**Gold Market Dynamics** The CFTC GBP net positions in the United Kingdom dropped to £0.6K from £29.2K. This change highlights shifts in the market that may impact the British Pound’s performance. The EUR/USD currency pair is trading above 1.1700 but is facing mild pressure due to US-China relations and domestic economic factors. The GBP/USD is nearing the 1.3400 support level, affected by a stronger US Dollar and weak retail sales in the UK. Gold prices have fallen to weekly lows of around $3,330 per troy ounce. This decrease is driven by a renewed interest in the US Dollar, fluctuating US Treasury yields, and trade developments. The cryptocurrency market is recovering after a sharp decline, with Bitcoin hitting a low of $114,723. Despite the ups and downs, Ethereum and XRP are holding their ground and maintaining key support levels. The Federal Reserve is under scrutiny for postponing interest rate cuts. While trade issues and a strong economy support this decision, there are worries about possible weaknesses in the labor market. **Traders’ GBP Strategies** With the sudden drop in positive sentiment for the British Pound, traders should consider bearish strategies. Recent data from the Commodity Futures Trading Commission shows net short positions on GBP futures growing to over 51,000 contracts in early June 2024—a significant shift. Given that retail sales fell by 2.3% in April, purchasing put options on GBP/USD could offer downside protection or speculative chances. The differences in policies between central banks are driving the strong dollar narrative, putting pressure on other major currencies. The European Central Bank reduced interest rates in June, while the Federal Reserve remains steady, giving the dollar a yield advantage. Selling out-of-the-money call options on EUR/USD could be a good strategy to earn income, betting that the pair won’t rise significantly. We advise caution with precious metals as long as the US Dollar remains strong. Gold has historically been negatively correlated with the Dollar Index (DXY), which is climbing above 105. Traders with long positions may want to use a collar strategy, which involves buying a protective put and selling a call option to finance it. The volatility in the cryptocurrency market offers unique chances for derivative traders. With Bitcoin stabilizing in the $65,000-$70,000 range and recent outflows from Bitcoin ETFs creating uncertainty, we believe employing straddles or strangles could be effective. These strategies allow profit from large price movements in either direction without needing to guess the direction. The Federal Reserve’s updated “dot plot” now indicates only one expected interest rate cut this year, down from three projected in March. This hawkish outlook supports the strong dollar and suggests continued weakness in assets priced against it. Until we observe clear signs of a softening labor market, we will focus on strategies that benefit from ongoing economic strength. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now