Eurozone construction output fell by 1.1% in November, reversing a previous gain of 0.9%. This decline highlights the struggles in the construction sector during this period. In financial markets, gold prices surged above $4,700 due to geopolitical tensions and worries about trade wars. The pressure on the US Dollar also helped boost gold prices.

Bitcoin Price Drops

Bitcoin dropped below $91,000, influenced by rising geopolitical tensions over Greenland. Investors are shifting to safer assets, which is evident from the rising gold prices. President Trump has threatened to impose new tariffs on several European countries, including the UK, France, and Germany, starting February 1 at a rate of 10%. This news has unsettled the markets, raising concerns about new risks in Europe. Pi Network saw a slight increase of 1%, but selling pressure remains significant. Despite this small rebound, over 4 million PI tokens were recently withdrawn from exchanges. The drop in Eurozone construction output to -1.1% for November 2025 reflects ongoing weakness in the European economy. This slowdown, paired with rising geopolitical tensions, suggests a defensive approach is needed. We view this as an opportunity to consider short positions on European equity index futures.

Upcoming Tariffs in Focus

The focus in the coming weeks is the February 1st deadline for potential US tariffs on major European countries linked to the Greenland dispute. This is driving a risk-off sentiment, leading investors to seek quality assets. We recommend buying volatility through VSTOXX futures or call options on the index to prepare for increased market uncertainty. Gold’s rise above $4,700 is due to trade anxiety and a weakening US dollar. Open interest in gold futures has risen by over 15% in just a month, indicating strong confidence from institutional traders. We favor long positions through call options on gold to capture further gains while managing our risk. The decline of EUR/CHF towards four-week lows suggests a safe-haven flow into the Swiss franc. Similar trends were observed during the European sovereign debt crisis in 2011 when the franc significantly strengthened against the euro in times of regional stress. Therefore, we are using put options on EUR/CHF as protection against rising trade tensions in Europe. We’re also noting the general weakness of the US dollar, which has led EUR/USD to rise above 1.1700. This “Sell America” trend is driven by expectations that the Federal Reserve may need to cut rates more aggressively than the ECB. This sentiment is reflected in the widening negative spread between US and German 2-year bond yields, supporting our long positions in currency pairs like NZD/USD, which is approaching multi-month highs. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now