In October, the NAHB Housing Market Index in the United States rose to 37, surpassing forecasts of 33. The Dow Jones Industrial Average fell by 330 points as market sentiment shifted. Meanwhile, GBP/USD continued to recover due to a weaker US dollar and slight growth in the UK’s GDP.

Gold Prices and Trade War Concerns

At the same time, gold prices approached $4,300 because of trade war worries and anticipated Federal Reserve rate cuts, which boosted demand. The USD/JPY faced losses for the third day in a row, showing a decline in the US dollar’s value. The USD/CHF also fell as trade tensions escalated and predictions for Swiss economic growth dimmed. Currency markets were focused on the final inflation numbers from the Euro area. In key market updates, EUR/USD aimed for a move to 1.1700, while GBP/USD settled slightly above 1.3440. Solana sought to break above $200 as the cryptocurrency market tried to recover. Market data is informative but carries risks. It does not serve as a recommendation to buy or sell. Always do thorough research before making investment choices. We are witnessing classic signs of a flight to safety in the market. The Dow’s drop and gold’s rise toward $4,300 indicate that fear is setting in. This anxiety is fueled by renewed trade war worries and increasing certainty that the Federal Reserve may cut interest rates.

Housing Market and Interest Rates

Although the housing market index of 37 is better than expected, it doesn’t indicate strength. This number is still in contraction territory, similar to the challenging conditions seen in late 2023 when mortgage rates peaked. Right now, the housing market seems to be stabilizing at a low activity level. The surge in gold prices is currently the most crucial indicator for derivative traders. This increase stems from geopolitical uncertainties, with the VIX—a popular gauge of market fear—spiking over 20% in the past month to above 28. Historically, when the VIX stays above 25, it often leads to further declines in equity markets. The overall weakness of the US dollar is closely linked to expectations around Fed policy. The recent inflation report for September 2025 showed core PCE falling to a 2.1% annual rate. This has led the CME FedWatch tool to estimate an 85% chance of a rate cut by the end of the year. This environment provides a significant boost for dollar-priced assets like gold and foreign currencies. Given these circumstances, it may be wise to consider protection against further stock market declines. Buying put options on the S&P 500 (SPY) or Nasdaq (QQQ) with expirations in the next 30 to 60 days is a direct way to benefit from rising volatility and potential downturns. Call options on the VIX could also do well if market anxiety continues. To capitalize on the dollar’s weakness and the strength of precious metals, long call options on gold futures or the GLD ETF appear attractive. Likewise, with EUR/USD targeting 1.1700, call options on the Euro can capture this upward trend. This strategy matches the clear movement of capital out of US assets and into safer investments and foreign currencies. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now