The Japan Corporate Service Price Index dropped slightly from 2.7% to 2.6% in December. This small change shows that prices for corporate services in Japan are relatively stable. Gold prices are close to record highs. The weak US Dollar and a preference for safe investments are driving interest in gold. The price is nearing $5,100, continuing a positive trend for the seventh day in a row.

Currency Market Overview

The EUR/USD rate is around 1.1870, showing losses even in a bullish market. In contrast, the GBP/USD pair is gaining momentum, reaching 1.3685, its highest level since September 2025, thanks to strong UK economic data. Hyperliquid’s decentralized exchange, HIP-3, reported that open interest rose to $790 million, a 200% increase in just one month. While this is impressive, it’s only part of Hyperliquid’s total open interest of $8 billion. Tether Gold dominates the tokenized gold market, holding 60% of the sector. Its value exceeded $2.2 billion in 2025 as interest in tokenized assets grew alongside rising gold prices.

Gold Market Dynamics

Gold prices have surged past $5,100 an ounce, primarily due to a weak US Dollar and a move to safer assets. This trend has been fueled by significant gold purchases by central banks, which accelerated in 2024 and continued into 2025. Last year, global gold reserves increased by over 800 tonnes. Traders may want to consider call options on gold miners or ETFs to benefit from this trend, but they should also be cautious due to potential volatility ahead of the Fed’s decisions. The weakness of the US Dollar remains crucial, as it struggles to recover from its lows in September 2025. Ongoing uncertainties in trade policy have led the Dollar Index (DXY) to drop below the important 95.00 support level, a stark contrast to the 104.00 range seen in much of 2024. This situation favors shorts on the dollar against currencies backed by stricter central banks. There’s a clear divergence in European currencies, creating opportunities in pairs like EUR/GBP. The British Pound is gaining strength above 1.3650 against the dollar, supported by strong domestic data that pushes back the timeline for Bank of England rate cuts. This reflects the ongoing battle with inflation from 2024. Meanwhile, the Euro seems capped under 1.1900, suggesting that traders might want to use options to bet on the Pound outperforming the Euro soon. In Japan, the small decrease in the Corporate Service Price Index to 2.6% will likely keep the Bank of Japan cautious. This continues the trend of yen weakness, which has been evident since their hesitant policy changes in 2024. Thus, using the yen as a funding currency for carry trades with higher-yielding currencies remains a good strategy. The impressive 200% rise in open interest on decentralized platforms shows a strong appetite for leveraged bets. Although the CBOE Volatility Index (VIX) has risen to about 22, it is still far from the panic levels seen in past crises, which encourages this speculative behavior. This suggests that implied volatility may be low for some niche assets, offering opportunities for those selling option premiums. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now