The Bank of England kept interest rates steady at 4%. The Monetary Policy Committee voted 5-4 against reducing the rate by 0.25%. Those in favor of the reduction included Alan Taylor, Swathi Dhingra, and Dave Ramsden. The GBP/USD currency pair saw ups and downs, initially rising before falling back to around 1.3080. This was due to greater interest in the US Dollar. Even with earlier gains, gold prices dipped below $4,000 per troy ounce as the US Dollar weakened and US Treasury yields dropped.

Market Sentiment Overview

Market sentiment is cautious, even with a Federal Reserve rate cut, strong earnings, and trade deals. The strength of the US Dollar may weaken with upcoming US economic data and comments from Federal Reserve officials. Solana (SOL) stayed above $160, supported by a 4% rise the previous day. The cryptocurrency is thriving due to steady institutional demand and renewed interest from retail investors, indicating potential for further growth. The Bank of England’s narrow 5-4 vote to maintain rates suggests a rate cut may happen sooner than the market expected. UK inflation recently eased to 2.5% in October 2025, and Q3 GDP growth was nearly stagnant, increasing pressure to cut rates. We should consider buying GBP/USD puts, as it seems the pound will likely drop. Although Governor Bailey offers some support for the pound, the split vote is a more significant indicator. The current strength of the US Dollar appears fragile, with upcoming US data and comments from the Fed likely to impact it. This suggests that any strength in the GBP/USD pair is an opportunity to sell in the coming weeks.

Gold and Treasury Yields

Gold’s dip below $4,000 seems to be a temporary reaction to the dollar’s slight recovery. Overall, US Treasury yields have pulled back, with the 10-year note around 3.8%, providing strong support for gold. This pullback may be a good chance to buy call options, expecting a return to recent highs. A similar pattern emerged during the Fed’s 2019 easing cycle, where an initial pause was followed by a significant gold rally as the dollar weakened. The cautious risk appetite in the broader market, despite some positive news, also helps safe-haven assets like gold. If the Fed maintains its dovish stance, gold could quickly recover. Solana’s stability above $160 is a positive sign, especially with growing demand from retail and institutional investors. Recent data shows digital asset funds saw inflows of over $200 million last week, indicating larger players are building positions. We see this as a period of base-building, making the sale of out-of-the-money puts an appealing strategy to earn premium while waiting for the next upward move. Create your live VT Markets account and start trading now.

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