The UK’s trade balance with non-EU countries went down to a deficit of £10.255 billion in October, worse than the previous £6.816 billion. The GBP/USD pair stayed below 1.3400 after mixed economic data from the UK. In October, the UK GDP fell by 0.1%, while growth was expected at 0.1%. On the other hand, manufacturing rose by 0.5% but fell short of the predicted 1% increase.

Gold Prices Soar

Gold prices kept climbing, exceeding $4,300, reaching the highest point since October 21. This rise happened alongside a weaker US Dollar, which struggled after the Federal Reserve hinted at a more cautious approach. Litecoin remained steady above $80 after pulling back from an $87 resistance level. Data indicated a positive outlook, even though there was a decline in LTC futures Open Interest. Meanwhile, the S&P 500 continued to grow as US 2-year yields stabilized around 3.50% after the Federal Reserve cut rates. Aave traded above $204 and got close to breaking out of its downward trend. The UK’s trade situation with non-EU countries has worsened sharply, raising concerns about the economy. We see this as a chance to think about put options on the Pound Sterling, which is likely to struggle due to these challenges. In the past, similar trade balance shocks in the early 2020s led to notable volatility in Sterling, which traders could take advantage of.

Federal Reserve’s Cautious Approach

With the Federal Reserve taking a more cautious approach, the US Dollar is likely to face pressure in the coming weeks. This environment is good for buying call options on key currency pairs against the dollar, such as EUR/USD, which remains steady near 1.1750. The recent CPI data showed core inflation easing to an annual rate of 2.7%, supporting the Fed’s recent rate cut and strengthening our view of a weaker dollar heading into early 2026. Gold’s surge beyond $4,300 is linked directly to the weak dollar and lowered interest rate expectations. We think this upward trend will continue, making it attractive to take long positions through gold futures or buy call options on gold ETFs. This rally is similar to the conditions during the 2020 bull run, where central bank actions and economic uncertainty drove precious metals to new heights. The stock market is responding positively to the Fed’s policies, with the S&P 500 moving higher. This suggests traders might benefit from using index futures for long positions or options to bet on further gains, especially in non-tech sectors. Historically, Fed easing cycles have often boosted equities for several months, a trend we expect to see again. Brent crude is testing a key support level around $60.10 per barrel. Traders should be ready for a significant move, as a sustained drop below this level could lead to a swift sell-off, making puts a smart strategy. Recent EIA data showed a surprising increase in US crude inventories for the third week in a row, adding to the downward pressure on prices. Create your live VT Markets account and start trading now.

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