Gold prices are struggling to break above the $4,045 resistance level, despite attempts to bounce back from lows below $3,900. The strength of the US Dollar, boosted by the Federal Reserve’s recent actions, is impacting gold’s recovery, making the $3,900 support level vulnerable. Overall, gold faces challenges as the US Dollar gains ground, supported by the Fed’s policies. After last week’s rate cuts, Chairman Powell also expressed caution and discouraged expectations for monetary easing, which boosted US treasury yields and the Dollar.

Mixed Technical Outlook

Technical analysis suggests a mixed scenario. The 4-hour Relative Strength Index (RSI) is around 50, indicating a stagnant market. The inability of bulls to break past the resistance of $4,030 to $4,045 puts the $3,900 support level at risk. If gold surpasses $4,045, bearish pressure could lessen, shifting attention to the $4,150 area. Conversely, a drop below $3,890 may redirect focus to October 2’s low around $3,820. Gold is seen as a safe-haven investment and a hedge against inflation, with central banks being the largest buyers to boost economic confidence. Gold typically moves inversely to the USD and Treasuries, rising when interest rates are low and geopolitical tensions are high, while higher rates tend to push its value down. With gold trading close to $4,000, the immediate outlook is neutral. The market is caught between key resistance at $4,045 and solid support around $3,900. This narrow range suggests that options traders might explore strategies that benefit from low volatility, while being prepared for a potential breakout.

Influence of the US Dollar

The main challenge for gold is the strong US Dollar, influenced by the Fed’s recent hawkish tone. A similar pattern occurred in late 2023 when the Fed indicated higher rates would stick, capping gold’s growth. With the latest October inflation figures stubbornly high at 3.8%, Chairman Powell’s caution against expecting another rate cut in December is significant. Adding to the pressure, US 10-year Treasury yields remain steady at 4.9%, making non-yielding gold less appealing to investors. Today’s unexpected strong manufacturing data supports a robust economy, which could postpone any easing by the Fed. These factors indicate that reaching the $4,045 resistance level may encounter substantial selling pressure. Traders looking to take advantage of this uncertainty might consider selling options strangles with strike prices outside the $3,900-$4,045 range. The neutral RSI reading supports this view of a temporarily stalled market, but protective stops should be placed just beyond these crucial levels to guard against a sudden price movement. A bearish strategy could involve waiting for a clear break below the $3,890 support. A confirmed move past this level might lead to further selling, allowing traders to open short futures positions or buy put options. The initial target for this strategy would be the support area around $3,820. On the other hand, a bullish approach requires patience and a clear sign that Dollar strength is declining. A sustained move above $4,045 would signal that bearish pressure is easing and create an opportunity to buy call options. The first target on the upside would then be the $4,150 resistance zone. Despite these short-term challenges, it’s important to recognize the strong underlying support for gold. Data from the World Gold Council for the third quarter of 2025 shows that central banks, especially from emerging markets, are continuing to buy aggressively. This steady demand sets a long-term price floor, suggesting caution against overly bearish positions. Create your live VT Markets account and start trading now.

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The US Dollar is currently holding steady against the Japanese Yen, around the 154.00 mark. This comes after a rise from 151.50, driven by a strong Federal Reserve stance, while the Bank of Japan’s interest rate moves have provided little help for the Yen.

USD/JPY Technical Analysis

The USD/JPY currency pair is forming a small triangle pattern, suggesting it may continue rising towards 154.30 to 154.85. Technical indicators present mixed signals: the RSI is above 50, yet the MACD hints at a possible pullback. If the trend turns bearish, USD/JPY may test support levels between 153.00 and 153.25. Today, the US Dollar gained strength against the Swiss Franc, increasing by 0.33%. Other notable changes include a 0.21% rise against the Yen and a slight 0.07% dip against the Canadian Dollar. The heat map below displays percentage changes among major currencies, showing the US Dollar’s varying performance against the Euro and Japanese Yen. FXStreet consistently provides financial insights for savvy trading, with a legal disclaimer highlighting the risks of market investments. We see the US Dollar stabilizing its gains against the Yen around 154.00. This pause follows a rally fueled by the Federal Reserve’s firm position on interest rates. The market is largely disregarding the Bank of Japan’s commitment to tightening, placing the Yen under pressure.

US and Japan Economic Comparison

The economic landscape favors a stronger Dollar, especially after last week’s US jobs report for October revealed an impressive 210,000 jobs added, surpassing expectations. With core inflation lingering near 3.4%, the Fed has no reason to shift its hawkish stance. Conversely, Japan’s core CPI is stuck around 2.1%, diminishing the chances of immediate action from the Bank of Japan. For derivative traders, this situation points to a potential upside breakout in USD/JPY. Strategies like buying call options near a strike price of 154.50 or using bull call spreads might be effective in the weeks ahead. The technical chart shows a continuation pattern, reinforcing the belief that the next significant move will be upward. We should aim for the February 13 high of 154.85 as the first target for these bullish trades. A clear break above this level could lead to a further rise toward the 155.30 extension target. Options market data supports this outlook, with one-month risk reversals showing a consistent premium for USD calls over JPY calls. The main risk to this view is potential intervention by Japanese authorities, which is a real concern as the pair approaches 154.00. Past actions to defend the currency led to sharp Yen rallies in 2022 and 2024. This makes holding long positions without a hedge risky. To protect against a sudden downturn, we should consider buying inexpensive out-of-the-money put options as insurance. A put option with a strike price around 152.50 could shield our portfolio from a sudden drop. This strategy lets us maintain a bullish outlook while managing potential losses if officials decide to intervene. Create your live VT Markets account and start trading now.

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The Indian Rupee is currently weak, trading at around 88.95 against the US Dollar. In October, Rs. 2,346.89 crores left the Indian equity market, which is less than in previous months. Even though the US Dollar Index has reached a three-month high of 99.95, the USD/INR isn’t rising much. Foreign Institutional Investors are slowing down their selling activities in India.

Reserve Bank Of India And Market Sentiment

The Reserve Bank of India (RBI) might step in as the USD/INR nears its peak of 89.12. Ongoing trade discussions between the US and India haven’t led to an agreement, affecting market feelings. The US Dollar’s strength comes from uncertainty about further interest rate cuts by the Federal Reserve. Chair Jerome Powell’s recent statements suggest that a rate cut in December is uncertain. The probability of a cut is now 69.3%, down from 91.7%. Technical data shows the USD/INR close to 88.95, facing resistance at its peak of 89.12. Tariffs are a major topic in global trade talks, with differing opinions on their effects. Donald Trump aims to use tariffs to strengthen the US economy, focusing on trade with Mexico, China, and Canada. This supports his strategy for the 2024 US presidential election.

Dollar Strength And Trading Strategy

The Indian Rupee is surprisingly strong, staying below 89.00 while the US Dollar Index is at a three-month high. Although the trend for USD/INR is upward, there’s significant resistance preventing a new peak. This scenario is shaped by the aggressive stance of the US Federal Reserve and reduced foreign investment outflows from India. In the coming weeks, we will closely monitor the RBI’s potential intervention. The USD/INR is nearing its all-time high of 89.12, a level the RBI is likely to protect to stop significant depreciation. India’s foreign exchange reserves have remained above $600 billion throughout 2023 and 2024; this gives the RBI enough resources to limit the pair’s upswing, making a breakout difficult. Meanwhile, the US Dollar is strong because market confidence in a December 2025 rate cut from the Federal Reserve is waning. The likelihood of a cut has fallen from over 90% to below 70% in just a week. We’ve seen this trend throughout 2023-2024 as inflation remains persistent. This sustained strength in the dollar creates a solid support level for the USD/INR pair, preventing major declines. This situation leads to a classic range-bound scenario, with strong resistance around 89.12 and firm support below. For those trading derivatives, selling call options with strike prices at or just above the all-time high could be a good strategy for collecting premiums. Alternatively, the tension between opposing forces could cause sharp movements, making volatility strategies like buying straddles attractive. It’s important to note that foreign investors have sold Indian stocks for four consecutive months, though the pace slowed in October 2025. This, along with no progress on a US-India trade deal, creates a cautious atmosphere. While the slowed selling helps the Rupee for now, a return to the heavy outflows seen from July to September 2025 could quickly challenge the RBI’s strength at its historic high. Create your live VT Markets account and start trading now.

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In the Eurozone ECB officials, like François Villeroy de Galhau and Martins Kazaks, emphasize the need for a flexible policy due to balanced risks in inflation and growth. Peter Kazimir, the Governor of Slovakia’s National Bank, agrees, suggesting that current monetary policy should remain unchanged. The EUR/JPY currency pair is being supported by interest rate differences and good market sentiment, as investors speculate about the Bank of Japan’s (BoJ) future actions. There is caution in the market regarding possible interventions in the Yen. Today, the Euro was strongest against the Swiss Franc and showed varying performance against other major currencies. As of November 3rd, 2025, a clear divide is forming between the Bank of Japan (BoJ) and the European Central Bank (ECB). The BoJ is hinting at an interest rate hike in December, which could strengthen the Yen, while the ECB plans to keep rates steady for an extended period. This difference is key to watch in the EUR/JPY pair in the coming weeks. To provide some context, Japan’s core inflation has stayed above 2% for over a year, recently reported at 2.7% for October 2025. This puts pressure on the BoJ to exit its negative interest rate policy. Meanwhile, with the ECB’s key deposit rate at 3.25%, the interest rate gap continues to support the euro. This situation makes the EUR/JPY pair sensitive to new data or comments from central banks. Managing Risk with Options Given the uncertainty about a potential BoJ rate hike, using options to manage risk is a wise choice. Buying EUR/JPY put options that expire in January 2026 is a straightforward strategy to prepare for a stronger Yen if the BoJ makes a move in December. This approach allows for potential gains if the pair declines while limiting losses to the premium paid for the options. As speculation increases, implied volatility in the EUR/JPY options market is likely to rise ahead of the mid-December BoJ meeting. We’ve seen this pattern before, especially in late 2022 when the BoJ surprised markets with a change in its yield curve control policy. For traders expecting a significant price move but uncertain about the direction, purchasing a strangle—buying both a call and put option that is out-of-the-money—could work well. On the other hand, if we think the new Prime Minister’s spending plans will lead the BoJ to delay its interest rate hike, the current favorable interest rate differential will continue to benefit the euro. In this case, selling out-of-the-money EUR/JPY put options could generate income, profiting from a stable or increasing pair while allowing us to collect the option premium as time goes on. We should also keep an eye on the ongoing threat of direct intervention by Japanese authorities, which often limits rapid Yen weakness. This suggests that the upside potential for EUR/JPY may be capped, likely around the 180.00 level. Therefore, selling call spreads could be an appealing strategy to take advantage of a sideways or downward market while managing risk. Create your live VT Markets account and start trading now.

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Peter Kazimir, a member of the ECB Governing Council, believes there is no need to change monetary policy. He sees the risks to inflation and the economy as balanced and advises caution against making unnecessary adjustments. Future decisions will depend on new data. Kazimir’s remarks had little effect on the EUR/USD exchange rate, which fell by 0.2% to about 1.1510. The ECB targets an inflation rate of around 2% by adjusting interest rates, which influences the Euro’s strength.

The ECB’s Role in the Eurozone Economy

The ECB, based in Frankfurt, shapes the Eurozone’s economy using tools like Quantitative Easing (QE) and Quantitative Tightening (QT). QE involves buying assets to increase liquidity, which often weakens the Euro. This method was used during crises like the 2009 financial recession and the COVID pandemic. On the other hand, QT reduces liquidity by stopping bond purchases and reinvestments, typically strengthening the Euro. The ECB uses these strategies based on economic conditions to stabilize prices and meets eight times a year to set monetary policy. Kazimir’s recent comments suggest the central bank is currently stable. His belief that the risks to the economy and inflation are roughly equal means we should not expect immediate changes to monetary policy. This data-dependent approach requires us to pay close attention to upcoming economic reports. Recent data supports this view, with Eurozone inflation for October 2025 at 2.1%, just above the ECB’s target. However, the sluggish GDP growth of 0.2% in Q3 and a Composite PMI reading of 50.5 indicate an economy that is growing but has limited room for movement. This mixed data reinforces the idea that the ECB’s next move could go either way.

Impact on Trading and Investment Strategies

For traders, this suggests that implied volatility on EUR-related assets may stay low in the coming weeks. This situation can benefit strategies that profit from low volatility, such as selling strangles on the EUR/USD, which is currently near 1.1750. However, the focus on data creates opportunities for volatility spikes around key reports like the next inflation update. Remember the aggressive rate hikes from 2022-2023 to address high inflation after the pandemic. The current neutral position shows the bank’s comfort with its policy. For those trading interest rate futures, this likely means the front end of the curve will remain stable, with price movements driven by changes in long-term expectations. Create your live VT Markets account and start trading now.

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Risk currencies are not performing as expected following a trade truce between the US and China. Two main reasons are keeping the dollar strong: the market’s reassessment of the Federal Reserve’s interest rate cuts and tight money in US markets. The chance of a 25 basis point rate cut by the Fed in December has fallen to 66%. This change reflects the Fed’s recent actions and important upcoming US economic reports, such as the ISM manufacturing numbers and the ADP jobs report, which could influence the value of the dollar.

Tightness in US Money Markets

Tight conditions in US money markets are marked by low bank reserves and increased cash reserves in the Treasury. Recent data indicates that banks borrowed $50 billion in overnight funds from the Fed, paying higher rates than usual. These tight money conditions often support the dollar. If these funding issues extend internationally, it could negatively impact the EUR/USD exchange rate. The DXY is likely to remain strong, around 100.00 to 100.25, unless US job data changes the outlook for a Fed rate cut. Risk currencies usually benefit from agreements like the US-China trade truce, but that isn’t happening this time. The dollar is still the focus for traders for two main reasons. First, the market is reconsidering how many times the Federal Reserve will actually lower rates. After recent comments from Fed officials, the likelihood of a December rate cut has decreased, which helps keep the dollar stable. For instance, in 2024, the Fed stuck to higher rates longer than many expected, indicating a cautious, data-driven approach.

Upcoming Economic Indicators

We are now looking at private sector data for more clues. The October ISM manufacturing figure was 46.7, indicating a shrinking factory sector and some economic weakness. The ADP jobs report coming this Wednesday will be crucial; significant job losses could push the dollar lower. The second factor boosting the dollar is the tightness in US money markets. The Fed has been shrinking its balance sheet, withdrawing a significant amount of liquidity from the financial system. The balance in the Reverse Repo Facility has fallen by over $2 trillion since its 2023 peak, making dollars rarer and more valuable. These tight conditions usually favor the dollar. We are monitoring whether pressure on dollar funding impacts international markets, which would be negative for currencies like the Euro. Currently, there are no major signs of international strain. Given this situation, traders should expect the Dollar Index (DXY) to remain strong near the top of its range, around 105.00. Betting against the dollar is risky unless upcoming job data shows enough weakness to trigger a strong market expectation of a December Fed rate cut. Create your live VT Markets account and start trading now.

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Spot Gold prices are under pressure following China’s choice to stop a VAT rebate on gold sales. This decision raises costs for consumers, impacting both investment and non-investment gold purchases from the Shanghai Gold Exchange. The EUR/USD pair is struggling, staying around 1.1500 after a recent drop as the US Dollar remains strong. All eyes are on upcoming US manufacturing data, which might affect future price movements.

The Pound Faces Challenges Against The Dollar

GBP/USD is feeling the strain, trading in the mid-1.3100s due to economic worries in the UK. The US Dollar’s strength, fueled by actions from the Federal Reserve, makes the Pound less appealing. Gold is currently priced around $4,000, despite recent drops. Expectations for gold’s recovery are limited by US Treasury bond yields and comments from the Federal Reserve, while traders await important US data. In cryptocurrency, meme coins like Dogecoin and Shiba Inu are trending downwards. Less activity from large wallet holders has increased supply pressure. Cardano (ADA) has dipped below $0.58, as its performance weakens. On-chain activity is declining, and trader sentiment is turning more bearish.

Gold Market Outlook and Derivative Strategies

As of November 3, 2025, the new Chinese tax policy on gold poses a significant challenge. This move effectively raises the price for the largest global consumer, which demanded over 1,000 tonnes in 2024 alone. With reduced demand coupled with a strong US dollar, a rise above $4,000 per ounce seems unlikely in the near future. Derivative traders might consider strategies that capitalize on gold’s downward pressure. Buying put options with strike prices below $4,000 or setting up bearish call spreads could be smart moves. The price trends seen in 2022 suggest that a hawkish Fed and a strong dollar create ongoing weakness for gold, a pattern that seems to be repeating. The strength of the US dollar is another key factor. With October 2025 inflation data showing a 3.1% annual rate, well above the Federal Reserve’s target, officials are unlikely to soften their stance. This helps maintain the dollar’s strength against currencies like the Euro and the Pound, especially since US Treasury yields remain high. For currency traders, this situation strengthens the case for shorting EUR/USD and GBP/USD futures or buying put options on these pairs. Increased implied volatility may be ahead of the upcoming US ISM Manufacturing PMI data release. A strong manufacturing report could solidify expectations for prolonged higher US rates, potentially pushing EUR/USD below the 1.1500 mark. There are also noticeable signs of a broader risk-off sentiment developing in the markets. The sharp declines in speculative assets like Dogecoin and Cardano aren’t just isolated events; on-chain data shows large investors have been pulling back for weeks. This risk aversion usually favors the US dollar and adds pressure to dollar-denominated assets, including gold. Create your live VT Markets account and start trading now.

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The USD/JPY has broken through a downward trendline after staying steady around 149. This indicates possible growth towards the 155.40–156.50 range, according to FX analysts at Société Générale.

Movement And Projections

The USD/JPY has recently moved within a short period of stability, holding around the previous gap levels near 149. By breaking above this range and crossing a multi-month downward trendline, this suggests that the upward trend is likely to continue. Looking ahead, projections indicate a gradual rise targeting the 155.40 to 156.50 range. The recent low at 151.50 is expected to provide short-term support. With the breakout above the downward trendline, there is a strong signal that the USD/JPY will keep climbing. This trend is supported by the widening gap between the Fed’s hawkish stance and the Bank of Japan’s accommodative approach. In the coming weeks, we should prepare for further dollar strength against the yen. This outlook is bolstered by October 2025’s US inflation data, which was at 3.4%. This led Fed officials to maintain their “higher for longer” policy into mid-2026. Meanwhile, Japan’s GDP shrank by 0.2% last quarter, making significant monetary tightening by the Bank of Japan very unlikely. This economic backdrop gives solid support for the pair’s rise.

Trading Strategies And Risk

In light of this, we should consider buying call options with strike prices aimed at the 155.40 target. Options that expire in December 2025 and January 2026 offer a good mix of time value and responsiveness to expected movements. The recent low of 151.50 acts as an important short-term support level, helpful for structuring trades or setting alerts. The derivatives market reflects this optimism, showing a 1.1% premium for USD/JPY calls over puts. This suggests strong market interest in potential gains. Another strategy could be selling out-of-the-money put spreads with strikes below the 150.00 level to collect premiums while keeping a positive outlook. However, we should remain cautious, remembering that Japan’s Ministry of Finance intervened multiple times when the pair neared the 160 mark in 2024. While the case for a higher USD/JPY remains strong, the risk of sudden official actions might limit gains or create sharp volatility. Using defined-risk strategies like call spreads is a wise way to aim for the 156.50 target while protecting against unexpected events. Create your live VT Markets account and start trading now.

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The Euro has dropped in value due to a rebound in the US Dollar and ongoing political uncertainties in Europe. Key issues include concerns about the French budget, a hung parliament from the Dutch elections, and lackluster French CPI figures. Even with these challenges, the overall outlook for the Euro remains supportive. In French politics, Prime Minister Lecornu’s position is shaky. Although he has survived two no-confidence votes, the left-wing coalition is pushing for a 2% tax on wealth over EUR100 million. This demand has caused tensions and could lead to budget conflicts or even a government collapse, which would impact the Euro. Currently, the daily trend shows mild bearish momentum, with the RSI decreasing. There is support at 1.1460 and resistance at 1.1630/40.

Meme Coins Face Challenges

Meme coins like Dogecoin and Shiba Inu are struggling as both large and retail investors pull back on risk. This pullback puts pressure on these digital currencies, leading to potential losses. Additionally, Cardano’s price has dropped 6% to below $0.58 due to weak on-chain activity and an increase in short positions among traders, indicating growing bearish sentiment in the market. With the US Dollar rebounding, the Euro is facing challenges from French political tensions, trading around 1.1514. The French government’s instability and budget disputes create near-term uncertainty. This situation is similar to the market anxieties during the 2022 legislative elections, which resulted in a hung parliament. The political risk is evident, as the gap between French and German 10-year government bonds has widened to 65 basis points, the highest this quarter. This indicates that bond traders are asking for a higher return to hold French debt during the ongoing budget discussions. As a result, we expect this pressure to continue affecting the Euro in the near future.

Options for Derivative Traders

For derivative traders, now may be the time to consider buying put options on the EUR/USD, with strike prices close to the 1.1460 support level, as a way to protect against further declines. This approach offers downside protection while allowing for exposure to the Euro’s potential longer-term strength. It’s a strategic response to the current political-driven volatility. This cautious sentiment is also seen in other markets, with speculative assets like meme coins and Cardano showing notable weakness. Recent on-chain data indicates that large wallet holders have been scaling back their positions, with net outflows from exchanges reaching a three-month high. This broader move to reduce risk supports the US Dollar as a temporary safe haven. Looking ahead, the key event will be the US jobs report for October, coming out this Friday. If the non-farm payroll numbers fall below the expected 150,000, it could slow down the Dollar’s rise. This would present the buying opportunity for the Euro that we have been anticipating. Create your live VT Markets account and start trading now.

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China’s main metals association is asking the government to limit new Copper, Zinc, and Lead smelting projects. This request comes amid rising domestic competition and low processing fees, creating overcapacity that threatens market stability. The China Nonferrous Metals Industry Association wants to restrict new Copper projects because treatment and refining charges are at record lows. If these measures are adopted, it would be the most significant market intervention in China since the aluminum production cap in 2017. The FXStreet Insights Team collects observations from market experts, sharing insights from various analysts. Their newsletter aims to provide expert insights, not just headlines. Subscribers receive daily updates and promotions by email. Relevant information includes the performance of USD/CNH, G10 currency rankings, Gold prices, and trade forecasts across different currencies and commodities. They also offer guidance for potential traders, like a list of the best Forex Brokers for 2025. FXStreet does not provide personalized recommendations or guarantee the accuracy of its information. Investing in open markets carries risks that should be evaluated carefully. Due to the metals association’s proposal, we may see a significant bullish catalyst for copper prices in the coming weeks. If Beijing officially decides to limit smelting capacity, it would directly reduce the future supply of refined metal. This news comes as spot treatment charges for copper concentrate have dropped below $10 a tonne in October 2025, indicating severe stress among smelters. The market conditions support this potential price increase. Our data shows that combined LME and SHFE copper inventories have declined by nearly 30% since mid-2025, reaching levels not seen since the post-pandemic recovery in 2022. The existing tightness in physical supply means any disruptions from China, the largest refiner globally, could greatly affect global prices. We should recall what happened in 2017 when Beijing capped aluminum production. That move triggered a strong rally, sending aluminum prices up more than 30% in the following months. Traders should use this historical event as a guide for how the market might react if copper curbs are officially announced. For those looking to invest in a potential price rise, buying call options on copper futures for the first and second quarters of 2026 seems like a smart move. This strategy allows traders to benefit from potential gains while keeping their risk defined, giving time for policy details to emerge and impact the market. This is a way to engage with the developing supply-side story. To manage premium costs, traders could use bull call spreads. This strategy would limit potential gains but significantly reduce the cost of entry, making it ideal for expressing a moderately bullish outlook while waiting for confirmation from Chinese policymakers. It’s important to keep an eye on any official announcements from Beijing’s National Development and Reform Commission (NDRC). While copper is the primary focus, we shouldn’t overlook zinc and lead. These markets are also facing overcapacity, and similar supply-side measures could lead to comparable price increases. Monitoring the term structure and options volatility in all three base metals will be crucial in the upcoming weeks.

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