Germany’s Consumer Price Index (CPI) for November showed an annual inflation rate of 2.3%, slightly below the expected 2.4%. This small difference didn’t cause much reaction in the market. In other news, the GBP/USD dropped to 1.3220 as market sentiment turned negative. The EUR/CAD also fell because Canada’s GDP surpassed expectations, while the Euro faced mixed data.

Gold Prices Surge

Gold prices neared $4,200 per troy ounce as expectations of a possible Fed rate cut grew. In the crypto market, Bitcoin, Ethereum, and XRP struggled to recover after a severe flash crash in October. Important U.S. data coming out next week could impact Fed expectations. We’re also looking forward to Eurozone CPI, Australian GDP, and Canadian employment figures. Ripple’s price has been stable, with its resistance and support levels holding firm. In the Forex market, there’s an interesting upcoming guide for brokers in 2025, focusing on aspects like low spreads and high leverage. A legal notice highlights the risks and uncertainties of market investments and clarifies that the information provided should not be considered trading advice. Germany’s inflation rate of 2.3% suggests a cooling trend across the Eurozone. Eurostat also reported that inflation in the Eurozone dropped to 2.5% in October. This latest figure will likely pressure the European Central Bank to consider a more cautious approach. We think that buying puts on the Euro or shorting EUR/USD futures could be a smart strategy as we head into the new year.

Federal Reserve Rate Expectations

The key story in the coming weeks is the rising expectation of a Federal Reserve rate cut in December. This marks a big change from earlier in 2024 when the Fed insisted on keeping rates up to control inflation. With recent U.S. GDP growth for Q3 2025 at only 0.8%, the market is now positioning for this shift, encouraging traders to invest in interest rate-sensitive assets. With the ECB likely taking a dovish stance and the Fed expected to lower rates, we foresee significant volatility in the EUR/USD currency pair. The CME FedWatch Tool currently indicates over a 75% chance of a 25-basis point cut in the next meeting. Derivative traders might want to consider buying straddles or strangles to take advantage of the anticipated price movements after next week’s U.S. jobs and inflation data is released. Gold’s rise towards $4,200 an ounce is directly related to the likelihood of lower U.S. interest rates, making gold—a non-yielding asset—more appealing. This upward trend began when gold broke the critical $3,000 mark earlier in 2025. We suggest using call options on gold futures (GC) to stay exposed to potential gains while managing risks. In the crypto market, we recommend exercising caution as sentiment remains negative following the flash crash on October 10. On-chain data reveals that trading volumes have dropped by almost 40% compared to the previous year, indicating a loss of retail interest. Buying protective puts on Bitcoin and Ethereum could be a wise strategy to guard against further declines. Create your live VT Markets account and start trading now.

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