**Gold as a Store of Value** Gold is a reliable store of value and a safe haven during times of inflation and currency decline. In 2022, central banks from countries like China, India, and Turkey added a record 1,136 tonnes to their gold reserves. Gold prices usually move in the opposite direction of the US Dollar and Treasury yields. When the Dollar weakens, gold prices tend to rise; when the Dollar is strong, gold prices often stay lower. Factors like geopolitical tensions and fears of a recession also make gold more attractive. Because gold does not earn interest, its price tends to go up when interest rates are low, while higher rates generally decrease its value. Gold’s price is closely tied to movements in the US Dollar since it is priced in dollars (XAU/USD). A weaker Dollar usually boosts gold’s attractiveness. **Bullish Market Sentiment** Gold’s strong position above the $4,000 mark suggests this is a solid support level for the next few weeks. The inability of sellers to bring the price down indicates that buyers remain optimistic. Traders in derivatives can see this period of stability as a good opportunity to aim for the previous high of $4,060. This upward trend is backed by new economic data. Last week’s Non-Farm Payrolls report showed that job growth slowed to only 95,000. This raises expectations that the Federal Reserve might lower interest rates before the year ends. Such weak labor figures typically benefit non-yielding assets like gold. The U.S. Dollar Index has dropped to a three-month low of 101.50, which directly supports gold prices. Geopolitical issues are also boosting demand for gold as a safe haven. Ongoing financial uncertainty in France, due to its recent sovereign debt downgrade, and the Bank of Japan’s challenges with stabilizing the yen are leading global reserve managers to invest in gold. This institutional interest creates a steady demand in the market. Reflecting on the past, central bank purchases throughout 2024 helped lay the groundwork for the current rally when gold prices hovered around $2,800. Recent data from the World Gold Council shows that central banks bought over 220 tonnes of gold in the third quarter of 2025. This consistent buying indicates that major players see long-term value at these high prices. Given this context, using options to create bullish positions makes sense. Buying call spreads can minimize initial costs while setting sights on the $4,100 resistance level. Alternatively, selling out-of-the-money put options with strike prices below the key support level of $3,940 can help collect premiums while betting on the continuation of the current uptrend. Create your live VT Markets account and start trading now.

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