In November, personal income in the United States rose by 0.3%, which was below the expected 0.4%. This slow growth reflects broader economic trends influenced by geopolitical changes and domestic policies. Gold prices have recently jumped, reaching new highs over $4,900 due to shifts in global risk appetite. Easing trade tensions between the US and EU have resulted in a weaker US Dollar, positively affecting currency pairs like EUR/USD and GBP/USD.

Bitcoin and Ripple Update

Bitcoin saw a slight rise, trading just above $90,000, even with ongoing ETF selling pressure. Ripple (XRP) stayed strong, maintaining a support level above $1.90 despite market ups and downs and lower retail demand. Additionally, President Trump reversed proposed NATO tariffs, signaling a reduction in international trade tensions. This decision eased concerns in global markets that were anticipating potential economic disruptions from the tariffs. For traders and investors, it’s essential to understand these economic signs and market reactions. Doing thorough research can help navigate investment risks effectively. Current trends show the constantly changing landscape of global economic activities and investment prospects. With the US Dollar staying weak, it’s wise to consider preparing for further declines. The easing of US-EU trade tensions is a key factor, making positions in currencies like the Euro and Pound Sterling appealing. We can consider buying call options on EUR/USD and GBP/USD, aiming for movements toward 1.1800 and 1.3550 in the upcoming weeks.

Gold Rally and Market Volatility

However, the below-expected personal income data for November may indicate a potential weakness in US consumer strength. This situation reminds us of the slowdown in consumer spending seen in mid-2025, which briefly halted the equity rally before it recovered. Therefore, while we remain optimistic about risk assets, it might be wise to protect ourselves by purchasing put options on consumer discretionary ETFs. The rise in gold prices to nearly $4,900, despite a positive risk mood, largely relates to the weak dollar. This trend looks promising, especially as open interest in call options for February expiration at the $5,000 strike price has increased by over 30% in the last two weeks. Keeping long positions through gold futures or call options appears to be a solid strategy. Overall market sentiment supports a continued equity rally, but volatility is notably low, with the VIX around 14. This low level allows us to cheaply protect our portfolios. Buying out-of-the-money VIX call options for March could offer an affordable safeguard against any sudden market drops linked to weak US economic data. In the crypto market, caution is key despite minor price increases. Recent figures indicate that spot Bitcoin ETFs have seen net outflows for five straight trading days, totaling nearly $950 million. This institutional selling pressure suggests that we should be careful about pursuing the rally and may want to consider buying protective put options on crypto-related assets. Create your live VT Markets account and start trading now.

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