The RealClearMarkets/TIPP Economic Optimism index in the United States registered at 48.3 in October, falling short of the expected 49.3. This figure indicates a decline in economic optimism. Gold prices are nearing the $4,000 level as concerns over a possible US government shutdown and interest rate cuts continue. Political instability in France and Japan’s potential support for stimulus measures are also helping to boost gold prices.

Cryptocurrency Developments

Bitcoin is holding steady around $124,000, which is below its recent peak of $126,199. Ethereum is showing signs of a possible rally due to growing interest from institutional investors, while Ripple’s XRP is targeting $3.40 for future growth. The leadership of Sanae Takaichi in Japan is expected to keep the country’s fiscal and monetary policies unchanged. This change in leadership presents both opportunities and risks in the market. The Dow Jones has dropped, driven by fears of a government shutdown. Meanwhile, the Reserve Bank of New Zealand plans to cut interest rates by 25 basis points in October. FXStreet urges caution when using market information and warns about the risks of investing in the market. It emphasizes the importance of thorough research, as it does not endorse specific stocks.

Market Volatility Observations

With US economic optimism at 48.3, below the neutral mark of 50, there are clear signs of increasing fear in the market. The CBOE Volatility Index (VIX) has risen over 35% in the last two weeks, reaching a high of 28.5—levels not observed since the second quarter of 2025. Traders may want to consider buying call options on the VIX or related volatility ETFs to hedge against or profit from potential market instability. The looming risk of a US government shutdown is weighing on stock prices, causing the Dow Jones to decline. A similar scenario occurred during the prolonged shutdown at the end of 2018 and beginning of 2019, which led to a significant market drop before recovery. Purchasing put options on major indices like the SPDR S&P 500 ETF (SPY) can offer protection for portfolios against a repeat of this downturn. Gold’s surge toward $4,000 per ounce reflects a strong movement toward safety, a trend unlikely to change soon. In September 2025, there was a net inflow of over $12 billion into gold-backed ETFs, indicating robust demand from institutions. We suggest using call options on gold futures (GC) to maintain exposure to this upward momentum. With the release of FOMC minutes approaching, all eyes are on the Federal Reserve’s next steps. The CME FedWatch Tool estimates an 85% chance of a 25-basis-point rate cut at the November 2025 meeting, up from 50% a month ago. Traders can consider going long on 2-Year Treasury Note futures (ZT), which react strongly to changes in near-term interest rate policies. Despite local challenges, the US dollar is gaining strength as global investors seek safety, impacting risk-sensitive currencies. For example, the Australian Dollar is just above key support levels, but speculative short positions against it are at a six-month high. This environment supports the use of derivatives to short pairs like the AUD/USD, expecting a drop if risk aversion grows. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now