Durable goods orders in the United States, excluding defense, dropped from 0.1% to -1.5% in October. This means fewer orders for long-lasting manufactured goods that are not related to the military. Silver prices have hit a new high, surpassing $71, due to increased demand for safe investments and expectations of easier monetary policy from the Federal Reserve. On the other hand, Bitcoin and other cryptocurrencies are facing difficulties, with Bitcoin trading above $87,000 amidst a general market decline.

US Q3 GDP Exceeds Expectations

The US GDP for the third quarter grew at an annualized rate of 4.3%, beating analysts’ expectations of 3.3%. This stronger growth has impacted currency markets, boosting demand for the US Dollar and affecting exchange rates such as EUR/USD and GBP/USD. Gold prices jumped to $4,497 early Monday, benefiting from a weak US Dollar. However, gains were limited by the positive GDP report. Meanwhile, the Dow Jones Industrial Average rose by 100 points due to ongoing positive market sentiment. In the cryptocurrency market, Dogecoin continued to decline due to a generally cautious attitude among investors. Low open interest and funding rates in its derivative market are also reducing buying activity. We are noticing clear signs of a slowing economy as we head into the new year. The significant drop in durable goods orders to -1.5% for October is a troubling signal for future business investment. This recent decline should be taken more seriously than the strong 4.3% GDP growth we observed in the third quarter.

Federal Reserve and Interest Rate Cuts

The market is already bracing for the Federal Reserve to cut interest rates. Recent data from November showed inflation cooling to an annual rate of 3.5%, which provides the central bank with more flexibility to act. As of this week, federal funds futures indicate an 85% chance of a rate cut at the January 2026 meeting. In this environment, traders should consider protecting against a market downturn. The mixed economic signals are likely to increase volatility, making options pricing appealing. Buying put options on major indices like the Dow Jones Industrial Average could serve as a valuable hedge if weakness continues. The anticipation of lower rates should further pressure the US Dollar. A weaker dollar makes precious metals more appealing, contributing to the record highs in gold and silver. We might consider call options on gold and silver ETFs to speculate on additional gains driven by this change in monetary policy. Lastly, the move towards safer assets is clear as speculative investments like Bitcoin retreat from their peaks. This cautious sentiment, along with record high prices for precious metals, shows that investors are becoming more defensive. This trend supports the idea of holding protective derivative positions through the holiday season and into early 2026. Create your live VT Markets account and start trading now.

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