European stock markets mostly finished the day higher. Spain’s Ibex closed at 15,395.11, close to its highest level since 2008. Italy’s FTSE MIB was the best performer, rising 1.14% to 43,053.71. Other European indices had mixed results. Germany’s DAX gained 50.71 points, reaching 23,748.87, while France’s CAC rose by 71.69 points to 7,896.94. In contrast, the UK’s FTSE 100 fell slightly, ending at 9,277.04, down 6.25 points.

Precious Metals Market

Gold prices hit a new high, increasing by $38 to $3,681.14. Silver also went up by $0.44, reaching $42.60, its highest since September 2011. Bitcoin saw a small decline of $552, settling at $114,770. Crude oil prices climbed by $0.45 to $63.14. In the U.S., interest rates dipped slightly by about 2 basis points. The yield on 2-year bonds fell to 3.538%, 5-year to 3.605%, 10-year to 4.037%, and 30-year to 4.653%. Given the strength in European stocks, there are opportunities in call options on the Italian FTSE MIB and Spanish Ibex 35 indices. The Ibex is showing strong momentum, nearing levels we haven’t seen since the 2008 financial crisis. Recent data, especially the surprising Eurozone PMI figures for August 2025, hints that the regional economy might be doing better than expected. This comes as the European Central Bank paused rate hikes last week.

Investment Strategies

Gold’s rally to a new record high above $3,680 signals a good time to hedge against uncertainty. The rise is backed by falling U.S. bond yields, which lower the cost of holding non-yield assets. We believe strong demand from central banks, highlighted in the World Gold Council’s report for Q2 2025, makes long positions in gold futures or related ETFs appealing. Falling U.S. Treasury yields suggest expectations of Federal Reserve rate cuts in the near future. This was reinforced by the recent U.S. jobs report for August 2025, which showed slow hiring and wage growth. Derivative traders might find opportunities in options on 10-year Treasury note futures. The mix of positive sentiment in European equities and cautious moves in gold and U.S. bonds creates a complex picture. This divergence can lead to more market volatility, so positions in VIX call options could be a valuable hedge for portfolios. Bitcoin’s slight drop indicates it’s not the top safe haven right now, with investments flowing into traditional assets like gold. While oil prices remain steady around $63 per barrel, this stability is notable given recent market movements. This level doesn’t suggest significant inflationary pressure from energy, especially since the recent U.S. CPI for August 2025 came in below expectations at 2.8%. For now, we consider oil less of a directional play and more of a neutral factor in the broader economic landscape. Create your live VT Markets account and start trading now.

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