US ISM Manufacturing PMI was reported at 47.9 in December, falling short of the anticipated 48.3. This number also dropped from November’s 48.2, impacting both currency movements and gold prices. Gold is rising due to geopolitical uncertainties, particularly involving the U.S. and Venezuelan leadership. The softer U.S. data has also helped gold strengthen in the market.

Bitcoin And Cryptocurrency Performance

Bitcoin is staying above the 50-day EMA as demand from ETF inflows continues, even with ongoing geopolitical concerns. Ethereum is stable above $3,100, reflecting the overall stability of the crypto market. Ripple is on the rise, currently above $2.13, thanks to growing ETF interest and derivative demands. XRP has shown a five-day upward trend, indicating strong investor interest in the crypto market. EUR/USD has climbed back to around 1.1700 as the U.S. Dollar weakened after the disappointing PMI data. GBP/USD also increased to roughly 1.3530, influenced by the negative impact on the dollar following the PMI results. The December 2025 manufacturing data showed a contraction at 47.9, missing expectations and signaling a weaker U.S. economy. Historically, when this index remains below 48 for several months, it often signals a broader economic slowdown, leading the Federal Reserve to consider rate cuts. Thus, positioning for a weaker U.S. Dollar through currency futures options seems wise.

Geopolitical And Economic Implications

Geopolitical tensions, especially in Venezuela, are prompting a flight to safety that benefits gold. This situation is made even more favorable by the declining U.S. Dollar, as gold is dollar-denominated and tends to rise when the dollar falls. We saw a similar trend in early 2022 during the Ukraine conflict, where gold prices climbed over 10% in a few weeks, making long positions in gold futures or call options appealing. The weaker dollar is clearly shown in the rally of EUR/USD and GBP/USD, which are moving toward 1.1700 and 1.3530, respectively. We expect this trend to continue if upcoming inflation data from the Eurozone and the UK remains strong, suggesting their central banks will keep rates stable while the Fed shifts. Buying call options on the euro or pound against the dollar is a defined-risk way to capture this potential upside. The combination of a possible U.S. slowdown and new geopolitical issues indicates that market volatility may rise. The CBOE Volatility Index (VIX), also known as the market’s “fear gauge,” typically increases in such situations. For example, it more than doubled during the uncertainty in the first quarter of 2020. We believe buying VIX call options could effectively hedge against a broader market downturn. Cryptocurrencies are notably ignoring the market’s risk-off sentiment, driven instead by strong ETF inflows. In the last two years, over $50 billion has flowed into these products globally, creating a steady demand for the underlying assets. This suggests the current bullish trend has its own momentum, making call options on Bitcoin and Ethereum a way to engage in a market that is following its own story. Create your live VT Markets account and start trading now.

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