China’s trade balance for September stood at $90.45 billion, which was below the expected $98.96 billion. This shortfall indicates possible economic issues affecting China’s trade. The trade relationship between the US and China continues to impact global markets. The US Dollar Index has risen above 98.50, even amidst ongoing tensions. Recent statements from US President Donald Trump have helped stabilize traders in this complex geopolitical situation.

Gold Prices and Cryptocurrency Movements

Gold prices have risen, fueled by escalating trade tensions between the US and China, along with a weakening US Dollar. Meanwhile, Bitcoin saw a nearly 10% drop after President Trump announced increased tariffs on Chinese goods. PancakeSwap, Aster, and SPX6900 bounced back, each gaining over 20% after a major market decline. These developments show how geopolitical factors, particularly ongoing trade conflicts, contribute to market volatility. China’s smaller-than-expected trade surplus is an important indicator for upcoming weeks. This results from a consistent trend: China’s official manufacturing PMI has stayed below the 50-point expansion mark for three straight months. The market’s direction now hinges largely on the unpredictable nature of US tariff announcements.

Market Volatility and Trading Strategies

Due to the market’s strong reactions to news, we should brace for ongoing volatility. The VIX index, which measures expected market fluctuations, has consistently traded above 25, a significant rise from earlier in 2025. In this environment, buying options like straddles on major indices can be a smart strategy for profiting from large price shifts in either direction. Gold reaching new highs close to $3,950 indicates a shift toward safe assets. A similar, albeit less intense, drive for gold occurred during the 2018-2019 trade disputes. Opting for call options on gold futures or related ETFs allows us to capitalize on this upward trend while managing risk. We should consider bearish positions on currencies linked to Chinese growth, such as the Australian Dollar, using put options. At the same time, the US Dollar Index continues to rise above 98.50, marking the US as a relative safe haven despite current tensions. This dollar strength is likely supported by Federal Reserve interest rates, which remain more appealing than those in Europe or Japan. Crude oil is highly responsive to changes in trade rhetoric, recently rebounding to nearly $59.50 following more moderate comments. Short-term futures or options can be helpful for trading these price swings. Any renewed tariff threats would likely push prices down again as traders predict a slowdown in global demand. Create your live VT Markets account and start trading now.

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