Australia’s CFTC AUD net positions fell from -51.2K to -59.6K. This change shows that the Australian Dollar’s value is dropping against major currencies. The United States’ Bureau of Economic Analysis will share the Personal Consumption Expenditures Price Index data for August soon. It’s predicted that the core index, which excludes food and energy, will rise by 0.2% from the previous month.

Gold Prices Rising

Gold prices are getting close to recent highs, nearly reaching $3,800 per troy ounce. This increase is due to a weak US dollar, lower yields, and possible rate cuts by the Federal Reserve. Investing in open markets comes with risks, including the chance of losing your entire investment and emotional stress. Investors hold full responsibility for any risks, losses, or expenses related to their investments. The views in this article do not represent FXStreet’s official stance or that of its advertisers. The author does not own any stocks mentioned and has no business ties with referenced companies. FXStreet and the author are not licensed investment advisors, and this article does not offer investment advice. Compensation for writing this article comes solely from FXStreet.

Market Dynamics and Strategy

Net short positions on the Australian dollar have deepened significantly, dropping from -51.2K to -59.6K. This increasing pessimism suggests traders expect the Aussie to weaken. This could be due to recent Australian inflation data for August 2025 showing a low rate of 3.1%, which may give the Reserve Bank of Australia reason to cut rates. Derivative traders might consider buying AUD/USD put options to prepare for further declines. This coming Friday, everyone will be watching the US Core PCE inflation report, with a mild 0.2% monthly increase expected. If the number comes in at or below this forecast, it would support the idea that the Federal Reserve is managing inflation, leading to more interest rate cuts and a weaker US dollar. A similar situation occurred in late 2023 when low inflation readings sparked positive market reactions. Gold’s rise toward $3,800 per ounce is driven by the expectation of Fed easing, which is lowering US Treasury yields and the dollar. This rally is part of a longer trend that started when gold broke the important $2,100 resistance level in early 2024. Traders who believe in this upward trend might use call options on gold ETFs to gain exposure while limiting risk. The key point is the contrast between a weak outlook for Australia and a strong case for precious metals, all centered around a potentially declining US dollar. One strategy could be to hold long positions in gold futures while shorting AUD/USD futures. However, all positions may face risks from the PCE data. An inflation reading higher than expected could challenge the current market view and quickly reverse these trades. Create your live VT Markets account and start trading now.

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