The FXStreet Insights Team is a group of journalists who share market observations and insights from various analysts. They emphasize that all content is for informational purposes only and includes a disclaimer about the risks involved. They recommend doing personal research before making any investment decisions.

The Current Gold Rally

Gold prices have jumped over USD 5,300 per ounce, with a new year-end target of USD 5,600 indicating strong momentum. This rally isn’t typical; it’s fueled by ongoing uncertainty that is now reflected in the price. Instead of viewing any price drops as a downturn, we should see them as opportunities to buy, given the solid demand for gold. The market’s fear gauge, the VIX, has been high this month, consistently above 25. This reflects geopolitical worries and unpredictable policies that push investors towards safer assets. In contrast, the VIX was much calmer in 2025, showing that the current situation is quite different. This high volatility makes options strategies essential for managing risk. In 2025, central banks continued reducing reliance on the dollar, with official purchases exceeding 1,100 tonnes for the second year in a row. This strong demand from major institutions creates a solid foundation for the market. That’s why the price has shown resilience, even when investors take profits.

Investment Strategies

After a significant 17% rally in January, pursuing spot prices with leveraged futures could be risky due to the chance of sudden price drops. A smarter strategy would be to use options to express optimism, such as buying call spreads to limit risk while aiming for more gains. Selling cash-secured puts at lower strike prices could also be a good way to earn high premiums from market volatility. Trust in the US dollar is crucial, particularly with the current administration’s policy aiming for a weaker currency to encourage exports. The Federal Reserve seems to be holding steady, with a divided board limiting chances of higher real yields that would typically challenge gold. This policy landscape supports a bullish outlook for gold and encourages a shift away from dollar-based assets. Create your live VT Markets account and start trading now.

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