Sign Up Log in

    Gold prices rise above US$3650 as lower interest rates and political uncertainty boost demand

    by VT Markets
    /
    Sep 9, 2025
    Gold prices have hit an all-time high, surpassing US$3650. This rise is due to factors like potential lower rates from the Federal Reserve and ongoing political instability. Increased demand for gold also contributes to the climbing prices. Together, these factors are pushing gold prices upward.

    Volatility in the Options Market

    Gold’s surge past $3650 has led to a significant rise in implied volatility in the options market. The Cboe Gold Volatility Index (GVZ) is now above 20. This level hasn’t been consistently seen since early 2023’s market turmoil. While this makes buying options more costly, it also indicates expectations of large price changes either way. The Federal Reserve’s more lenient stance is driving this trend, especially after August 2025’s inflation data showed a lower-than-expected rate of 2.8%. Futures markets now predict almost certain rate cuts before the year’s end. For traders, any unexpected hawkish comments from the Fed could lead to a quick sell-off, while dovish remarks might boost the rally. We are also witnessing strong institutional demand that supports this trend. Recent data shows that central banks aggressively bought gold in 2023 and 2024, adding a net 400 tonnes to their reserves in the first half of 2025. This ongoing buying creates a strong market demand, making short positions very risky.

    Historical Context and Trading Strategies

    Considering the rapid increase from under $2500 in 2024, it’s important to reflect on history. We recall the sharp decline after the peak in 2011, reminding us that swift rises can face profit-taking corrections. Traders should think about strategies like bull call spreads, which limit potential profit but lower the initial cost of options in this volatile environment. Create your live VT Markets account and start trading now.

    here to set up a live account on VT Markets now

    In This Article

    see more

    Back To Top
    server
    Click Click Click Click Click
    Follow us on

    Hello there 👋

    How can I help you?

    Chat with our team instantly

    Live Chat

    Start a live conversation through...

    • Telegram
      hold On hold
    • Coming Soon...

    Hello there 👋

    How can I help you?

    telegram

    Scan the QR code with your smartphone to start a chat with us, or click here.

    Don’t have the Telegram App or Desktop installed? Use Web Telegram instead.

    QR code