In September, China’s Producer Price Index (PPI) dropped by 2.3% compared to last year, aligning with expectations. This indicates a steady outlook for the country’s industrial costs. In currency trading, the EUR/USD pair rose above 1.1600 in response to potential interest rate cuts by the Federal Reserve. The GBP/USD pair also improved, reaching around 1.3350 due to speculation about future rate changes.

Gold and Cryptocurrency Market Trends

Gold prices remain strong, despite recent tensions between the US and China. Meanwhile, cryptocurrencies like Bitcoin, Ethereum, and Ripple are struggling at crucial technical levels, leaving investors uncertain. Silver has gained attention amid political and economic uncertainties, overshadowing gold’s exceptional rise. Traders are reconsidering their strategies, looking to take profits from gold while exploring investments in silver. For effective trading, selecting the right brokers is essential. There are guides available to help you find the best brokers for different strategies and conditions in 2025, providing valuable insights for navigating forex and CFD markets. With the Federal Reserve hinting at more rate cuts, the US Dollar is facing considerable pressure. The CME FedWatch Tool indicates an over 85% chance of another rate cut by the end of the year. This weakness could push the EUR/USD and GBP/USD pairs to their recent highs.

Strategies for Market Volatility

In this situation, we recommend long positions against the dollar. With market volatility decreasing, as shown by the VIX index falling below 15, traders will find option strategies more affordable. Consider using bull call spreads on the Euro or Pound Sterling to benefit from potential gains while managing risk. However, the ongoing deflation in China requires attention. The Producer Price Index has been declining for twelve straight months, a trend we haven’t witnessed since the industrial slowdown in 2015-2016. This indicates weak global demand, which could hinder commodity-linked currencies such as the Australian Dollar, even amid a weakening US Dollar. The precious metals market is benefiting directly from lower rate expectations and a softer dollar. Although gold is stabilizing after its record highs, buying on dips remains a solid strategy. Since gold is currently overbought, using options to buy calls can provide limited-risk participation. At this moment, silver stands out as a more attractive investment. The gold-to-silver ratio is high, hovering around 85, well above its historical average of about 65. This suggests that silver is undervalued compared to gold, and we may see a significant rebound in the coming weeks. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now