Currency Overview

Gold has reached an all-time high of $3,724.28, rising by 1.1% as the week starts. However, upcoming US economic reports may lead to a price correction, especially with the busy months of December and January approaching. In the cryptocurrency market, Bitcoin has dropped by 2.2% to $112,774, falling below its 100-day moving average. Ether also fell nearly 6% to $4,190, nearing mid-August lows around $4,062-66, with no obvious reasons for the decline. The Euro (EUR) is performing well among major currencies, while the Canadian Dollar (CAD) is lagging. Both EUR/USD and GBP/USD saw slight gains of 0.3% to 1.1777 and 0.2% to 1.3492, respectively. USD/JPY remains steady around 147.80-00 amid a negative market mood and slight cooling of US futures after record highs on Wall Street. European stocks are down, with S&P 500 futures declining 0.3% and US 10-year yields dropping by 1.4 basis points to 4.125%. WTI crude oil also fell by 0.5% to $62.37. Economic updates from the Fed and job growth struggles in the Euro Area due to aging populations could influence markets in the coming days. While gold sets new highs, it’s important to avoid rushing into long futures contracts right now. A smarter strategy might be to use bull call spreads, allowing you to bet on future gains while keeping costs and risks low. Gold has historically reacted strongly to inflation surprises, and the last CPI report in August 2025 showed a slightly high reading of 3.5%, indicating a strong underlying trend.

Investment Strategies

With potential pullbacks ahead of increased seasonal demand in December, it’s wise to consider downside protection. Buying out-of-the-money put options on gold futures for October could be an affordable way to hedge against profit-taking. This situation is reminiscent of the run-up in 2024 before a quick correction, especially considering this week features many Fed speakers who could impact market sentiment. Although stocks are slightly cooling, they remain near record highs, keeping volatility low. The VIX index is around 14, making VIX call options a cost-effective hedge against any hawkish surprises from the Fed later this week. A sudden rise in volatility could make these options very profitable, providing protection for your portfolio. The decline of Bitcoin below its 100-day moving average is an important technical indicator. This could signal increased selling pressure, suggesting that long put options on BTC futures might be a worthwhile strategy for the next few weeks. After falling from nearly $120,000 last week, momentum has clearly shifted negative following a two-month rally. Currency markets are quiet, with EUR/USD confined to a narrow range for weeks, making strategies like an iron condor appealing to profit from this lack of movement. However, the busy calendar of Fed discussions could disrupt this calm. A long strangle, which benefits from strong movements in either direction, may be a good way to prepare for potential volatility without predicting the direction. Create your live VT Markets account and start trading now.

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