Gold is on the rise, gaining $32 today and getting close to the $3500 mark. It’s just below the record high of $3500 set in April. After five months of steady movement in a wedge pattern, there’s a strong chance it could soon hit $4000. A recent US court ruling has eliminated tariffs from Trump’s time in office, which might be taken to the Supreme Court. If these tariffs are removed, the Federal Reserve could lower rates without being influenced by Trump’s board appointments. Retail investors are becoming more active as the US dollar weakens amidst political uncertainties. This creates a favorable environment for gold to rise above $3500. There’s also potential in mining stocks, especially with the GDXJ, a junior miner ETF, showing positive gains. The GDXJ can significantly benefit from rising gold prices, especially if current diesel prices stay low. These factors indicate that the market may continue to move profitably. Gold futures have surpassed $3,480 an ounce, placing us at a crucial point for the market. This five-day rally is testing the previous highs from April 2025, and we could see a quick breakout from this long period of consolidation. The Volatility Index (VIX) has risen above 20, suggesting that traders are bracing for major moves across the markets. The situation is changing as the potential removal of tariffs gives the Federal Reserve a chance to think about cutting interest rates. If they do so, it could speed up the recent drop in the US Dollar Index, which just fell below 98 for the first time this year. This would give a significant boost to dollar-denominated assets like gold. Big investors seem to be preparing for this shift. Last week, CFTC data showed a 15% increase in long positions by hedge funds. Retail interest is also on the rise, with the SPDR Gold Shares (GLD) ETF seeing over $2 billion in inflows during August 2025. This mix of institutional and retail buying is similar to the conditions that sparked the major gold rally in 2020. For derivative traders, this setup suggests considering long call options to take advantage of a rise beyond the $3,500 strike price. Buying October or November calls on gold futures or the GLD ETF is a defined-risk way to play a potential rise toward $4,000. With breakout possibilities, implied volatility is likely to increase, which would benefit those holding long options. A more leveraged opportunity exists through options on mining stocks, specifically the GDXJ junior miners ETF. Historically, these smaller miners outperform gold significantly during strong bull markets, and options on the ETF enhance this effect. With diesel prices down nearly 10% this quarter, miners’ margins are improving, providing a solid reason for these stocks to rise sharply if gold breaks out.

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