Early Thursday, the markets were calm as investors waited for US housing data and the Consumer Price Index (CPI) for September, which will be released on Friday. The US Dollar showed strength against the Japanese Yen, rising 1.27% for the week, but it faced declines against the Canadian and Australian Dollars.
Reports indicated that the US is considering limiting certain software exports to China, possibly working with G-7 allies, amidst ongoing rare earth export restrictions. US stock futures displayed mixed results, while the US Dollar Index managed slight gains around 99.00.
Currency Movements
The EUR/USD pair gained a bit after a three-day drop, though it struggled to find direction near 1.1600. The GBP/USD saw a slight rebound after softer UK inflation data, stabilizing around 1.3350. Gold prices fluctuated above $4,100 as the market remained cautious following recent losses. The USD/JPY pair held its upward trend, reaching a 10-day high near 152.50 on Thursday.
The US-China trade war continues to impact the global economy, disrupting supply chains and possibly affecting the Consumer Price Index. Tensions increased with Donald Trump’s return to the presidency, leading to planned tariffs that heighten economic conflict.
Currently, markets are quiet as we wait for tomorrow’s US CPI data. Inflation has been hard to manage over the past year, with the August 2025 report showing a persistent 4.1% annual rate. If the CPI number is higher than expected, the US Dollar could spike, so traders should be ready for significant market swings and consider using options to secure their positions.
Market Strategy
The US Dollar’s strength is particularly evident against the Japanese Yen, with USD/JPY trading above 152.50. This consistent upward trend highlights the widening policy gap between the Federal Reserve and the Bank of Japan, which has been noticeable since 2023. We recommend maintaining long positions on USD/JPY, possibly through call options or futures, especially as we approach the CPI release.
The renewed trade war with China is the primary source of market anxiety, particularly following the 60% tariffs applied in January 2025. Gold trading above $4,100 suggests that traders are factoring in considerable risk, especially with fears of new US software export restrictions. The upcoming meeting between Presidents Trump and Xi is a significant risk event, making options on gold or equity indices a wise hedge against adverse outcomes.
In contrast to the dollar, the Euro and Pound show little movement. The EUR/USD is hovering around 1.1600, while recent soft inflation data in the UK keeps the GBP/USD steady at 1.3350. For now, these currencies take a back seat to the larger issues of US inflation and the trade tensions with China, making them less appealing for large directional trades.
Create your live VT Markets account and start trading now.
Turkey’s consumer confidence index has slightly decreased, falling from 83.9 in September to 83.6 in October. This small drop highlights the ongoing economic uncertainties in the region.
In currency movements, the USD/CAD is stable near 1.40, while the USD/JPY has risen above 152.50 due to speculation about Japan’s economic stimulus. At the same time, gold prices have increased, driven by demand for safe-haven assets amid concerns over a US government shutdown and trade tensions.
Forex Market Trends
In the Forex market, the EUR/USD pair is stabilizing near lows, with market activity remaining quiet. The AUD/USD is expected to trade between 0.6445 and 0.6555, according to the UOB Group.
A notable development in financial products is T. Rowe Price’s application for an actively managed cryptocurrency ETF, despite regulatory delays. This indicates a growing interest in actively managing cryptocurrency assets, reflecting changes in the financial landscape.
Looking ahead to the brokerage scene for 2025, various articles provide insights into the top brokers for currency trading, emphasizing low spreads, high leverage, and regulated options. There is a focus on offerings for regions like MENA and Latin America, as well as Islamic account options.
US Dollar Strength
The US Dollar continues to show broad strength, and this trend is likely to persist in the coming weeks. The ongoing US government shutdown, which is now in its third week, along with renewed trade tensions, is leading investors to seek the safety of the dollar. The latest US CPI data from October 15, 2025, which came in unexpectedly high at 3.9%, supports the case for a more aggressive Federal Reserve, likely boosting the dollar further.
The rise in USD/JPY beyond 152.50 is especially noteworthy, driven by speculation of increased stimulus from Japan’s new government. Traders remember the Bank of Japan’s heavy intervention around the 152 level in 2024, so market participants are now testing their limits. This scenario makes long USD/JPY positions, possibly using call options to minimize risk, an appealing strategy.
Other major currencies are weakening against the dollar. The EUR/USD is lingering near a low of 1.1600, and the GBP/USD is struggling around 1.3350, suggesting a downward trend for these pairs. This presents opportunities to sell euro or sterling futures as the dollar’s safe-haven appeal takes precedence.
Gold is benefiting from the current risk-off sentiment, trading near $2,450 an ounce, a level not reached since the geopolitical tensions of mid-2024. As long as the US government shutdown and trade disputes continue, buying call options on gold could offer upside potential while limiting possible losses.
The small decline in Turkish consumer confidence points to fragility in emerging markets, as Turkey’s inflation rate remains high, with a year-over-year rate of 65% reported in September 2025. In this risk-averse environment, this weakness makes shorting the Turkish Lira against the US Dollar an attractive trade.
Create your live VT Markets account and start trading now.
NZD/USD stays steady around 0.5735 as traders look ahead to US inflation data and US-China trade discussions. The White House is considering limiting software exports to China in response to recent restrictions from Beijing on rare earth materials.
US-China trade talks cover various issues, including agricultural purchases and nuclear limitations. Tensions between these two economic powers could influence the Kiwi, given New Zealand’s strong trade relationships with China.
US Government Shutdown Update
The US government shutdown has now lasted 23 days, making it the second longest in history. A vote on a funding bill in the Senate is expected, but it’s unlikely to resolve the deadlock.
This delay in releasing US economic data complicates the Federal Reserve’s choices. However, a 25 basis point interest rate cut is anticipated in both October and December, which puts downward pressure on the USD.
The New Zealand Dollar (NZD) is affected by the overall health of its economy and central bank policies, both of which are influenced by China’s economy. Dairy prices also play a significant role since dairy is New Zealand’s main export.
The Reserve Bank of New Zealand adjusts interest rates based on inflation, which directly affects the value of the NZD. Strong economic data can lead to rate increases, while weak data can cause the currency to drop.
Impact of Broader Risk Sentiment on NZD
The general risk sentiment greatly affects the NZD. It tends to strengthen during stable times and weaken during crises. Because the NZD is viewed as a commodity currency, changes in commodity prices can also impact it.
As of October 23, 2025, the NZD/USD pair is facing similar pressures as before, especially concerning US-China relations. The Kiwi acts as a barometer for market sentiment toward China, New Zealand’s largest trading partner. Negative developments in trade talks could hinder the currency’s performance.
Reflecting on late 2023, the US trade deficit with China was over $20 billion per month, indicating the deep economic ties that can lead to tensions. New US measures to limit technology or software exports could provoke a risk-off response, putting additional pressure on the NZD. This trend of trade disputes affecting the Kiwi is well-known.
The Federal Reserve’s current position is an important shift compared to past expectations of rate cuts. After aggressively raising rates in 2023 to over 5.25%, the market now anticipates a divergence in policies between the Fed and other central banks. Any indication that the Fed will maintain higher rates for an extended period could strengthen the USD and weigh down the NZD/USD pair.
On the other hand, we must consider the Reserve Bank of New Zealand (RBNZ). The RBNZ raised its Official Cash Rate to 5.50% in 2023 to combat inflation, and its future decisions will be crucial. Additionally, the dairy market has been volatile, with the Global Dairy Trade index reflecting sharp declines followed by slight recoveries, reminding us of the NZD’s sensitivity to its primary exports.
Given these factors, traders in derivatives should think about strategies that can benefit from volatility. With major trade negotiations and central bank decisions creating uncertainty, purchasing NZD/USD put options may be a safe way to hedge against sudden drops from escalating US-China tensions. This approach helps protect against losses while still allowing for potential gains.
Alternatively, if uncertain about the direction but anticipating a significant price movement, traders might consider a long strangle or straddle strategy. This involves buying both a call and a put option, which would allow for profits whether the pair rises sharply or falls in the coming weeks. Such strategies are ideal in markets that are waiting for key data or political outcomes that could dramatically shift sentiment.
Create your live VT Markets account and start trading now.
The Australian Dollar is bouncing back as hope grows for a US-China trade deal, even though it’s facing challenges from possible rate cuts by the Reserve Bank of Australia (RBA). The AUD/USD pair is having a tough time due to cautious trading, with all eyes on upcoming US inflation data and a period of data silence.
The AUD is getting a boost from President Trump’s positive remarks about striking deals with China during his talks with Xi Jinping in South Korea. However, the AUD/USD pair is also dealing with expectations of a 25-basis-point rate cut from the RBA, following employment data that revealed a rise in the unemployment rate, increasing the odds of rate cuts to 70%. Traders are keeping an eye on key economic reports, including PMI readings and Q3 CPI figures.
Trade Agreements Offer Support
The AUD is supported by a new trade deal between the US and Australia, which includes an $8.5 billion agreement on critical minerals. The US Dollar Index is climbing near 99.00, thanks to optimism about deals between Trump and Xi Jinping. However, the ongoing US government shutdown, now in its fourth week, is delaying important data releases, causing uncertainty in the market.
A poll suggests that the Fed may cut interest rates by 25 basis points by the end of October, with strong market expectations for more cuts in December. Meanwhile, the People’s Bank of China has decided to keep its loan prime rates steady and maintain stable GDP growth, providing a stable environment. The AUD/USD faces technical resistance around 0.6500, and further gains will need to break through bearish momentum.
The Australian Dollar is showing various percentage changes against major currencies, being particularly robust against the Japanese Yen. Key influences on the AUD include RBA interest rates, global market sentiment, and economic conditions in China, which is Australia’s largest trading partner. The price of Iron Ore and the country’s trade balance are also crucial to the currency’s value.
With the Federal Reserve almost certain to cut rates by 25 basis points next week, we’re now focused on forward guidance. The recent rise in US jobless claims to 225,000 and the ISM Manufacturing PMI staying below 50 for the fourth consecutive month reinforce the view that the Fed needs to act. This widespread expectation of easing from the US central bank is holding back the strength of the US Dollar.
Australian Economic Outlook
In Australia, the case for a near-term RBA rate cut is gaining momentum. The recent rise in the unemployment rate was confirmed by yesterday’s Q3 CPI data, which came in at 2.8%, below the RBA’s target range and lower than forecasts. The likelihood of a November rate cut now exceeds 85%, which could put more pressure on the Australian Dollar.
China’s slowing GDP growth, now at 4.8% annually, is affecting sentiment about Australia. This slowdown is evident in key commodity prices, as iron ore futures have dropped to around $105 per tonne, down from earlier highs this year. This impacts the AUD, as China is Australia’s biggest trading partner and the largest buyer of its exports.
Despite these economic challenges, some positive news on the trade front is offering brief support for the AUD. There is ongoing optimism about the US-China discussions and a concrete US-Australia critical minerals deal that is currently lending support to the currency. This makes it harder for the AUD to take a sharp fall until we get clear results from these talks.
For traders dealing in AUD/USD derivatives, the current bearish trend suggests it may be wise to sell into any strength in the coming weeks. The area around the 0.6500 psychological level, which aligns with the nine-day moving average, is a key resistance point to consider for short positions. Our downside targets remain near the 0.6400 support level.
Given the mixed signals between negative economic data and positive trade sentiment, we anticipate increased volatility. Options traders might want to explore strategies that profit from price volatility, like buying straddles ahead of next week’s Australian CPI data or the Fed’s interest rate decisions. This approach enables us to capitalize on significant market moves in either direction.
Unlike the market anxiety seen during previous US government shutdowns, our current focus is on monetary policy. Delays in data releases are a lesser concern compared to the interest rate paths set by the Fed and RBA. Therefore, political noise from Washington should be less of a priority.
Since the AUD is showing strength against the Japanese Yen, we may consider a different trading strategy if risk appetite improves. If the US-China discussions deliver a positive surprise, taking a long position on AUD/JPY could yield better returns than trading AUD/USD. This is because the yen usually weakens during a “risk-on” environment, further boosting the Australian Dollar.
Create your live VT Markets account and start trading now.
Veris Residential (VRE) reported $73.44 million in revenue for Q3 2025, a 7.7% increase from last year. The earnings per share (EPS) stood at $0.20, improving from -$0.10 a year ago.
The revenue was below the Zacks Consensus Estimate of $74.99 million, missing by 2.06%. However, the EPS beat expectations, surprising analysts by 33.33% (the consensus was $0.15).
Key Metrics Influences
Key metrics help us understand a company’s financial health. They are compared to past figures and analyst predictions, influencing stock price expectations.
Veris generated $1.4 million from other income, just shy of the estimate of $1.44 million, but showing an 11.8% year-over-year increase. Management fees revenue was $0.52 million, below the $0.75 million estimate, marking a 34.1% decline compared to last year.
For further investment insights, Zacks Investment Research offers tools and recommendations, including their guide on the “7 Best Stocks for the Next 30 Days.” Their goal is to help both individuals and institutions make informed investment choices.
These results reveal a common situation: a strong EPS beat alongside a revenue miss. This kind of divergence can create uncertainty, which may increase the stock’s implied volatility. Derivative traders should prepare for larger price swings as the market decides which metric matters most for Veris’s future.
The revenue miss is worrying and reflects broader economic trends in 2025. Recent reports indicate that national multi-family vacancy rates have risen to 6.6%, and rental growth in the Northeast has eased from the highs of 2023. This suggests that while Veris is growing annually, it is not meeting analyst expectations in a slowing rental market.
Potential Trading Strategies
The strong EPS surprise might seem positive but could stem from aggressive cost-cutting rather than genuine business strength. The 34.1% year-over-year drop in management fees raises concerns about weakness in that operational area. This detail may negatively impact the stock after the initial excitement over the EPS beat diminishes.
For traders anticipating volatility without a clear direction, buying a straddle (both a call and a put option with the same strike price and expiration date) could be a smart move. This strategy profits from significant price movement in either direction over the coming weeks, making it suitable given the mixed signals from the earnings report.
However, the underlying weakness in revenue and management fees leans towards a bearish position. Buying put options or creating bear call spreads may allow traders to profit from a potential downward correction. Typically, strong top-line growth sustains a stock’s long-term performance, and that appears to be slowing now.
The broader economic environment also suggests caution. The Federal Reserve’s policy continues to challenge the real estate sector. While the rate-hike cycle paused earlier in 2025, borrowing costs remain high compared to historical averages, impacting REIT valuations. This combined pressure, together with company-specific revenue issues, makes bullish bets riskier at this time.
Create your live VT Markets account and start trading now.
Beyond Meat, a company that sells plant-based meat alternatives, saw its stock price jump nearly 1,200% this week. It reached about $8.70 per share, up from just 67 cents last Friday. This big increase was mainly due to a short squeeze. However, by Wednesday afternoon, the stock price had dropped to around $3.35 per share, which still represents a 400% rise for the week.
The recent changes in the stock resemble a meme stock rally caused by a short squeeze. Last week, Beyond Meat hit a low of 55 cents per share after announcing debt restructuring. Shareholder dilution and analyst downgrades led many investors to short the stock. The rally began when Beyond Meat expanded its distribution with Walmart and got added to the Roundhill MEME Stock ETF, pushing the share price up quickly.
Beyond Meat has struggled to make a profit. In the second quarter, its revenue was $75 million, a 20% drop from last year, along with a net loss of $29 million. The stock’s wild price swings have made investors cautious, as they await more clarity from the upcoming Q3 earnings report.
We are witnessing a typical short squeeze with Beyond Meat, driven by its inclusion in a meme stock ETF and the new deal with Walmart. Even though the stock jumped 1,200% this week before declining, implied volatility for its options is now extremely high. This makes it costly to buy calls or puts since the premiums reflect significant uncertainty.
Given this situation, traders are more likely to try selling this inflated volatility instead of buying it. Strategies like selling covered calls against existing shares or using bear call spreads might be appealing for betting that the stock won’t hit its recent highs again. This allows for potential profits from the expected decrease in both time and volatility as the excitement dwindles.
The company’s fundamentals suggest a cautious approach, as it remains unprofitable with revenues down 20% in the second quarter. Historically, short interest in Beyond Meat has been very high, with over 40% of its free float sold short earlier this year. This significant betting against the company contributed to the squeeze but also underscores ongoing business challenges.
One important date to note is the earnings release on November 4th, which is now less than two weeks away. We can expect continued volatility leading up to this event, creating an uncertain outcome for the stock price. This creates an opportunity for short-dated options plays that aim to profit from the expected post-earnings volatility drop.
Beyond Meat Stock Price Movement
AUD/JPY rose to about 98.85 during the early European session, keeping a positive outlook. The next resistance level is at 99.50, while a short-term downside target is set at 97.84.
The bullish momentum for AUD/JPY is supported by an RSI of 55.0, indicating an upward trend. If the pair breaks above 99.50, it could aim for 100.00 or even 100.40.
Bank of Japan’s Influence
Support is at 97.84, and if it drops below this, it may fall to 96.86 and 96.65. The value of the Japanese Yen is affected by the Bank of Japan’s policies and the differences between Japanese and US bonds.
Since 2013, the BoJ has maintained an ultra-loose monetary policy, impacting the Yen’s value against major currencies. Recent policy changes have provided some support to the Yen.
Over the last ten years, the gap between BoJ and US Federal Reserve policies has widened the bond differentials. The BoJ’s shift in policy for 2024 and recent rate cuts by other central banks are helping to close this gap.
The Japanese Yen is viewed as a safe-haven currency. In times of market uncertainty, it tends to strengthen due to its perceived stability.
Current Market Drivers
Previously, the bullish outlook for AUD/JPY was based on past US-China trade discussions. On October 23, 2025, the market dynamics have changed, but the upward trend remains strong. The primary driver has shifted from geopolitical hopes to clear differences in monetary policies.
For the Australian dollar, inflation remains stubborn at 3.8% for the third quarter of 2025. This has led the Reserve Bank of Australia to maintain a “higher for longer” stance, keeping the cash rate at 4.35%. This policy supports the Aussie dollar against lower-yielding currencies.
Conversely, the Bank of Japan is gradually moving away from its ultra-loose policy, which ended in 2024. Although the BoJ raised its policy rate to 0.25% in July 2025, it is still much lower than rates in other countries. This interest rate gap fuels the carry trade, where traders borrow yen to invest in higher-yielding Australian assets.
This significant interest rate difference means traders benefit from holding long AUD/JPY positions. This is reflected in the derivatives market, where demand for call options, expiring in one to three months, is strong. Buying call options lets traders profit from further increases while limiting risk to the premium paid.
We should monitor for any signs of global risk aversion, which typically strengthens the safe-haven yen. Recent worries about slowing European growth have caused some short-term volatility. Traders might consider using put options below crucial support levels to guard against sudden market downturns.
Currently, the pair is facing resistance around 103.50, a level it has tested multiple times this month. A sustained break above this could lead to the psychological level of 105.00. Key support is now at the 50-day moving average near 102.20, which must hold to keep the bullish trend intact.
Create your live VT Markets account and start trading now.
**GBP/USD Trends And Market Reactions**
The US Dollar is gaining strength from optimistic views on a potential US-China trade deal. President Trump expects to sign several agreements with China’s President Xi during their meetings in South Korea, discussing topics like US soybean exports and China’s oil transactions.
On Wednesday, GBP/USD fell to nearly 1.3300 but then slightly recovered to around 1.3350, ultimately closing lower. Traders are waiting for key UK and US economic updates expected on Friday.
Global risk appetite decreased due to concerns about possible US responses to China’s recent controls on rare earth exports. The Trump administration is exploring options such as tariffs and export controls on US software, raising worries about market effects.
During Wednesday’s North American session, GBP/USD stabilized after the UK’s latest inflation report raised expectations for more Bank of England easing. At the same time, modest US economic activity indicates investment in AI, while recent reductions in trade tensions with China have improved risk appetite.
We remember a time of serious risk aversion when disputes between the US and China, along with government shutdowns, caused GBP/USD to fall. Looking back from today, October 23, 2025, that time feels far away, especially with GBP/USD now around 1.2450. The market dynamics have shifted significantly since trading in the 1.3300s.
**UK And US Economic Outlook**
Currently, the main issue is the stubborn UK inflation rate. Despite a decline from its peak, it still stands at 3.1% according to the last quarterly report. This situation has compelled the Bank of England to keep its bank rate at 4.75%, limiting economic growth more than expected. The market is predicting a high chance of a UK recession in the first half of 2026, putting pressure on the pound.
In contrast, the United States has shown better performance, with the latest CPI data revealing inflation has dropped to 2.8%, much closer to the Federal Reserve’s target. With the Fed funds rate steady at 5.0%, the interest rate gap continues to favor US dollars. This ongoing difference makes significant gains in GBP/USD unlikely without major policy changes from either central bank.
For traders expecting continued weakness in sterling, buying GBP/USD put options is a simple strategy. A contract with a 1.2300 strike price expiring in December could offer a clear, defined risk position to profit from a potential decline. This allows speculation on further drops without the unlimited risk of directly shorting futures.
However, since the pair has been trading within a narrow range for weeks, implied volatility has decreased. The current 3-month at-the-money volatility index is near a low of 6.5%, making options more affordable. This suggests that a long straddle could effectively capitalize on any breakout, either up or down, possibly triggered by the upcoming UK autumn budget statement.
For those thinking that the current standstill between the central banks will keep the market range-bound, selling an iron condor might be a smart choice. By setting a defined range, such as between 1.2300 and 1.2600, we can earn premiums over time. This approach benefits from the absence of significant moves, which is currently frustrating for traders focused on market direction.
**Create your live VT Markets account and start trading now.**
The CME FedWatch Tool shows a 97% chance of a Fed rate cut in October and a 96% chance in December. A Reuters poll reveals that 115 out of 117 economists expect a 25 basis point reduction to between 3.75% and 4.00% on October 29. Additionally, 83 economists predict two cuts this year, while 32 anticipate just one.
The Pound Sterling has weakened after the UK’s Consumer Price Index (CPI) data for September showed a 3.8% rise, lower than the 4.0% expected. This remains above the Bank of England’s 2% target, with the core CPI at 3.5%, which fell short of the 3.7% forecast and dropped from August’s 3.6%.
We see GBP/USD fall below the 1.3350 level as market uncertainty prevails. Investors are shifting to the US Dollar due to the government shutdown and the absence of official economic data. The Pound is under pressure after weaker September inflation figures.
With US economic data on hold before the upcoming inflation report, nervousness is high, leading to potential price swings. The VIX, which measures market fear, has spiked over 25% this past month, reaching levels not seen since early 2024’s banking stresses. Traders should think about buying options for protection against sudden market moves.
Situational Analysis of GBP/USD
A Federal Reserve interest rate cut on October 29 seems nearly guaranteed, with fed funds futures indicating a 97% likelihood of a 25-basis-point reduction. Historically, similar situations have shown that initial rate cuts might not weaken the dollar if there’s significant concern about global growth. The current environment feels similar, so we shouldn’t assume a rate cut will automatically weaken the dollar.
Looking at the UK, September’s inflation of 3.8% is still above the Bank of England’s 2% target, but it’s a nice drop from the 4.5% average in the second quarter of 2025. This decrease in price pressure lessens the urgency for the BoE to raise rates, limiting any upside potential for the Pound Sterling. Traders might consider selling out-of-the-money call options on GBP/USD, betting that it won’t rise significantly in the near future.
Given the strong demand for the dollar and a cautious Bank of England, GBP/USD is likely to trend downwards in the coming weeks. Traders should explore strategies that benefit from this downward trend or at least increased volatility. This could involve buying put options on GBP/USD or establishing bearish futures positions, aiming for a move towards the 1.3200 support level last seen in July.
Create your live VT Markets account and start trading now.
Gold prices in Saudi Arabia fell on Thursday, according to FXStreet. The price per gram dropped to 493.26 Saudi Riyals (SAR) from 494.20 SAR on Wednesday. The price per tola also decreased, going from 5,764.20 SAR to 5,753.25 SAR.
Gold’s pricing in Saudi Riyals is based on international rates, and prices update daily. However, they may differ slightly from local market rates.
Gold As A Protective Asset
Gold has always been seen as a way to preserve wealth and a means of exchange. People often turn to gold during market turbulence for protection. It serves as a safeguard against inflation and currency decline.
Central banks are the biggest buyers of gold, purchasing 1,136 tonnes in 2022, worth about $70 billion. Countries like China, India, and Turkey are increasing their gold reserves.
Gold prices typically rise when the US Dollar is weak, and they tend to move in the opposite direction of US Treasuries. Factors like geopolitical events and interest rates also affect gold prices, with lower interest rates making gold more appealing.
The recent drop to SAR 493.26 per gram represents a minor dip. This should not be mistaken for a shift in the overall trend; small declines can actually provide good opportunities for new investments.
US Federal Reserve’s Next Move
Attention is turning to the US Federal Reserve, with expectations of a rate cut in the first quarter of 2026. Following a long period of high rates through 2024 and much of 2025, recent US inflation slowed to 2.8% in September. This is causing a shift towards lower rates, making gold, which doesn’t yield interest, more attractive.
This sentiment is weakening the US Dollar, which inversely affects gold prices. The Dollar Index (DXY) has dropped nearly 2% in the last month, moving from over 105 to about 103.2 today. A weaker Dollar means gold costs less for those using other currencies, usually driving demand up.
Central bank purchases continue to support gold prices, and we’ve seen this trend strengthen since the record amounts bought in 2022. According to the latest World Gold Council data, central banks have added another 850 tonnes to their reserves in 2025, primarily from emerging markets. This consistent institutional demand helps maintain a solid price floor.
Additionally, recent economic indicators suggest a slowdown, making gold an appealing safe-haven asset. The latest US Non-Farm Payrolls report was weaker than expected, and manufacturing PMI has been below the 50-point mark for two months, indicating contraction. This uncertainty encourages diversifying away from riskier assets like stocks.
Considering these factors, we should prepare for potential price increases in the coming months. Derivatives traders might look to buy call options that expire in March and April 2026 to take advantage of likely rate cuts. Another strategy could be selling out-of-the-money put spreads to benefit from the expected price stability and potential gains.
Create your live VT Markets account and start trading now.
