In December, US mortgage applications from MBA fell to -5%, down from -3.8%. This shift indicates a change in the mortgage application trend for the month. Gold prices retreated from their record highs, falling below $4,500 as investors took profits. The decline of the US Dollar, influenced by expectations of a dovish Federal Reserve, also affected gold prices.

Bitcoin Price Trends

Bitcoin prices have dipped below $87,000 due to increased ETF outflows and lower participation from large investors (whales). This marks four consecutive days of withdrawals from US-listed spot ETFs, totaling $188.64 million. Economic forecasts for 2026-2027 in developed countries look promising, supported by growth factors from 2025. Meanwhile, Avalanche is struggling near $12 after a nearly 2% drop and Grayscale has updated its ETF conversion filing with the US SEC. In brokerage news, the focus is on finding the best Forex and CFD brokers for 2025 across different regions. Keep in mind that market-related information carries risks, including significant investment losses. It’s essential to conduct thorough research before making financial decisions. As mortgage applications decline, we observe signs of an economy cooling under rising interest rates. The market now expects the Federal Reserve to reduce rates, with fed funds futures indicating a strong chance of at least two rate cuts by mid-2026. This supports the outlook for a weaker U.S. Dollar and lower bond yields in the coming months.

Holiday Market Movements

With thinner liquidity during the holiday season, markets might experience exaggerated movements on little news, so a cautious approach is wise. This quieter period can be a good time to sell options premium on stable currency pairs like GBP/USD, currently around 1.3500. Additionally, it may be smart to buy inexpensive protection, such as near-term VIX call options, in case low trading volumes cause sudden volatility spikes. Gold’s pullback from above $4,520 seems to be a consolidation phase before another rise, driven by expectations of Fed easing. This is similar to the trend seen in late 2023 when gold broke the old $2,100 resistance level following the Fed’s dovish pivot. Traders might find this dip a good entry point for call options on gold or silver ETFs in anticipation of the expected rate cuts. While the long-term outlook for equities in 2026 is positive, recent weak housing data could be a challenge in the short term. This may create pressure on financial and consumer-discretionary sectors at the start of the new year. A strategy to sell cash-secured puts on the S&P 500 at lower strike prices could help generate income or allow for purchasing the index at a better price during a potential downturn. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now