Gold has surged to $4,200, thanks to lower US Treasury yields and a weaker US Dollar. This increase comes after gold dropped to $3,886 in late October, following a near-record high of $4,400. Right now, gold prices have risen by nearly 2%. The US government might reopen after a 43-day shutdown, with the House voting around 7:00 PM ET. However, the release of the October inflation report and Nonfarm Payrolls could be postponed, according to the White House. **Factors Influencing Gold Prices** The US Dollar Index is currently at 99.49, up by 0.04%. As US Treasury yields decline, gold prices tend to rise; the 10-year note is now at 4.12%, down five basis points. Private companies have been laying off an average of 11,250 workers weekly until October 25, marking the highest job cuts in October in 20 years at 153,074. Market predictions show an 80% chance of a 25 basis-point rate cut in December, with money markets estimating a 63% probability. Gold could continue to rise if it closes above $4,200, but support is in place at $4,161 and $4,100. Gold is a safe investment during economic instability. Central banks, which are the largest holders of gold, buy it to strengthen reserves in uncertain times. In 2022, they acquired 1,136 tonnes, worth about $70 billion. Gold prices often rise when the US Dollar and Treasuries fall. Various factors, such as geopolitical events, recession fears, interest rates, and the strength of the Dollar, can impact gold prices. This report is authored by Christian Borjon Valencia, who began as a retail trader in 2010 and specializes in technical analysis. With gold climbing past $4,200, we should prepare for further gains in the coming weeks. The key reasons are decreasing U.S. Treasury yields, currently 4.12% for the 10-year note, and a weak labor market which supports the case for a Federal Reserve rate cut. This environment suggests that buying call options is a straightforward strategy. The chance of a Fed rate cut in December is now 63%, an important sign for a non-yielding asset like gold. This expectation is driven by reports of increased job cuts; the Challenger report for October shows the highest job cuts for that month in 20 years. Since the government shutdown may delay the official October inflation and payroll data, these secondary labor reports hold more significance. **Potential Investment Strategies** This disappointing employment data follows an early Q3 2025 GDP estimate of just 0.8% annualized growth before the shutdown, raising recession concerns. Additionally, market strength is supported by ongoing demand from central banks. Preliminary data shows that net purchases in Q3 2025 stayed close to the record levels seen in 2022 and 2023. These elements provide a strong basis for rising gold prices. For a direct bullish strategy, consider buying call options on gold futures or ETFs expiring in January or February 2026. Target strike prices of $4,250 and $4,300, as these align with the next technical milestones. This plan allows us to take advantage of upward momentum while controlling our maximum risk to the premium paid. Due to uncertainty around the government reopening vote, we can expect increased volatility. For those anticipating a significant price movement but unsure of the direction, a long straddle—buying both a call and a put option at the same strike price and expiration date—could be effective. This strategy would benefit from a large price swing in either direction after the vote. As we set our positions, we should consider key technical levels for managing risk. The area around $4,100 and the 20-day moving average near $4,080 are crucial support levels. We can use these points to set strikes for protective put options, hedging any long positions against sudden reversals. Create your live VT Markets account and start trading now.

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