Japan’s Tertiary Industry Index fell by 0.4% in August, which is worse than the expected drop of 0.2%. This indicates a slowdown in Japan’s service sector. In the UK, the GDP grew by 0.1% in August, just as forecasted. This helped the Pound Sterling stay stable even though the US Dollar was fluctuating.

Gold Prices And Geopolitical Risks

Gold prices increased due to new US-China trade tensions and geopolitical issues. The rise in gold was also supported by expectations of Federal Reserve rate cuts and potential US government shutdowns, which put pressure on the USD. Dogecoin stabilized at around $0.19 on Thursday after correcting nearly 5% over the past week. Whale accumulation in the market may indicate a future price rebound for this cryptocurrency. Market speculation identifies gold as a stable asset amid ongoing economic uncertainties. Its attractiveness stems from its strength in tough financial conditions. It’s important for readers to do thorough research before making any financial choices. The information provided is for general purposes and is not investment advice.

Japanese Economy And Currency Implications

The disappointing August data on Japan’s Tertiary Industry Index, showing a 0.4% contraction, points to a further slowdown in the service sector. This follows a revised Q2 GDP growth of only 0.2%, indicating a clear loss of momentum in the economy. With the Bank of Japan unlikely to tighten policy now, we should look for options that benefit from a weaker yen, especially against stronger currencies like the British Pound. A clear trend against the US dollar is emerging, fueled by expectations of Federal Reserve rate cuts and new trade tensions with China. The latest US CPI data for September 2025 showed a rate of 2.8%, increasing speculation that the Fed will take action to support the economy. Derivative traders might consider selling futures on the US Dollar Index (DXY), which is struggling to stay above the key 100 level, or buying call options on pairs like EUR/USD. Gold’s move towards all-time highs is a direct result of this environment, acting as a hedge against geopolitical risks and potential currency devaluation. This rally is backed by significant central bank purchases, according to the World Gold Council’s Q3 2025 report, which have been at a record pace in recent years. Using futures or call spreads to maintain long positions in Gold and Silver seems wise, as downside risk appears limited. Caution is advised due to ongoing US-China trade tensions, which escalated after the US announced new tariffs on Chinese EVs over the summer of 2025. This uncertainty is keeping a lid on overall risk appetite and boosting demand for safe havens. Traders might consider buying protections like put options on equity indices or call options on the VIX to safeguard against sudden market changes in the weeks ahead. Create your live VT Markets account and start trading now.

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