Gold has recently broken above its previous Asian high of $3508, reaching a new peak of $3512. This could signal a turning point, as gold has been hovering just below $3500 for several months. If it stays above this level, we may see a longer upward trend. The US dollar is in a shaky position because of changes at the Federal Reserve and new data from the Bureau of Labor Statistics. These factors add to market ups and downs. September is usually a weak month for gold, but we often see strength from November to February. There are possible risks, such as legal actions against tariffs and a lack of support from Congress, that may reduce market volatility this year. This could lead to worries about sovereign debt issues. While a pullback might happen, the following months often bring growth opportunities for gold. Gold is currently breaking through the important $3500 level, hitting a new high following months of steady trading. A breakout after such a long period often indicates the start of a stronger trend. The Cboe Gold Volatility Index (GVZ) has also surged over 15% this past week, showing that traders are factoring in larger price swings ahead. Several key factors support this optimistic view, especially moves aimed at weakening the US dollar. The Dollar Index (DXY) is trading around 95.20, and recent changes in the Federal Reserve have led the market to expect an 85% chance of a rate cut by the end of the year. Uncertainty about the reliability of economic data, especially after the new head of the Bureau of Labor Statistics was appointed, is also driving money towards the safety of gold. However, we should be cautious of seasonal challenges. Historically, September is the worst month for gold prices. Data from 2005 to 2024 shows that gold often loses value during this month, so a pullback wouldn’t be surprising. For derivative traders, this potential short-term dip could be a chance to get ready for the stronger season that usually runs from November to February. Buying longer-term call options, such as those for December 2025 or March 2026, during any price weakness could be a smart move. We are already noticing a significant rise in open interest for the December $3600 and $3700 call options. The biggest risk to this overall outlook comes from politics. If the courts or Congress manage to block the president’s proposed tariffs, the market uncertainty that has benefited gold this year could disappear. This would likely strengthen the dollar and decrease the demand for gold as a safe haven, potentially reversing recent gains.

here to set up a live account on VT Markets now