Gold prices have hit a new high, surpassing $4,200, as markets react to rising trade tensions between the US and China. The US Dollar has weakened after President Trump suggested possible trade terminations with China, affecting its strength. This week, the US Dollar has seen ups and downs, particularly dropping 0.50% against the Japanese Yen. Global policymakers are making speeches, with a close watch on insights from central banks for their economic effects.

Federal Reserve and Currency Movements

In recent news, Federal Reserve Chairman Powell pointed out possible risks to the job market and inflation during a speech at an economic forum. Meanwhile, France’s Prime Minister has postponed pension reforms, which has led to a slight rise in the EUR/USD currency pair. The Assistant Governor of the Reserve Bank of Australia reported better-than-expected data, boosting the AUD/USD rate. Additionally, GBP/USD has gained from the pressure on the US Dollar, while USD/JPY continues to fall. Gold remains a popular investment, acting as protection against currency loss and inflation. Central banks are significant gold buyers, increasing their reserves by 1,136 tonnes in 2022. In light of geopolitical uncertainties, fluctuations in gold prices reveal its safety as an asset.

Investment Strategies and Currency Trends

With Gold rising past $4,200, it’s wise to prepare for more upward movement due to US-China trade uncertainty. Consider buying call options on gold futures or related ETFs, aiming for targets around $4,250 or more. Recent data from the CME Group shows that open interest for December 2025 gold calls has jumped 20% this month, indicating strong bullish sentiment. The weakness of the US Dollar is a major trend, likely to continue amid ongoing geopolitical tensions and the Fed’s neutral stance. Buying put options on the Dollar Index (DXY) offers a direct way to take advantage, especially since it has dropped below the critical 100.00 level, a shift from the 103.00 range seen earlier this year. The CBOE Volatility Index (VIX) has also risen above 20, a level linked to ongoing dollar weakness. The Japanese Yen is acting as a main safe-haven, driving USD/JPY down toward 151.00. We see a chance to buy put options on this pair, as the movement to the Yen reflects historical trends during global stress events, like the market upheaval in 2023. Recent Commitment of Traders reports indicate a significant rise in net-long positions on the Yen, implying that institutional investors are betting on its strength. Currencies backed by hawkish central banks, like the Australian Dollar, are gaining support from a weak US Dollar. The RBA’s recent comments on rising inflation provide solid backing for a continued AUD/USD rebound. We could use call options on AUD/USD to capitalize on this trend, as Australia’s latest quarterly CPI of 3.8% leaves the RBA little reason to ease its position. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now