The US oil rig count was reported by Baker Hughes at 417, surpassing expectations of 415. This number reflects the current state of the American oil exploration and extraction industry. The foreign exchange market saw some ups and downs. The EUR/USD pair is trying to stay around the 1.1600 mark as Federal Reserve interest rate expectations change. Meanwhile, the rebound of the US Dollar has impacted other currencies, including GBP/USD.

Gold and Cryptocurrency Market Trends

Gold prices dropped sharply to about $4,000 per troy ounce, driven by a stronger US Dollar and rising US Treasury yields. In the cryptocurrency world, Bitcoin remained above $97,000, even as a broader sell-off impacted major digital currencies like Ethereum and Ripple. US equity and bond markets showed weakness after the federal government shutdown ended. In blockchain news, VeChain has upgraded its mainnet consensus mechanism to support platform growth but is facing a potential 15% downside risk. We offer detailed guidance on selecting brokers for various trading needs in 2025. This includes advice on brokers with low spreads, high leverage, and those specialized for trading assets like the EUR/USD pair and gold. The guides also include regional broker recommendations. The slightly higher US oil rig count at 417 does not indicate a major increase in supply. This number suggests a tight market since it is still well below the 500 rigs that were active in late 2023. Given this restraint from producers, buying front-month WTI call options appears to be a sensible way to protect against potential price increases.

Federal Reserve Rate Expectations

The market has significantly reduced the chances of a December Fed rate cut, as hawkish comments take precedence. According to the CME FedWatch Tool, the probability of a cut has dropped to below 20%, a sharp change from a few weeks ago. This makes derivatives betting on higher short-term interest rates, like selling SOFR futures, a more attractive option. Gold’s drop below $4,100 is closely tied to the rising US Dollar and increased real yields. The US Dollar Index (DXY) is climbing to levels not seen consistently since the aggressive rate hikes of 2022. To take advantage of this situation, traders might consider buying puts on major gold ETFs or futures contracts. With the dollar’s strength, we favor bearish positions on other major currencies. Selling EUR/USD call spreads with a strike price above 1.1650 allows for profit if the pair remains weak. Also, ongoing fiscal concerns in the UK, where inflation is stubbornly above the Bank of England’s 2% target, make buying puts on GBP/USD an attractive strategy. With the recent conclusion of the US government shutdown, a wave of delayed economic data is expected, likely causing market fluctuations. The VIX is already elevated, sitting around 20, which reflects this market tension. We believe that buying straddles or strangles on major indices like the S&P 500 is smart to navigate the volatility, no matter which way the market moves. Create your live VT Markets account and start trading now.

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