can accurately interpret these signals and position themselves accordingly, the opportunities are substantial.

At Samuel and Co Trading, our systematic approaches are explicitly designed for environments like this, where traditional correlations break down, where fundamental analysis must be combined with technical precision, and where risk management becomes the difference between success and failure.

The week ahead promises to be eventful, with multiple catalysts that could drive significant market movements. Whether you're trading short-term volatility, positioning for longer-term trends, or simply trying to preserve capital in uncertain times, the key is maintaining discipline, respecting risk, and staying true to your systematic approach.

Remember, markets reward patience and punish impatience. They reward preparation and punish complacency. Most importantly, they reward those who can maintain objectivity in the face of uncertainty, while others are driven by fear and greed.

Stay disciplined, stay focused, and as always, trade with conviction but never without caution.

Best regards,

Samuel Leach

Founder & CEO, Samuel and Co Trading

This newsletter is for informational purposes only and does not constitute investment advice. Past performance does not guarantee future results. All trading involves risk, and you should carefully consider your financial situation before making any investment decisions.

Contact Information:

Samuel and Co Trading

Email: [email protected]

Website: www.samuelandcotrading.com