Spot Gold prices are under pressure following China’s choice to stop a VAT rebate on gold sales. This decision raises costs for consumers, impacting both investment and non-investment gold purchases from the Shanghai Gold Exchange. The EUR/USD pair is struggling, staying around 1.1500 after a recent drop as the US Dollar remains strong. All eyes are on upcoming US manufacturing data, which might affect future price movements.

The Pound Faces Challenges Against The Dollar

GBP/USD is feeling the strain, trading in the mid-1.3100s due to economic worries in the UK. The US Dollar’s strength, fueled by actions from the Federal Reserve, makes the Pound less appealing. Gold is currently priced around $4,000, despite recent drops. Expectations for gold’s recovery are limited by US Treasury bond yields and comments from the Federal Reserve, while traders await important US data. In cryptocurrency, meme coins like Dogecoin and Shiba Inu are trending downwards. Less activity from large wallet holders has increased supply pressure. Cardano (ADA) has dipped below $0.58, as its performance weakens. On-chain activity is declining, and trader sentiment is turning more bearish.

Gold Market Outlook and Derivative Strategies

As of November 3, 2025, the new Chinese tax policy on gold poses a significant challenge. This move effectively raises the price for the largest global consumer, which demanded over 1,000 tonnes in 2024 alone. With reduced demand coupled with a strong US dollar, a rise above $4,000 per ounce seems unlikely in the near future. Derivative traders might consider strategies that capitalize on gold’s downward pressure. Buying put options with strike prices below $4,000 or setting up bearish call spreads could be smart moves. The price trends seen in 2022 suggest that a hawkish Fed and a strong dollar create ongoing weakness for gold, a pattern that seems to be repeating. The strength of the US dollar is another key factor. With October 2025 inflation data showing a 3.1% annual rate, well above the Federal Reserve’s target, officials are unlikely to soften their stance. This helps maintain the dollar’s strength against currencies like the Euro and the Pound, especially since US Treasury yields remain high. For currency traders, this situation strengthens the case for shorting EUR/USD and GBP/USD futures or buying put options on these pairs. Increased implied volatility may be ahead of the upcoming US ISM Manufacturing PMI data release. A strong manufacturing report could solidify expectations for prolonged higher US rates, potentially pushing EUR/USD below the 1.1500 mark. There are also noticeable signs of a broader risk-off sentiment developing in the markets. The sharp declines in speculative assets like Dogecoin and Cardano aren’t just isolated events; on-chain data shows large investors have been pulling back for weeks. This risk aversion usually favors the US dollar and adds pressure to dollar-denominated assets, including gold. Create your live VT Markets account and start trading now.

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