Gold has reached an all-time high of $4,766. This surge is driven by fears of a potential US-EU trade war and increasing geopolitical tensions. Additionally, rising global bond yields and weak US debt auctions have pushed prices up, with gold hitting a peak of $4,766 on Tuesday. Silver prices are on the rise too, now at $95.86 per troy ounce. Confidence in US assets is declining as high Treasury yields and the ‘Sell America’ trend affect markets. As yields climb, both the US Dollar and stocks are dropping.

Danish Pension Fund Exit

A Danish Pension Fund intends to exit its US Treasuries due to worries about President Trump’s policies. Trump has threatened tariffs on European countries unless an agreement regarding Greenland is reached. This could lead to €93 billion in tariffs from the EU. US Treasury yields are continuing to rise, with the 10-year note reaching 4.291%. The US Dollar Index is falling, and a weaker ADP Employment Change report does not lead traders to anticipate a Federal Reserve interest rate cut soon. Gold faces resistance at $4,800 and support at $4,700. Seen as a safe haven, gold tends to retain its value during uncertain times, with central banks being major buyers. Its price usually moves opposite to the US Dollar and riskier assets. With gold hitting record highs, we are witnessing a strong shift in options activity towards safe-haven assets. Traders might consider buying call options targeting the $4,800 mark. However, due to overbought signals on the Relative Strength Index, employing bull call spreads could be a smarter strategy. This approach allows traders to benefit from potential gains while managing costs and protecting against sudden drops.

Sell America Theme Intensifies

The “Sell America” theme is growing stronger, fueled by worries stemming from the shaky US Treasury auctions from 2025. To protect against a deeper downturn in US markets, buying put options on major indices like the S&P 500 is a direct response to this capital flight. Recent weakness in debt auctions suggests that foreign buyers are indeed pulling back. The current level of geopolitical tension, with direct threats of US-EU tariffs, is likely to lead to increased market volatility. We are turning our attention to derivatives linked to the VIX, as this market fear gauge is rising toward levels not seen since early 2025’s banking issues. For context, the VIX spiked above 80 during the 2020 market crash, indicating there’s still room for fear to expand. The significant drop in the US Dollar plays a crucial role in this trend, and we expect this weakness to continue in the coming weeks. Traders may want to use futures contracts to short the US Dollar Index (DXY) or buy options on currency-hedged ETFs. This trend is further supported by central banks, which have been steadily increasing gold reserves since 2022, including a record addition of 1,078 tonnes, a strategy that is now gaining momentum. Lastly, silver often behaves as a more volatile and aggressive play on gold’s movements. With silver surpassing $95, there is a strong demand for precious metals, and historical price ratios with gold suggest it has more potential for growth. Traders seeking leveraged exposure to this rush for safe havens are increasingly looking at silver futures and options. Create your live VT Markets account and start trading now.

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