Back

US economic data strengthens the Dollar, but gold prices rise over 1% to around $3,980

Gold prices have risen by over 1%, bouncing back from a low of $3,929 to around $3,980. This increase is influenced by positive ISM Services and ADP jobs data. Concerns about inflation and comments from the Federal Reserve also play a role.

Market Sentiment and Inflation

Although a positive market mood may limit gold’s rise, expectations of rate cuts and geopolitical tensions keep it attractive. The ADP reported more job hires than expected, adding to market fluctuations. Meanwhile, the Prices Paid Index reached its highest level since October 2022, indicating rising inflation, even as Fed officials remain cautious. Traders are closely watching a US Supreme Court case about past tariffs. The ISM Services PMI improved to 52.4, exceeding expectations, and US employment numbers were also higher than predicted. This shifted some predictions about a Fed rate cut in December, while the US Dollar Index rose slightly and Treasury yields increased. Gold is trending towards $4,000. However, it may face challenges from sellers if it falls below the October 28 low of $3,886. Gold’s price trends are closely tied to the US Dollar and Treasury yields, showing an inverse relationship. Major gold holders, especially central banks, have notably increased their reserves recently. Despite strong U.S. economic data, gold is rallying, creating a challenging environment for traders. Last week’s strong ISM Services report and ADP job figures would typically push gold prices down. Still, demand for gold suggests other factors are influencing the market.

Geopolitical Risks and Trading Strategies

A key factor driving gold prices is persistent inflation, a trend that has intensified since the ISM Prices Paid component peaked in 2022. The latest Consumer Price Index (CPI) report for October 2025 showed a year-over-year rise of 4.1%, continuing to defy predictions of dropping below 4%. This reinforces the view that inflation is still a concern, supporting gold as a safe investment. This ongoing inflation has changed expectations for the Federal Reserve, creating challenges for gold. Following strong jobs data and the high CPI reading, the likelihood of a rate cut in December has dropped from 62% to 45%. The increase in the 10-year Treasury yield to 4.15% reflects this shift, making non-yielding gold less appealing in comparison. However, rising geopolitical risks, such as tensions in the South China Sea and trade disputes, are boosting demand for safe-haven investments like gold. This uncertainty isn’t fully captured by the strong economic data, helping to explain why gold remains resilient despite increasing Treasury yields. Given these mixed signals, trading strategies should focus on the potential for significant price movement rather than a fixed direction. With gold near the crucial $4,000 mark, setting up long strangles—buying out-of-the-money calls above $4,000 and puts below the support level near $3,900—could be a smart strategy. This allows traders to profit from major price swings as the market weighs inflation fears against a more hawkish Fed stance. Long-term, the trend of central bank buying continues to support the gold market. The World Gold Council’s third-quarter 2025 report revealed that central banks, especially from emerging economies, have continued their historic buying spree from 2022 and 2023. This consistent accumulation provides a safety net for prices and reinforces gold’s role as a key reserve asset in the current global economy. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

NZD/USD rises as Chinese tariffs on US goods ease, despite a weak labor market

The NZD/USD exchange rate has slightly risen after China announced it will suspend some tariffs on U.S. agricultural products. Since China is New Zealand’s biggest trading partner, this news positively impacts the New Zealand Dollar. The suspension affects 24% tariffs and starts on November 10, lasting for a year, which has improved market feelings.

Challenges in New Zealand

New Zealand, however, is facing some tough challenges. The Unemployment Rate rose to 5.3% in the third quarter, the highest since 2016. Employment Change showed no growth, raising the likelihood of a rate cut by the Reserve Bank of New Zealand at its meeting in November. The participation rate fell to 70.3%, while private wages increased by just 0.5% from the previous quarter. In the U.S., the USD is under pressure due to an ongoing budget deadlock, leading to a partial government shutdown that has lasted six weeks. The ISM Services PMI reported a slight rise to 52.4, showing the labor market remains stable. Current forecasts indicate there’s a 62% chance of another Federal Reserve rate cut in December. Recently, the New Zealand Dollar has performed best against the Japanese Yen, as shown in the currency table. Other major currencies experienced mixed results against one another, and the heat map illustrates these percentage changes in the currency market. As of November 6, 2025, the underlying weakness of the New Zealand dollar may outweigh any short-term gains from China’s tariff news. The boost from this announcement is likely temporary, especially considering New Zealand’s weak labor market. The increased unemployment rate of 5.3% provides a strong reason for the Reserve Bank of New Zealand (RBNZ) to consider cutting interest rates.

Strategic Considerations

We should prepare for a lower NZD/USD exchange rate before the RBNZ meeting on November 26. Buying NZD/USD put options that expire in December could be a smart move to benefit from the expected interest rate cut. The 5.3% unemployment rate continues a worrying trend we have seen over the past two years, as it has risen steadily from below 4% in 2023. History shows how sensitive the Kiwi is to these changes, as evidenced by the aggressive RBNZ rate cut in August 2019, which caused the currency to drop. With the market already expecting a 25-basis-point cut this month, any indication of further easing in early 2026 may lead to a quicker decline in the New Zealand dollar. This suggests a bearish outlook for the currency. While the U.S. dollar also faces challenges like the ongoing government shutdown, the RBNZ’s path is clearer. The 62% chance of a Federal Reserve cut in December is less certain than the highly likely cuts from the RBNZ. In the coming weeks, the RBNZ’s definite actions could weigh more heavily, indicating that the New Zealand dollar has more potential to fall than the U.S. dollar. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Miran from the Fed sees the October employment report as a surprisingly positive development.

The recent ADP report showed an unexpected increase in jobs for US companies in October. Federal Reserve Governor Stephen Miran mentioned that job market trends are steady, hinting at a possible interest rate cut soon, based on the latest job data. Miran pointed out that various economic factors like supply, demand, and tariffs affect monetary policy decisions. He is open to changing interest rates, with reductions possible in December. This move is especially relevant as drops in shelter costs might help ease overall inflation.

US Dollar Currency Changes

A table on currency changes indicates that the US Dollar is currently the strongest against the Japanese Yen. The table lists percentage changes: the US Dollar remained at -0.00% compared to the Euro and had a 0.39% change against the British Pound. This visual guide allows users to easily track currency shifts, using the left column for base currencies, while the top row shows quote currencies, making percentage changes simple to find. The results highlight variations across major currencies, showcasing the changing nature of currency values. A senior Federal Reserve official is now saying that current policies are too strict, suggesting that a rate cut in December seems reasonable. This is a clear message for traders to prepare for a more lenient monetary policy. How the market reacts will depend on upcoming data confirming this outlook. This view is strengthened by the rising likelihood of a December rate cut. According to the CME FedWatch Tool, the chances have jumped from 45% to over 65% in the last 24 hours. Given this change, it’s wise to consider investments in interest rate futures, such as Secured Overnight Financing Rate (SOFR) futures, to take advantage of potentially lower rates. This strategy assumes that the Fed will respond to these dovish signals.

Falling Inflation and Market Opportunities

The official’s belief in falling inflation, driven by declining shelter costs, aligns with recent trends. The October 2025 CPI report showed that shelter cost growth slowed to an annual rate of 3.2%, down from 5.5% at the start of the year. This gives the Fed more reasons to ease policies without worrying about a rise in inflation. For equity markets, a shift towards rate cuts is a strong positive signal, as lower borrowing costs benefit corporate earnings and valuations. We are considering December and January expiry call options on the S&P 500 and Nasdaq 100. This strategy recalls the market rallies of 2019, after the Fed reversed its stance on rate hikes. Although the US dollar is strong against the Japanese Yen today, a Fed rate cut could lead to downward pressure on the dollar in the coming weeks. The Dollar Index (DXY) has been fluctuating within a narrow range, and a confirmed policy change could trigger a breakdown. We recommend that traders consider buying put options on the USD or taking long positions in currency pairs like EUR/USD. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

GBP/USD stabilizes after recent losses as UK finance minister hints at possible tax increases

The GBP/USD pair has stabilized after a 0.90% drop triggered by the UK finance minister’s hints at possible tax increases. It is currently trading at 1.3028, showing minimal changes from earlier levels. In early European trading, GBP/USD made slight gains around 1.3025, helped by a weaker US Dollar. However, further growth might be limited due to looming tax hikes in the UK. Traders are awaiting US private payroll data and ISM Services PMI reports for further guidance.

Latest Currency Movements

On Tuesday, GBP/USD continued to drop, falling below 1.3100 and losing about 0.9% in just one day. The British Pound has struggled against the US Dollar, finishing flat or lower in 10 of the last 12 trading sessions, highlighting a downward trend. With GBP/USD hitting 1.3028, the outlook for the pound appears bearish. The finance minister’s comments about tax increases are creating notable downward pressure. This suggests that any rebounds will likely be limited in the short term. The fiscal tightening comes at a challenging time, following a report from the Office for National Statistics that showed the UK economy grew by only 0.2% in the third quarter of 2025. Given the economy’s fragility, tax increases could heighten the risk of a recession, making the pound less appealing. Traders might want to consider buying put options with strike prices below 1.3000 to take advantage of expected further weakness. However, it’s important to closely monitor today’s US private payroll and ISM Services data. A strong US jobs report, reflecting the labor market’s resilience throughout 2024, could boost the dollar and likely push GBP/USD below critical support levels. This uncertainty suggests increased volatility, making a long straddle an effective strategy for profiting from significant price movements in either direction.

Future Economic Strategies

Reflecting on the Bank of England’s challenges with inflation in 2023 and 2024, the government’s push for fiscal tightening may ease pressure on the central bank to raise rates further. This policy difference with a potentially hawkish US Federal Reserve poses a fundamental challenge for the currency pair. Currently, the market anticipates a higher chance of a rate cut from the Bank of England in early 2026 compared to the US Fed. This week’s accelerated losses indicate that bearish momentum is growing. It’s essential to watch implied volatility levels on GBP/USD options, expected to rise ahead of the US data releases. This environment favors strategies that benefit from falling prices or significant movements outside the current tight range. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

The euro is slightly lower against the US dollar due to positive US economic indicators.

The Euro is currently weaker against the U.S. Dollar, nearing three-month lows as the Dollar benefits from strong U.S. economic data. The EUR/USD exchange rate remains mostly steady at around 1.1477, despite a busy week for U.S. economic reports. Meanwhile, the U.S. Dollar Index has risen to its highest level since May, reaching 100.30. The recent ADP Employment Change report revealed an increase of 42,000 private jobs in October, beating expectations and recovering from a previous drop. The ISM Services PMI also improved, climbing to 52.4 in October from 50 in September, suggesting stronger business activity and new orders. However, the employment index still showed signs of contraction.

U.S. Economy Shows Strong Momentum

The S&P Global U.S. Services PMI rose to 54.8 in October, indicating robust demand growth and job creation. This suggests that the U.S. economy is entering the fourth quarter with momentum, aligning with a projected annual GDP growth of 2.5%. The Federal Reserve is expected to keep a cautious approach following a 25-basis-point rate cut, with a 62% chance of another cut in December. The U.S. Dollar has strengthened against various currencies, particularly the Japanese Yen, while the Euro has remained weak. A heat map illustrates the percentage changes in currencies relative to the U.S. Dollar. The strong U.S. economic data, especially the ISM and ADP reports, indicate that the American economy is performing better than expected. This suggests that the Federal Reserve may delay further rate cuts, continuing its cautious approach. As a result, the U.S. Dollar is likely to stay strong against the Euro in the upcoming weeks. A key detail is the increase in the ISM Prices Paid component, which aligns with this fall’s broader inflation trends. The latest October Consumer Price Index (CPI) showed core inflation stubbornly at 3.7%, leaving the Fed with little reason to ease policies soon. Therefore, derivative strategies should account for a well-supported dollar, backed by higher interest rates.

Eurozone Facing Economic Challenges

On the other hand, the Eurozone economy is showing signs of weakness. The recent German IFO Business Climate index dropped again to 86.9, raising recession fears in Europe’s largest economy. This contrast between a strong U.S. economy and a struggling Eurozone makes betting against the EUR/USD pair an appealing trade. With this outlook, buying EUR/USD put options with expirations in December 2025 and January 2026 could be wise, as there may be more declines ahead. The rapid shift in Fed rate-cut expectations has added uncertainty to the market, which could increase currency volatility. Establishing bearish positions now, around the 1.1477 level, seems like a prudent move. This situation is reminiscent of 2022 when the Fed’s aggressive rate hikes significantly outpaced those of the European Central Bank. This policy gap was the major factor driving the EUR/USD rate below parity. While we do not predict a change of that scale, the principle of a widening interest rate gap favoring the dollar is relevant again. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

GBP/USD stabilizes after a decline amid concerns over potential tax increases by Reeves

GBP/USD stabilized after a 0.90% drop due to UK finance minister Rachel Reeves’ warnings about tax hikes to achieve fiscal goals. The pair is currently trading at 1.3028, remaining unchanged as traders remain cautious. The Bank of England (BoE) is expected to keep rates steady, with some predicting a rate cut by year-end due to soft inflation data. In the US, strong economic indicators are emerging. The ISM Services PMI rose from 50 to 52.4 in October, and Prices Paid increased to 70. Additionally, the ADP Employment Change report showed an increase of 42,000 non-farm jobs, beating the forecast of 25,000. As a result, the likelihood of a Federal Reserve rate cut in December has decreased from 68% to 64%.

Technical Outlook on GBP/USD

From a technical perspective, GBP/USD may face further declines. It dropped below the 200-day Simple Moving Average at 1.3254. If it goes below 1.3000, it could approach the April 8 low of 1.2708. However, if it breaks above 1.3100, it may test this week’s high at 1.3139. Notably, the British Pound showed strength against the New Zealand Dollar this week, despite market fluctuations. There is considerable pressure on the Pound after the UK finance minister’s warning about possible tax hikes. This raises concerns about fiscal tightening, leading to challenges for the currency, particularly as it struggles to maintain the 1.3030 level. We see this as a clear bearish shift in sentiment for the coming weeks. The latest CPI reading for October stood at just 2.1%, suggesting that the Bank of England could consider cutting rates in December. This soft inflation, along with widening public deficit figures, puts the BoE in a tough situation. This increases the appeal of derivatives that benefit from falling UK interest rate expectations.

Implications of US Economic Data

On the US side, the economy appears strong, with last Friday’s Non-Farm Payrolls report showing a robust addition of 195,000 jobs. This solid labor market data reduced the market’s expectation for a December Fed rate cut to just 55%, as per the CME FedWatch tool. The difference between a likely Fed rate hold and a possible cut from the BoE drives our strategy. We recall how sensitive the Pound was to fiscal policy changes in late 2022, and these new warnings are triggering similar concerns in the market. While the current situation differs, the fear of a policy error harming growth remains. Historical patterns suggest that further discussions about tax increases could lead to another sharp decline. Given this outlook, we believe that positioning for further downside in GBP/USD is sensible. Buying put options with a strike price below the 1.3000 psychological level offers a defined-risk way to bet on a move toward the April lows near 1.2708. Increased volatility is anticipated around the upcoming BoE meeting, making options an appealing strategy. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

US stocks increase as tech sector shows resilience, with Nasdaq up 0.4%

US stocks began the day on a positive note, bouncing back from Tuesday’s decline. The tech sector, especially the Nasdaq, rose by 0.4%. However, some tech stocks, like Palantir, are still considered overvalued and dropped by 4%. On the other hand, major tech companies like Amazon, Meta, Tesla, AMD, and Nvidia have lower price-to-earnings (P/E) ratios compared to their 10-year averages, which helps to stabilize their market positions.

Market Fundamentals

The S&P 500 has a price-to-earnings ratio of 25, while the Nasdaq 100 sits at 31. Although these figures are above the average from the past five years, they are not high enough to trigger a sell-off. Both indices show strong gross margins, with the Nasdaq 100 at 52% and the S&P 500 at 38%, compared to 31% for the Russell 2000. Most blue-chip companies in the S&P 500 are reporting positive earnings, with only 6% showing losses. Overall, market fundamentals look strong, and there is a good chance of interest rate cuts before the year ends. The job market is stable, as the ADP report indicates a surprising increase of 42,000 jobs in October. This stability bodes well for the US consumer and tech sectors. Weaker sectors in the S&P 500 may improve with favorable economic conditions. After the market’s quick recovery on November 4, 2025, implied volatility has likely decreased from its previous peak. This presents a chance for us to sell premium, believing that the recent sell-off was an overreaction and not the beginning of a new downtrend. We should think about selling cash-secured puts or put credit spreads on solid S&P 500 companies that experienced dips, allowing us to either earn premium or buy quality stocks at lower prices. The outlook for large-cap tech remains positive, with key players like Nvidia and Meta trading at P/E ratios below their 10-year averages. To take advantage of this, we might consider using bull call spreads on the Nasdaq 100 ETF (QQQ) in the upcoming weeks. This approach lets us participate in potential gains while managing our risk, which is a wise idea following Tuesday’s market reminder.

Tech Sector Perspective

We believe this situation is not comparable to the dot-com bubble when reviewing historical data. In late 1999, the Nasdaq 100’s P/E ratio surpassed 80, a huge difference compared to today’s ratio of 31, which is backed by strong earnings and margins. Thus, we should view any significant drops in the tech sector as opportunities to buy rather than signs of a bubble. With the likelihood of a Federal Reserve rate cut before the year ends—currently assessed by the CME FedWatch Tool at over 65%—stocks have favorable conditions. This is especially true for consumer-focused sectors that recently suffered losses. We see potential in purchasing calls on the Consumer Discretionary Select Sector SPDR Fund (XLY), which dropped over 12% in October 2025 but could see a quick recovery with positive economic news. Despite this upbeat view, Tuesday’s sell-off serves as a reminder that markets can shift rapidly. To guard against sudden drops, we can buy inexpensive out-of-the-money put options on the SPX, set to expire in late December. This strategy provides economical insurance for our portfolios, allowing us to stay invested while protecting against risks on the downside. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

USD/CHF stays stable around 0.8100, affected by US data and shutdown concerns

USD/CHF was trading around 0.8100 on Wednesday, showing little change after hitting a three-month high of 0.8124. US data offered support for the US Dollar, with a 42,000 increase in private sector jobs and the ISM Services PMI rising to 52.4. However, there’s still uncertainty about the Federal Reserve’s future actions. Fed Chair Jerome Powell’s recent comments left December’s rate cut uncertain, shaping market expectations. The CME FedWatch tool now shows a 68% chance of a rate cut, down from 94% earlier. Ongoing political issues in the US, especially the long government shutdown, continue to affect market views and delay economic data.

Swiss Franc Strength

The Swiss Franc remains strong amid global risk concerns. Warnings from major banking executives about potential market corrections are boosting demand for safe-haven assets. We are now looking forward to Swiss unemployment data, which should give us a better understanding of the country’s job market. The heat map illustrates the performance of the US Dollar against other currencies, with the Dollar showing the most strength against the Yen. Global market conditions are affecting both domestic and international dynamics. The US Dollar is receiving mixed signals; while strong private sector job growth supports it, the ongoing government shutdown, which is now in its sixth week, is limiting its potential. As a result, pairs like USD/CHF are staying within a tight range around 0.8100, making for a volatile environment. Market expectations for a December rate cut by the Federal Reserve are diminishing. The CME FedWatch Tool indicates that the likelihood has dropped to 61%, down from over 90% just weeks ago. This uncertainty suggests traders should be careful with long-term bets on the dollar.

Impact of Political Stalemate

The political deadlock now has real consequences beyond mere sentiment. Fitch recently put the US on ‘Rating Watch Negative,’ recalling the downgrade we experienced in August 2023 due to similar fiscal concerns. Additionally, the Bureau of Labor Statistics has announced that the official October Non-Farm Payrolls report will be indefinitely delayed, forcing reliance on partial private data. On the flip side, the Swiss Franc is gaining from a shift towards safe investments. The VIX index, which measures market fear, surged over 25 this past week—a level not seen since the regional banking issues earlier in 2024. This risk-averse environment is likely to continue supporting the Franc and limit any rallies in USD/CHF. Given this back-and-forth, we should consider strategies that could benefit from sudden volatility spikes. Buying straddles or strangles on USD/CHF might be a good strategy, as they profit from significant price movements in either direction once the shutdown is resolved or the Fed provides clearer guidance. Alternatively, for those who think the stalemate will persist into November, selling iron condors could capture premiums while the pair remains in its current range. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

US crude oil stock changes exceed forecasts, reporting 5.202 million instead of 1.8 million.

The US Energy Information Administration reported an increase of 5.202 million barrels in crude oil stocks for the week ending October 31. This was much higher than the expected rise of 1.8 million barrels. As a result, WTI crude oil prices have dropped below $60. Financial Market Developments In the foreign exchange markets, the EUR/USD pair remains steady near 1.15 as traders recalibrate their expectations on Federal Reserve rate cuts. The Dow Jones Industrial Average has rebounded, gaining 300 points. In other financial news, gold prices have risen by more than 1%, despite strong US economic data. Additionally, the NZD/USD pair saw a slight increase due to China’s easing of tariffs. Ethereum is showing signs of recovery, maintaining support around $3,350 after recent drops. However, Stellar (XLM) may face a downturn, as a ‘Death Cross’ pattern on the charts indicates a possible 15% correction. The overall market sentiment might be challenged by upcoming economic data and central bank decisions. The unexpected increase in crude oil inventories signals bearish trends in the energy market. With stockpiles up by over 5.2 million barrels compared to a forecast of 1.8 million, this indicates weakening demand as winter approaches. Traders may want to consider short positions, possibly through buying put options on WTI futures, to hedge against or profit from further price declines below $60 per barrel. Market expectations for a Federal Reserve rate cut are decreasing, which is strengthening the US Dollar. With October’s core inflation rate above 3.5% and recent job data surprising analysts, there seems to be a strong case for the Fed to keep its restrictive stance. This makes shorting currency pairs like EUR/USD via futures or options a practical strategy, as the dollar’s yield advantage is likely to remain. Risk Management Amid Uncertainty Although the Dow Jones has rebounded, there are still significant risks because of the ongoing US government shutdown, which has now lasted over 40 days. This political uncertainty is beginning to affect economic forecasts, making protective strategies wise for equity portfolios. It could be a good time to buy put options on major indices like the S&P 500 to protect against a sudden market downturn if negotiations stall. Gold’s movement toward the $4,000 mark is noteworthy, especially since it’s happening alongside a strong dollar. This situation is unusual and indicates a significant push towards safer investments, as many investors are concerned about the political climate in the US. This divergence from typical market behavior suggests that long positions in gold, possibly through call options on futures, could be a strong move in the upcoming weeks. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Steady gold prices show balanced demand, but a stronger US dollar limits gains

Gold is currently trading within a tight range, sitting around $3,975 after dipping to $3,928 on Tuesday. Demand for gold remains strong due to a global shift towards risk aversion. Concerns are rising over US tech stocks and the possibility of corrections in their valuations. This unease has spread through both Asia and Europe. Adding to the complexity, the US government has been in a shutdown for 36 days.

The Influence of the US Dollar

The US Dollar is gaining strength, which is hindering gold’s price increases. However, fear in the market is still providing some support for gold. Recently released ADP data shows that private employment rose by 42,000 in October, surpassing expectations. Additionally, the ISM Services PMI indicates growth in this sector. In the political arena, President Trump has issued executive orders to ease trade tensions with China, but the US Supreme Court is reviewing tariffs related to these orders after lower courts ruled against them. The potential for interest rate cuts by the Federal Reserve is currently unclear. There is a 68% chance of rate cuts in December, a decrease from 94%. Due to the shutdown, official economic data is delayed, which impacts the Fed’s forecasting ability. Technically, gold is showing signs of indecisiveness, with a slight bearish lean as it trades below the 21-period Simple Moving Average. The Relative Strength Index is sitting at 44, indicating weak momentum and suggesting that gold may continue to trade within its current range. Gold remains trapped between $3,900 and $4,050, reflecting substantial indecision in the market. In the short term, strategies that profit from low volatility could be beneficial. However, several events on the horizon could lead to a significant price breakout.

The Shutdown’s Impact

The strong US dollar, currently at a multi-month high of 100.30 on the DXY, is the main factor keeping gold prices down. Strong private payroll numbers and a rebound in the ISM Services PMI are driving this dollar appreciation. In this context, bearish strategies, such as buying put options targeting a drop below the $3,900 support level, could be appealing if strong US economic data continues to emerge. Conversely, the ongoing US government shutdown, now the longest in history at 36 days, is increasing risk aversion, which helps support gold prices. During a similar shutdown from 2018 to 2019, which lasted 35 days, gold rose by about 3%. The longer this shutdown lasts, the higher the likelihood of a price rally due to economic uncertainty. The Federal Reserve’s current position also adds tension, with the market predicting a 68% chance of a December rate cut. Although this probability has decreased, it still provides a support floor for gold prices. Any indications of economic weakness caused by the shutdown could quickly raise these odds back above 90%, potentially triggering a sharp increase in gold and making call options a strategic choice. Additionally, we should monitor inflation, as the ISM Prices Paid component has surged to 70.0, a notably high figure. This suggests ongoing inflationary pressures, which typically enhance gold’s appeal as a hedge. This situation is similar to 2022 when central banks purchased a record 1,136 tonnes of gold, highlighting its long-term value against inflation. One key event to watch for this week is the Supreme Court hearing regarding presidential tariff authority. A ruling that limits these powers could weaken the US dollar and push gold prices up, while a decision to uphold them could strengthen the dollar. The uncertainty surrounding this ruling suggests that volatility may return soon, making it wise to prepare for a breakout from the current tight trading range. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now

Back To Top
server

Hello there 👋

How can I help you?

Chat with our team instantly

Live Chat

Start a live conversation through...

  • Telegram
    hold On hold
  • Coming Soon...

Hello there 👋

How can I help you?

telegram

Scan the QR code with your smartphone to start a chat with us, or click here.

Don’t have the Telegram App or Desktop installed? Use Web Telegram instead.

QR code