The American Petroleum Institute (API) reported that US crude oil stock levels reached 3.524 million barrels for the week ending October 10. This is significantly higher than the anticipated 0.12 million barrels. Gold prices have soared past $4,350, hitting around $4,365 during Asian trading. This rise is linked to worries about a potential US government shutdown and ongoing US-China trade tensions.

Solana Market Activity

Solana’s market fell despite the DeFi Development Corporation buying over 86,000 SOL. However, the cryptocurrency market shows signs of recovery, with Solana aiming for a price above $200. In the stock market, the S&P 500 has formed an “inside day” pattern after a period of tariff-related fluctuations. There is caution among traders as they assess the current market situation. Forex and commodity brokers are being reviewed for their performance and offerings. Different global regions have brokers focusing on currencies, CFDs, and commodities, with factors such as leverage and regulation playing a role in broker selection. The rise in crude oil inventories, which exceeded expectations, indicates weakened demand. The latest data from the Energy Information Administration (EIA) mirrored the API trend, showing a build of 3.1 million barrels last week. This reinforces a bearish outlook, similar to the demand drop we experienced in early 2023. In this context, selling front-month crude futures or buying puts on oil ETFs may be wise strategies.

The Flight To Safety

The shift to safer investments is clear, with gold hitting record highs over $4,350. The ongoing US government shutdown is a major factor, echoing the 35-day shutdown from 2018-2019, which cost an estimated $11 billion in US GDP. These fears, along with growing predictions for Federal Reserve rate cuts, suggest that buying call options on gold could be a lucrative move. The US dollar is likely to weaken as long as news of the government shutdown and tariff discussions remain prominent. According to the CME FedWatch tool, there’s now over an 80% chance of a Fed rate cut by December, which poses a significant challenge for the dollar. This situation favors strategies like buying calls on EUR/USD or puts on USD/JPY to take advantage of further dollar decline. The S&P 500 is showing strong indecision after recent volatility due to tariffs. An “inside day” pattern like this often occurs before a major market move, though the direction is still uncertain. The VIX index, which measures expected volatility, is around 18, well above its yearly lows, indicating that traders are prepared for fluctuations rather than being complacent. In light of this uncertainty in equities, derivative traders might look into strategies that benefit from significant price movements in either direction. Approaches like long straddles or strangles on major indices like the SPX could be useful in the coming weeks. This way, traders can profit from the resolution of the shutdown or new tariff developments without needing to predict the market’s exact reaction. Create your live VT Markets account and start trading now.

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