Gold prices have hit a new high, exceeding $3560 for the first time. This rise follows several months of stable prices, during which gold has held its value well.

Economic and Political Influences

Economic and political uncertainties are pushing prices higher. These situations often lead to more money circulating in the economy, similar to past events. Current forecasts suggest prices might reach $4000 soon. A key factor to consider is the ongoing debate about lifting tariffs from the previous US administration. The Supreme Court’s ruling on these tariffs could affect gold’s future. With gold surpassing $3560, we view this as a strong indicator that prices could move toward $4000. Political instability and a loss of trust in global institutions are increasing demand for safe havens like gold. For traders, this situation makes long-term call options on gold futures or ETFs like GLD an attractive choice to take advantage of potential price gains. The economic environment supports this outlook, as it seems likely to result in more money printing. The latest Consumer Price Index report from August 2025 shows inflation stubbornly high at 4.2%, which puts central banks in a tight spot. This strengthens our belief that gold is a necessary protection against the inevitable decline of fiat currencies.

Market and Strategy Considerations

Looking back, we noticed a similar trend after the pandemic response in 2020, when significant liquidity injections eventually boosted gold to new heights. The current four-month price stability has created a solid base for the next upswing. The market looks strong for a continued rally. Given the recent rise in prices, the cost of gold options has increased, making long call options pricier. We should think about using bull call spreads to lower our entry costs. This strategy can lead to good profits if gold moves toward our $4000 target while keeping risk at a manageable level. The main risk we are keeping an eye on is the upcoming Supreme Court decision regarding Trump-era tariffs, expected in the fourth quarter. An unexpected ruling that removes the tariffs could cause a sharp but likely temporary drop in gold prices. We can manage this risk by buying some cheaper out-of-the-money put options as a hedge for our portfolio. Create your live VT Markets account and start trading now.

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