Gold has reached record highs, staying above $3,500 as pressure in the bond market increases. After a brief drop to $3,470, gold bounced back during US trading, regaining its peak. This comes as the US yield curve steepens, especially after the Jackson Hole event, with 30-year Treasury yields approaching 5%. The upcoming non-farm payroll data might further impact gold prices. Rising long-term yields are shaking up global markets. They first led to a rush towards the dollar and many sell-offs. There are questions about whether this is the correct strategy unless there’s a significant correction in stocks. As US yields rise, the market is looking for clearer signs, needing consistent US policy changes or indications of economic easing to prompt the Federal Reserve to cut rates faster. Silver is also doing well, now priced at $40.75—its highest since 2011. With no major resistance, silver might aim for previous highs of $49.81 from 2011 and $48.00 from the 1979/80 surge. This silver momentum reflects the positive trend we see in gold. With gold staying above $3,500, the best way to trade it may be through options to manage risk. The rise in long-term bond yields is causing market stress, which is ironically pushing investors into precious metals. Using call options or bull call spreads on gold ETFs can help capture further gains while keeping risks defined before Friday’s important jobs data. The number everyone’s watching is the 30-year Treasury yield, currently at 4.95%. Economists expect August’s non-farm payrolls, coming this Friday, to show an increase of just 150,000 jobs—a slowdown from July’s 185,000. If this number comes in weaker than expected, it could lower yields and push gold prices higher, increasing speculation on quicker Fed rate cuts. Silver presents a great opportunity as it trades near $40.75, the highest level since the European debt crisis in 2011. That 2011 surge was driven by concerns over government debt and monetary easing—conditions that feel familiar today. Traders might consider longer-dated call options to target a potential move back towards those old highs near $50. This situation is creating a clash in the broader market, so we should also think about volatility. The July CPI reading of 3.8% indicates inflation is still above the Fed’s target, reinforcing high yields and market uncertainty. If the 30-year yield exceeds 5%, we could see a sharp pullback, making options on the VIX an appealing hedge or a speculative play in the coming weeks.

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