Baker Hughes has reported a drop in the number of oil rigs in the US, going from 424 to 422. This change highlights shifts in the oil industry. The EUR/USD pair remained stable, reflecting broader economic factors, including talks within the Federal Reserve. Meanwhile, the Dow Jones Industrial Average rose by 250 points, fueled by hopes for interest rate cuts.

Gold and Bitcoin Market Updates

Gold prices rose to nearly $3,890 per troy ounce, amid fears of a possible US government shutdown. Bitcoin fell slightly to $120,000 but kept its ground after a recent peak. FXStreet has redesigned its platform to improve user experience and editorial approaches, enhancing support for traders. Pump.fun continues to thrive in the cryptocurrency market, trading above $0.0070. The token is showing strong signs, backed by favorable technical indicators. There’s growing uncertainty due to the US government shutdown, putting pressure on the Dollar. Traders should keep in mind that past shutdowns, like the 35-day one from 2018-2019, can cause extended volatility. It may be wise to consider currency derivatives that bet against the dollar, such as purchasing puts on the Invesco DB US Dollar Index Bullish Fund (UUP).

Fed Uncertainty and Interest Rates

The Federal Reserve shows a split opinion, with some officials calling for more rate cuts while others are concerned about ongoing inflation. This uncertainty about future interest rates is setting the stage for increased volatility, which often spikes during conflicted FOMC meetings. Traders might want to explore options strategies such as straddles or strangles on interest rate-sensitive investments, like Treasury bond ETFs (TLT), to benefit from significant movements in either direction. The continued decline in the US oil rig count, now at 422, suggests that future supply could tighten. Recent data from the Energy Information Administration also indicated a greater-than-expected drop in crude inventories, supporting a bullish outlook. Consider looking into buying call options on WTI crude futures or energy sector ETFs like XLE in the coming months. As the shutdown drives investors to safer assets, gold is becoming a classic refuge, reaching nearly $3,890 per ounce. We observed a similar rise when gold hit record levels in 2024 amid geopolitical tensions and uncertainty about interest rates. Traders might consider long positions through gold futures (GC) or call options on gold ETFs (GLD) to take advantage of this trend. The stock market seems to overlook shutdown risks, with the Dow rising due to optimism about potential Fed rate cuts. Historically, market performance during shutdowns varies; the S&P 500 even gained during the long shutdown from 2018-2019, suggesting that this optimism has some precedent. However, it’s prudent to hedge long equity positions by buying put options on major indices like the SPX for protection against sudden downturns. Create your live VT Markets account and start trading now.

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