Crude oil stocks in the United States rose by 3.524 million barrels, exceeding the forecast of 0.12 million for October 10. This increase indicates a larger supply than expected. Gold prices have hit a record high, nearing $4,300 per troy ounce. Strong demand for gold stems from concerns about the ongoing US government shutdown, US-China trade tensions, and possible rate cuts by the Federal Reserve.

Euro and US Dollar Movements

The EUR/USD has increased for three days, nearing the 1.1700 level. The US Dollar’s decline and risk-sensitive market trends support this rise. The GBP/USD pair has rebounded as well, with a recovery over two days of more than one percent, thanks to better-than-expected data from the UK. Ethereum saw a 3% drop, despite SharpLink’s $76.5 million direct offering. Data from Coinglass showed $160.4 million in futures liquidations in the past 24 hours, mainly due to $98 million in long liquidations. The S&P 500 faced an “inside day” after a sharp 2.7% drop caused by tariffs and a subsequent 1.3% recovery. This pattern suggests uncertainty in the market.

Cryptocurrency Market Trends

Solana aims for a price above $200 as the overall cryptocurrency market seeks recovery. This upward movement coincides with positive trends in Bitcoin and Ethereum, indicating improved market sentiment. Given the current market uncertainty, we see value in volatility rather than a clear direction in equities. The S&P 500’s “inside day” pattern illustrates extreme uncertainty, with the VIX trading above 25 for the past two weeks—levels not seen since the banking issues in 2023. Traders might consider strategies like straddles or strangles on major indices to benefit from significant price swings in either direction. The ongoing US government shutdown, now in its third week, is weakening the US Dollar. This is evident in the Dollar Index (DXY), which has fallen below the crucial 102.00 support level, affecting pairs like USD/JPY. This situation favors short-dollar positions against currencies from central banks less likely to lower rates, like the Euro, which is now close to the 1.1700 mark. Gold’s rise past $4,350 is a clear sign of a flight to safety, linked directly to the shutdown and expectations of Federal Reserve rate cuts. This surge is supported by a sharp drop in the 10-year Treasury yield, which has dipped below 3.8% for the first time this year. We anticipate ongoing demand for gold derivatives, with call options remaining appealing as a hedge against further economic or political instability. The unexpected rise in crude oil inventories suggests weakening demand amid fears of a global slowdown. This aligns with recent data showing a 5% drop in Chinese oil imports for September, which reinforces worries that the $1.2 trillion in global tariff costs are beginning to impact industrial activity. Selling crude oil futures or buying puts seems like a smart response to the mismatch between supply and demand. Uncertainty from the Federal Reserve adds another layer of complexity, as officials admit they don’t fully understand the tariffs’ impact on inflation. Nevertheless, Fed funds futures indicate a 75% chance of a rate cut by December, a significant rise from just 30% a month ago. This disconnect between market expectations and the Fed’s hesitance will likely cause further volatility in interest rate-sensitive assets. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now