China’s Gross Domestic Product (GDP) grew by 1.2% in the fourth quarter, surpassing the expected 1%. This growth shows that China’s economy is on a steady path. The EUR/USD currency pair is rising above 1.1600 as Europe responds to tariff threats from Trump. The Australian Dollar is also gaining, thanks to an increase in China’s industrial production, which is positively impacting Forex markets.

Gold Prices Rising

Gold prices are climbing in both India and Malaysia, signaling a positive trend for precious metals during uncertain geopolitical times. At the same time, the USD/CAD rate is falling near 1.3900, as the Canadian dollar strengthens due to higher oil prices. Bitcoin, Ethereum, and Ripple are seeing price corrections due to worries about a potential trade war between the EU and the US. On the other hand, Dash is on the rise, hitting an intraday high. Several Forex brokers are preparing to enhance their services for 2026, focusing on low spreads, high leverage, and the advantages of trading Gold in regions like MENA and Indonesia. These insights aim to help traders improve their strategies and outcomes. The strong Chinese GDP data, at 1.2%, indicates ongoing demand for Australian commodities. Throughout 2025, the Australian dollar closely followed signs of China’s economic recovery. In the coming weeks, buying call options on the Australian dollar could be wise, as over 30% of Australia’s exports went to China last year.

Geopolitical Tensions and Gold Prices

Geopolitical tensions involving the US and Greenland are causing a significant flight to safety, driving gold prices to a record $4,700. The gold rallies during the trade disputes of 2025 were similar to the spikes seen in 2018 and 2019. Purchasing gold futures or call spreads could be a smart strategy to protect against further escalation, even at these higher prices. The contrast between positive growth in Asia and rising trade war fears from the US creates a volatile environment. The CBOE Volatility Index (VIX) spiked by 15% in the last week of December 2025, suggesting more fluctuations across major indices. Long-dated call options on the VIX could serve as an effective hedge against this increasing uncertainty. The US dollar is weakening against European currencies, not only due to tariff threats but also because of perceived political pressure on the Federal Reserve. Similar dollar weakness was seen in late 2025 when questions about the Fed’s independence arose. With Eurozone inflation consistently above the 2% target last year, call options on EUR/USD near the 1.1600 level seem appealing. Rising oil prices are boosting the Canadian dollar, pushing USD/CAD towards 1.3900. Given that geopolitical risks often support energy prices, this trend is expected to continue in the immediate future. We could consider selling put options on USD/CAD to benefit from further strength in the Canadian dollar, especially since oil exports make up nearly 20% of Canada’s total export value. Create your live VT Markets account and start trading now.

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