France’s HCOB Manufacturing PMI for January registered a value of 51, surpassing the forecast of 50.3. This indicates growth in the manufacturing sector, as any PMI value over 50 signifies expansion. The Pound Sterling strengthened, trading above 1.3500, thanks to positive retail sales and PMI data from the UK. This kept the Pound resilient against other currencies, while the market turned its focus to upcoming US data.

Gold Price Movements

Gold prices fell back to above $4,900 after reaching a record high near $4,970. The recovery of the US Dollar, ahead of US PMI data, contributed to this decline, while geopolitical issues remained a concern. Bitcoin showed signs of slight recovery, while Ethereum and Ripple faced pressure as they tried to stabilize after a market sell-off. BTC continued to recover after finding support at a key level. The Bank of Japan kept interest rates at 0.75%, showing growing confidence in economic growth and achieving a 2% inflation target. The challenge lies in raising rates to support the Yen without slowing down growth. Tron (TRX) held gains above $0.30, buoyed by positive on-chain and derivatives data. Its retest of the bullish breakout earlier in the week reinforced the upward trend.

Economic Developments in 2026

Reflecting on last year, French manufacturing showed surprising strength, boosting confidence. However, in January 2026, the latest HCOB Manufacturing PMI for France dropped to 49.5, suggesting a slight contraction. This weaker outlook may lead traders to consider buying put options on the Euro Stoxx 50 index, anticipating downturns in European stocks. A year ago, the Pound Sterling surged on upbeat data, with GBP/USD rising above 1.3500. Today, the Pound struggles to hold the 1.2800 mark as the UK’s Q4 GDP growth for 2025 was only 0.1%, raising concerns about a prolonged economic slowdown. In this context, traders might explore options to profit from further weakness in the Pound, such as buying puts on GBP/USD futures. In early 2025, gold prices retraced from record highs as the US Dollar gained strength. Although gold has stabilized since, it remains elevated near $4,850, supported by persistently high inflation. The latest US CPI for December 2025 stood at 3.8%. Traders might consider collar strategies on gold futures to safeguard long positions while limiting potential gains, suitable for a market facing ongoing inflation risks. Last year’s crypto market showed signs of stabilizing after a sell-off. The approval of several spot Ethereum ETFs in Q3 2025 provided momentum, driving ETH well above its previous highs. With renewed institutional interest, traders should look for opportunities to buy call options on Ethereum, betting on continued momentum in the weeks ahead. The Bank of Japan faced challenges in balancing rate hikes and growth at this time last year, with rates at 0.75%. Despite raising rates twice to 1.25% since then, the Yen remains weak, with USD/JPY trading above 165. This suggests that the interest rate gap with the US remains a key factor, making long positions in USD/JPY attractive. Create your live VT Markets account and start trading now.

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