The United States saw an increase in API weekly crude oil stocks, which reached 2.4 million barrels on December 19. This is a change from a prior decrease of 9.3 million barrels. This rise in crude stock levels aligns with movements in other markets and commodities. The EUR/JPY currency pair fell to around 183.60 due to threats of intervention from Japan. Meanwhile, the US Dollar Index dropped to its lowest level since October, sitting at about 97.80, as speculation grows about potential rate cuts by the Federal Reserve. In contrast, the Australian dollar strengthened on hopes of a rate hike from the Reserve Bank of Australia.

Gold And Cryptocurrency Movements

Gold’s price keeps climbing, reaching near $4,500. This rise is fueled by safe-haven buying amidst geopolitical tensions and speculation about the Federal Reserve’s future actions. However, several altcoins, like Midnight, Pump.fun, and Bittensor, have faced losses as the cryptocurrency market sees increased selling pressure as the holidays approach. Looking ahead, the market is focused on key economic discussions that could influence trends through 2026. In the cryptocurrency world, Dogecoin has been losing value, reflecting a general cautious sentiment towards digital assets. The unexpected increase of 2.4 million barrels in US crude oil inventories marks a significant turnaround from the sharp decline seen last week. This rise suggests that demand may be weakening as we approach the new year, which could lead to lower prices. Derivative traders might consider purchasing put options on WTI futures for delivery in January or February 2026. At the same time, the US Dollar Index has also fallen, now at its lowest level since October 2025, around 97.80. This decline comes amid growing expectations of Federal Reserve rate cuts, with the CME FedWatch Tool indicating over a 70% chance of a rate cut by March 2026. This situation continues to favor call options on major currencies against the dollar, such as the Euro and Australian Dollar.

Market Divergence And Trading Strategies

There is a noticeable divergence where the weak dollar is not supporting crude oil prices due to key inventory signals. Generally, a weak dollar is good for commodities, but the size of the inventory increase points to demand concerns dominating the oil market. This makes short selling oil a more straightforward strategy than trading in currency markets. Gold is thriving thanks to the weak dollar and safe-haven demand, maintaining its rally near $4,500. Geopolitical tensions, like those seen in early 2024 that drove gold to new highs, are supporting its prices. We recommend considering bull call spreads on gold futures to gain further upside while managing risk in the current high market. Since today is December 24, we should recognize that market liquidity will be low in the coming week. This can lead to larger price fluctuations when trading volume is low, adding risk to new positions. It may be wise to trade with smaller amounts or wait until the first full week of January 2026 when liquidity should return to normal levels. Create your live VT Markets account and start trading now.

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