In December, the United States Consumer Price Index (CPI) increased by 0.3% compared to the previous month, aligning with predictions. This increase helped support the US Dollar and affected global currency markets. Gold prices surged to new highs, exceeding $4,630 per troy ounce. This rise occurred even as the US Dollar strengthened and US Treasury yields went up following the CPI data release.

XRP Remains Steady Despite Market Changes

Ripple’s XRP has stabilized above $2.00, facing challenges in other financial sectors. Spot Exchange Traded Funds for XRP have drawn in $1.23 billion, showing consistent interest from investors. Privacy coins are outperforming the larger cryptocurrency market, with expectations of a 290% increase by 2025. Regulatory support is driving demand, as seen with the growing user base of Tornado Cash. The Federal Reserve is under scrutiny, receiving subpoenas from the Department of Justice. This is part of ongoing investigations into actions taken by the Trump administration regarding the central bank. December’s inflation report confirmed a 0.3% increase, which does not change the short-term outlook. This places the annual inflation rate for 2025 at 3.8%, still well above the Federal Reserve’s target, pressuring policymakers. As a result, futures markets now indicate less than a 40% chance of an interest rate cut before June, a notable drop from last month’s expectations.

Consistent Inflation and Political Pressures

The consistent inflation data coincides with the Department of Justice’s subpoenas to the Federal Reserve, leading to significant conflicts. This political pressure complicates future interest rate decisions, as the market must balance economic data with potential political influences. It introduces uncertainty that traditional economic models can’t predict. Gold’s leap to a record high above $4,630 per ounce is especially significant for traders right now. This rise is occurring even with a strong US Dollar, indicating that investors are purchasing gold as a safeguard against institutional risks, not only inflation. With the CBOE Volatility Index (VIX) climbing over 20, we believe options betting on higher gold prices or increased volatility are becoming more appealing. In currency markets, pairs like EUR/USD and GBP/USD are in narrow trading ranges. The dollar is seeing slight support from the inflation data, but political news is keeping any major movements at bay. This suggests that traders might employ options strategies to navigate the consolidation or position for volatility when a clear direction emerges. In the realm of digital assets, a distinct divide is forming, providing opportunities. While XRP has remained stagnant, privacy coins have excelled, with expectations of a nearly 290% increase by 2025, fueled by fears linked to regulatory actions like the GENIUS Act. This signals a rising demand for on-chain anonymity, a trend that derivatives traders can tap into through specific crypto products. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now