The US oil rig count has risen by 1, bringing the total to 414, up from last week’s 413, according to Baker Hughes. This small increase indicates a slight rise in drilling activity in the US and shows ongoing changes in the oil industry.

Currency and Commodities Update

The EUR/USD is under pressure as the US dollar strengthens, trading around 1.1730. At the same time, GBP/USD has dropped to daily lows near 1.3360, following disappointing UK economic data. Gold prices have decreased and are currently testing the $4,300 per troy ounce level. Despite previous highs, expectations of further rate cuts from the Federal Reserve have influenced gold’s price. Litecoin is holding steady above $80 after dropping from a high of $87. Data from derivatives suggest possible risks for continued upward movement.

Stock Market Movements

The S&P 500 rose despite changing US 2-year yield rates, as the recent Federal Reserve rate cut was viewed as cautious. Aave’s price remains above $204 as it approaches the top of its descending channel, hinting at a potential bullish breakout. These movements reflect the broader market dynamics, where investor behavior and economic indicators impact various asset classes. The rise in the US oil rig count to 414 indicates that production is not ramping up aggressively. This count is still well below the 502 rigs operating at the end of 2023, showing that producers are careful. We may want to consider selling out-of-the-money call spreads on WTI crude futures, as stable supply and signs of a slowing economy may limit large price increases soon. This week, the Federal Reserve’s rate cut has pushed the 2-year Treasury yield to about 3.50%, but the market is unsure about the future. Recent core CPI data from November showed inflation still high at 3.1%. With discussions about a new Fed chair in 2026, uncertainty remains. We see a chance to buy volatility through straddles or strangles on interest rate futures before the next jobs report. Equity indexes like the S&P 500 are pulling back slightly from all-time highs near 5,800, showing some fatigue after the rate cut news. The CBOE Volatility Index (VIX) has risen to 18, indicating increased demand for protection. It may be wise to buy protective puts on broad market ETFs or to collar long stock positions to guard against a potential year-end drop. With gold holding steady around $4,300 an ounce, it’s clear the market anticipates continued inflation and a weaker dollar policy from the Fed. However, silver’s recent sharp drop from its all-time high could mean the rally for precious metals is running out of steam. We suggest avoiding chasing gold at this level and considering put spreads on silver for a possible correction. Create your live VT Markets account and start trading now.

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