The British Pound has risen to its highest level in six months against the US Dollar, currently trading around 1.3739. This rise is mainly due to ongoing selling pressure on the Dollar, partly driven by renewed tariff threats from President Trump. President Trump plans to increase tariffs on South Korean imports and is considering tariffs on Canadian goods, which has added to the Dollar’s struggles. The US Dollar Index is close to a four-month low at 96.61 as confidence in US policies wavers.

Concerns of Government Shutdown

The possibility of a US government shutdown is also affecting the Dollar. Lawmakers have a funding deadline, and disagreements over spending could potentially lead to a shutdown. Market watchers are focused on the Federal Reserve’s upcoming interest rate decision, which is expected to remain steady in the 3.50%-3.75% range. Comments from Chair Jerome Powell will be closely examined for clues about future policies, as different tones may impact the Dollar’s direction. In the UK, data indicates that the Bank of England might not rush to lower rates, which is supportive of the Pound. A Reuters poll suggests that the BoE will likely keep the Bank Rate steady through February, with mixed opinions on potential rate cuts by the end of March. The Federal Reserve manages interest rates to ensure price stability and full employment. In times of crisis, it may employ Quantitative Easing to stimulate the economy, often weakening the Dollar. Conversely, Quantitative Tightening usually strengthens the Dollar.

Historical and Current Dollar Trends

Looking back to this time in 2025, the US Dollar faced significant pressure due to political uncertainty and trade threats, pushing GBP/USD to highs around 1.37. Now, the situation has flipped, with the pair trading near 1.2250 as the US Dollar Index has surged from the 96.60s to over 104. This change is largely due to a clear difference in monetary policy between the central banks that began in mid-2025. At the start of 2025, market expectations were that the Federal Reserve would hold rates around 3.75%, amid concerns over political issues. However, persistent inflation forced the Fed to adopt a more aggressive rate-hiking strategy in the latter half of the year, raising the Fed Funds Rate to its current 4.50-4.75% range. Recent US inflation data from December 2025 shows a rate of 2.8%, which, despite decreasing from its peak, remains high enough to prevent the Fed from indicating a shift to rate cuts. On the other hand, the Bank of England’s patience waned as UK economic growth stalled in late 2025, worsened by ongoing tensions over post-Brexit trade regulations. While there was discussion on when the BoE would cut rates, they ultimately made two cuts in the fourth quarter of 2025. This created a significant yield advantage for the Dollar, attracting investments and putting more pressure on the Pound. Given this steady downtrend, traders might look for strategies that capitalize on further GBP/USD weakness or a range-bound market. Buying put options with strike prices below 1.2200 could be a simple way to profit if the Dollar continues to strengthen. For those who think the downward trend might slow, selling out-of-the-money call options is a way to earn premium, betting that significant rallies are unlikely. The political turmoil of early 2025 led to high implied volatility, making options more expensive, but that has since settled down. With lower volatility now, it’s more affordable to position for potential price movements around key economic data releases, like the upcoming US Non-Farm Payrolls report. Buying long straddles or strangles could be an effective strategy to benefit from a larger-than-expected move in either direction if the jobs data surprises the market. Create your live VT Markets account and start trading now.

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West Texas Intermediate (WTI) US Oil has seen a slight dip but remains steady due to temporary production issues in the U.S. The effects of a winter storm are lessening, but full supply restoration is still pending. Ongoing tensions in the Middle East keep a risk premium in the market, with WTI priced at $60.50—a 0.25% drop from the previous day.

Impact Of Winter Storm On Production

U.S. producers experienced production losses of up to two million barrels per day over the weekend because of the storm. The Permian Basin alone saw a drop of 1.5 million barrels per day, but this loss has now decreased to 700,000 barrels per day, with full recovery expected by the end of the month. Market attention remains on geopolitical risks, especially the rising tensions between the U.S. and Iran. Kazakhstan is slowly restoring production at the Tengiz Oil field. This, along with ongoing supply issues, creates a complicated outlook for WTI prices. The American Petroleum Institute’s upcoming report on U.S. oil stocks may offer more insights into supply and demand trends. WTI Oil is a key benchmark in global markets, known for its high quality as a light, sweet crude oil. Its price is affected by global demand, geopolitical events, and the U.S. dollar. Weekly inventory reports from the API and EIA strongly influence prices by reflecting supply and demand shifts. OPEC’s production choices also significantly impact price movements. Currently, WTI oil is hovering around $60.50, influenced by two opposing forces. The market is balancing the temporary recovery of U.S. supply against ongoing conflict risks in the Middle East. This tug-of-war causes uncertainty in the short term.

US Production Levels And Inventory Reports

The impact of the winter storm on U.S. production is fading quicker than expected, with production from the Permian Basin increasing again. It’s important to note that U.S. production hit a record high of over 13.3 million barrels per day in late 2025, a number that continues to weigh on the market. This strong supply suggests that any price spikes from temporary outages are likely to be brief. Last week’s Energy Information Administration (EIA) report indicated a surprising inventory increase of 1.2 million barrels, suggesting that demand might be weaker than expected for this time of year. This information supports a bearish outlook, indicating that ample supply is available in the U.S. Traders should closely monitor this week’s API and EIA reports for confirmation of this trend. At the same time, the geopolitical risk premium is significant, providing a safety net for prices. Tensions involving Iran and shipping disruptions throughout 2025 have shown how quickly supply chains can be affected. Any escalation could instantly add several dollars to the price of a barrel. We must also consider OPEC+, which decided in the fourth quarter of 2025 to extend its voluntary production cuts into the new year. This coordinated effort aims to keep global supply tight and prevent prices from falling too low. The continued support from major producers counterbalances the increase in non-OPEC output. Given these conflicting signals, we expect a period of increased volatility, likely keeping prices within a specific range. This environment may offer opportunities for options traders who can benefit from price fluctuations without betting on a single direction. Strategies like iron condors might be worth considering for those who believe prices will remain stable. Create your live VT Markets account and start trading now.

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Cameco is a Canadian uranium producer based in Saskatoon. It runs some of the best and most cost-effective uranium mines in the world. The company also plays an important role in the nuclear fuel cycle, involving refining, conversion, and fuel manufacturing. According to Elliott Wave analysis, wave (II) of the Super Cycle finished at $5.17. After that, wave (III) surged upward. Wave I peaked at $62.55, while wave II dropped to $35. Then, the stock rose again: wave ((1)) hit $110.16, and wave ((2)) retreated to $77.70. The forecast indicates more growth if prices stay above $5.17, with projected support in a 3-, 7-, or 11-swing pattern. On the daily chart, wave II concluded at $35.72, marking the start of wave III’s upward movement. This sequence is organized as a five-wave impulse. During this, wave ((1)) reached $110.16, and wave ((2)) pulled back to $77.70. If the $35.72 level holds, we can expect short-term support in a 3-, 7-, or 11-swing pattern, which favors further upward movement. We’re observing a strong impulsive structure in Cameco. This suggests that recent weakness is just a corrective pullback, not a trend reversal. A dip to the $77.70 support level is an opportunity to enter bullish positions. The overall trend indicates that significant upward potential is developing in the coming weeks. This technical strength aligns with strong fundamentals. The uranium spot price has recently surpassed $145 per pound, driven by ongoing supply shortfalls. In 2025, multiple countries committed to expanding their nuclear fleets, highlighting long-term demand. This situation is very favorable for a leading producer like Cameco. Given this outlook, selling out-of-the-money put credit spreads could be a smart strategy in the upcoming weeks. With the recent low of $77.70 as a reference, traders might think about selling puts with strike prices between $70 and $75. This approach allows us to earn premiums while managing risk, based on the belief that support will hold. For those wanting more direct exposure to the upside, buying call options is a straightforward option. However, implied volatility has been high. A more cost-effective strategy might be to use bull call debit spreads, which can help reduce premium costs. This strategy prepares traders for the next upward movement towards and possibly beyond the previous high of $110.16. The current situation is similar to the significant advances seen during the 2005-2007 cycle, where pullbacks were short-lived before the main trend resumed. While we’re focused on the $77.70 pivot now, we’ll need to reassess all bullish scenarios if the stock falls below the critical support level of $35.72. That price point acts as our key defense for the entire structure.

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Stability of the Norwegian Krone

Commerzbank reports that the Norwegian Krone (NOK) is stable and showing a slight upward trend. This stability comes from high inflation and a positive economic outlook for Norway. Norges Bank plans to cut interest rates only once a year. Norges Bank might lower the policy rate further if the economy goes as expected. However, with inflation still high, there’s no hurry to make additional cuts. The NOK is likely to appreciate gradually because of these positive factors, though rate changes could occur if economic uncertainties arise. Overall, the Krone is expected to rise slightly against the euro in the next few quarters. Stable economic conditions and strong public finances support the NOK, even amidst geopolitical uncertainties. This analysis combines insights from various analysts, with the help of Artificial Intelligence for content and review. We believe the Norwegian Krone will remain stable, with a gentle upward trend. Norges Bank is cautious, planning very few interest rate cuts due to ongoing inflation concerns. This approach should help the currency stay strong in the short term.

Trading Strategies

Recent data from late 2025 shows Norway’s core inflation at 3.1%, which is well above the central bank’s 2% target. This is why Norges Bank has kept its policy rate at 4.50%, unlike the European Central Bank, which started cutting rates last year. This difference in rates makes holding the Krone more appealing. Given the expected slow, steady appreciation, selling out-of-the-money calls on the EUR/NOK pair could be a wise strategy. This method benefits from time decay and the low volatility we expect for the Krone, taking advantage of the anticipated decline in the EUR/NOK exchange rate. Looking back at 2025, we saw the NOK strengthen whenever oil prices increased, even as the Eurozone faced economic challenges. Therefore, using bull put spreads on the NOK may also be effective, as it limits risk in case of sudden geopolitical changes. This strategy profits if the Krone remains stable or appreciates moderately as expected. In the coming weeks, traders should pay attention to the Norges Bank meeting minutes to confirm this cautious strategy. The strong state of Norway’s finances, supported by high energy revenues throughout 2025, provides a solid foundation for the currency, reducing the downside risk for NOK-long positions. Create your live VT Markets account and start trading now.

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Costco Wholesale Corporation runs membership warehouses in the US and around the world, offering a wide range of both branded and private-label products. The company is part of the Consumer Defensive sector and trades on Nasdaq under the ticker “COST”. It also runs e-commerce sites in various countries, including the US, Canada, and the UK. Since May 2022, Costco’s stock has been following a bullish pattern, known as a nested impulse Elliott Wave. It found support in December 2025, with expectations of an upward trend in the first wave of a larger series, potentially exceeding the high from February 2025. The stock reached $612.27 in April 2022 in the first wave ((I)) and $1078.23 in February 2025 for wave (I) of ((III)), with a correction dropping to $844.06 for wave (II). We expect to see an upward movement in the first wave of ((1)) of I of (III). If the stock rallies more than 50% from its recent low, it suggests that buyers can enter risk-free long positions. Future price movements will indicate whether the stock exceeds February 2025’s high, with targets above $1515. If the price falls below the February 2025 peak, it may indicate a corrective phase, especially if it drops under $844.06. The chart shows that Costco likely hit a significant low of around $844 back in December 2025, and we may now be in the early part of a new upward trend. This view is backed by solid fundamentals, as recent holiday sales for that December demonstrated a 7.5% rise in same-store sales, surpassing expectations. This indicates that consumer demand for Costco’s value-oriented approach is strong. For derivative traders, there’s an opportunity to plan for a rally by buying call options. With the stock remaining above December 2025’s low, purchasing calls set to expire in April or May 2026 could allow traders to seize the expected higher movement. This strategy provides leveraged upside potential while clearly defining the maximum risk to the premium paid. A crucial level to monitor is the February 2025 peak of $1078.23. A sustained move above this level would strongly confirm the beginning of a larger upward wave. In a bullish scenario, the long-term price target is set above $1515, indicating substantial potential gains. However, it’s important to be aware of risks, especially since the latest CPI report for December 2025 showed inflation rising to 3.8%, which has brought some uncertainty to the broader market. The key support level remains the December low of $844.06. If the stock price falls below this mark, it could undermine the bullish outlook and may trigger the use of put options to hedge against a larger downturn. We’ve seen similar price movements before. After a major drop in 2022, the stock surged over 150% into its 2025 high, highlighting its ability for strong trend changes. Therefore, traders should keep an eye on the implied volatility of options. Low volatility could indicate a good time to enter bullish trades ahead of the next potential surge.

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Elliott Wave Theory shows that market trends move in five impulsive waves and three corrective waves. We can improve our trading strategies by including high-frequency trading methods to find better entry points. By studying market cycles across different assets, we can pinpoint a “middle group” that aligns with the current cycle, which can help with trades, such as those involving Delta Air Lines (DAL). Wave patterns map out market phases. In upward trends, these sequences finish in 5, 9, or 13 swings, while corrective phases end after 3, 7, or 11 swings. If a sequence is incomplete, it may indicate more price movement in the same direction. This idea is important for evaluating Delta Air Lines, particularly when buying during corrective phases characterized by these wave patterns. Since April 2025, Delta’s price has reached new highs in three waves, hinting that it may continue to five waves. Our risk management system uses pivots to spot possible market traps. Delta Air Lines is currently in an incomplete seven-swing corrective sequence. From this, we see a good buying zone between $65.37 and $61.37, offering a strong chance for a trend resurgence. Last year, we pinpointed a high-probability buying zone for Delta Air Lines between $65.37 and $61.37. This was based on an incomplete seven-swing corrective structure after the highs of 2025. We expected the main upward trend to restart from this price range. Looking back, the market did provide an entry point in that blue box area during the third quarter of 2025, before the following price rise began. This rally confirmed the wave structure, supporting the idea that the movement from the April 2025 low was part of a bigger impulsive trend. This trend has solid backing from strong fundamentals, as recent IATA reports from late 2025 showed that global passenger traffic rose 5% above pre-pandemic levels. Now that Delta is trading near $82, the chance to buy on dips has passed, and traders should rethink their strategies. With Delta’s strong earnings report for the fourth quarter of 2025—where it surpassed revenue expectations by 4% and boosted its 2026 outlook—implied volatility in options has likely fallen. This makes protective measures, such as buying put options to hedge long stock holdings, more affordable. For those wanting to start new positions, selling cash-secured puts below the current market price, perhaps around the $75 level, could be a wise move. This strategy lets a trader earn premium if the stock stays strong or buy shares at a better price during a minor pullback. This fits with the belief that the larger five-wave upward sequence is still incomplete. The broader economic environment remains favorable. WTI crude oil prices have stabilized around $85 per barrel throughout winter. We are now looking for the next corrective pullback to identify potential buying areas. Traders should watch swing counts closely, as any three-wave drop could indicate the next entry point for continuing the primary trend.

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The EUR/USD has risen sharply above 1.1920, driven by trade tensions and political instability, which are hurting the US Dollar. Tariffs on South Korea, concerns about a US government shutdown, and expectations that the Federal Reserve may cut rates further are all weakening the US Dollar. The Euro has bounced back to challenge its September 2025 highs around 1.1920, supported by positive market outlooks. Meanwhile, ongoing trade issues and immigration tensions in the US are raising fears of a potential government shutdown.

Impact of Tariffs and US Politics

The increase in tariffs on South Korea to 25% could strain US international trade, but Asian markets remain stable. Tensions in Congress over a funding bill could trigger a government shutdown, putting more pressure on the US Dollar. In economic news, US Durable Goods Orders increased by an impressive 5.3% in November. However, all eyes are now on US Consumer Confidence and the Federal Reserve’s upcoming policy decision. EUR/USD bulls are testing the resistance at 1.1920, with technical indicators showing positive momentum. If the price breaks above this level, attention may shift to 1.2000, while support is projected at 1.1830 in case of a downturn. Consumer confidence is crucial for the US economy, reflecting people’s willingness to spend. Additionally, Christine Lagarde, head of the ECB, is set to speak soon, which could influence the Euro’s direction.

Market Strategy and Upcoming Events

As the EUR/USD approaches the 1.1920 resistance, a level not seen since September 2025, the market faces a critical moment. The Euro’s strength largely stems from the US dollar’s weakness, driven by trade tariff uncertainties and the growing risk of a government shutdown. Traders should brace for increased volatility around this key technical level in the coming days. For those expecting a breakout above 1.1920, purchasing call options with a 1.2000 strike price for late February may capitalize on the uptrend. Implied volatility for one-month EUR/USD options is now at 7.5%, indicating the market anticipates a significant move. This is still low compared to the 9% seen during 2025’s political uncertainties, suggesting that buying options could be a smart and cost-effective strategy. On the flip side, if you view the 1.1920 level as a solid ceiling, then considering bearish strategies, like buying puts, could be wise, especially if the price struggles to stay above this level. A vital signal would be a drop below the 1.1830 support level, indicating that the recent rally may have peaked. It’s important to remember the sharp rejection from this same area last autumn, which led to a swift decline. The main focus this week is the Fed’s policy meeting and the political deadlock in Washington. History shows that shutdowns, like the one lasting 35 days in late 2018 and early 2019, can harm dollar sentiment for extended periods. Today’s Consumer Confidence number disappointed at 109.2, well below the expected 114.5, confirming that public sentiment is declining. Upcoming speeches from ECB President Lagarde may also act as significant market movers. Any indications of a more aggressive stance from the European Central Bank could help the Euro break through resistance. Given the busy upcoming calendar, traders unsure of the direction but anticipating a price swing might consider strategies like long straddles to take advantage of rising event risk. Create your live VT Markets account and start trading now.

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**Gold Prices Remain Steady Despite Dollar Weakness** Trade tensions are rising after President Trump made claims against South Korea. Cryptocurrency Ripple is also under pressure, trading around $1.88. Best brokers for forex and other markets in 2026 are highlighted, providing insights on costs and exposure. There are inherent market risks, so thorough research is essential before making transactions. **Market Trends and Currency Strategies** The weakness of the US Dollar, which began in late 2025, has continued into the new year due to ongoing tariff uncertainty. Recently, the US Non-Farm Payrolls report showed job growth slowed to just 115,000 in early January, adding to the bearish sentiment around the dollar. Traders might consider put options on the Dollar Index (DXY) to protect against further declines ahead of the upcoming Federal Reserve meeting. This environment is pushing pairs like EUR/USD and GBP/USD higher. The Euro is testing the 1.2000 level for the first time since mid-2021. The market is pricing in a continued difference between a dovish Fed and a more stable European Central Bank. We recommend buying call options on these pairs for potential upside while managing risk if the dollar suddenly rebounds. Mexico’s trade balance worsened in December 2025, with a dip to $-0.86 billion signaling possible challenges for the Peso. This situation recalls early 2022 when emerging market currencies faced difficulties amid global economic uncertainty. While the weak dollar complicates a straightforward long USD/MXN trade, shorting the Peso against stronger currencies like the Australian Dollar may be a smart strategy. Gold continues to benefit from a weak dollar and geopolitical tensions, staying above the $5,000 per ounce mark. Central bank purchases are increasing, with the World Gold Council reporting a 12% rise in official sector buying in the fourth quarter of 2025 compared to the previous year. We see continued value in long-dated futures contracts to take advantage of this trend. The Canadian Dollar’s strength has pushed USD/CAD to lows not seen since last year. This is largely supported by energy prices, with WTI crude rising over 8% since the start of 2026, trading above $92 per barrel. A sustained drop below the key support level could lead to more technical selling in this pair. The Australian Dollar is also enjoying a strong performance, having reached a three-year peak in late 2025. Australia’s latest CPI data shows inflation steady at 3.4%, above the central bank’s target, suggesting the RBA will be among the last major banks to cut rates. This fundamental situation supports strategies using call options on AUD/USD. **Create your live VT Markets account and start trading now. **

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Mexico’s trade balance for December was a surplus of $2.43 billion, exceeding the expected $1.64 billion. This means Mexico exported more than it imported during this time. This positive trade balance indicates strong trade performance, which can help boost economic growth. Factors like global demand for Mexican products and favorable exchange rates likely played a role in the rise in export figures.

Economic Recovery and Stability

As the economy rebounds from the pandemic, trade surpluses could protect Mexico from external economic shocks, paving the way for a stable economic outlook until 2026. Market analysts are closely watching future trade developments and their impacts on Mexico’s economy, especially amid global trade tensions and shifting economic policies. FXStreet will provide further updates and analyses on this issue. As of January 27, 2026, the unexpectedly strong trade surplus from December 2025 is a positive signal for the Mexican Peso (MXN). The $2.43 billion surplus points to economic strength that the market may not yet fully recognize. This momentum encourages a re-assessment of any short positions on the peso. This report reflects the overall trend seen throughout 2025, where the “nearshoring” effect significantly boosted Mexican manufacturing and exports. Tracking foreign direct investment shows that in the first three quarters of 2025, figures exceeded $30 billion, mainly directed toward expanding industrial capacity. This ongoing success builds on a solid base, including a nearly $12 billion trade surplus in 2023.

Investment and Market Strategies

In the upcoming weeks, it might be wise to buy put options on the USD/MXN currency pair to benefit from a strengthening peso. Current strength may push the exchange rate below the critical 16.80 support level, potentially challenging the 16.50 lows from last autumn. Implied volatility may increase ahead of the inflation data release, making options a good way to manage risk. This strong trade report also provides Mexico’s central bank, Banxico, with reasons to maintain a firm monetary policy. High interest rates, which have contributed to the peso’s strength in 2025, are less likely to decrease sharply if the economy continues to perform well. This creates a policy divergence with the U.S. Federal Reserve, supporting a stronger MXN. We will be monitoring the upcoming manufacturing PMI and inflation reports for January 2026 closely to confirm this trend. If those figures also show strength, it would strengthen the case for a stronger peso in the first quarter. Any short-term dip in the MXN could be seen as a buying opportunity. Create your live VT Markets account and start trading now.

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Brazil’s inflation rate for January was 0.2%, slightly below the expected 0.22%. This suggests that consumer prices are rising at a slower pace. The AUD/USD has hit a three-year high, boosted by rising Australian yields and a weaker US dollar. In contrast, the USD/CAD dropped to a six-month low as investors await important decisions from the Fed and the Bank of Canada.

Gold And Bitcoin Trends

Gold is holding strong near $5,100 per troy ounce, thanks to ongoing struggles of the US dollar, trade worries, and geopolitical issues. Bitcoin has stabilized around $88,000 after a 2% increase, influenced by a winter storm impacting its hashrate. EUR/USD remains steady above 1.1900 due to lower demand for the US dollar and changes in market sentiment. Similarly, GBP/USD has risen to multi-month highs around 1.3750 as reports emerged about rising trade tensions under President Trump. Additionally, the Axie Infinity gaming token jumped 3%, benefiting from increased demand following the bAXS token announcement. Trade tensions with South Korea, sparked by President Trump, are adding to market dynamics as focus shifts to central bank decisions and Australian inflation data. Reflecting on January 27, 2025, the market featured a struggling US dollar due to political trade fears. Now, in January 2026, the landscape has changed significantly, with the Federal Reserve taking a strong policy stance. The Dollar Index (DXY) is robust, trading at about 103.5, a sharp contrast to last year’s weakness.

Shift In Market Dynamics

Brazil’s inflation of 0.2% in January 2025 brought temporary relief to emerging markets. However, new data shows Brazil’s IPCA-15 inflation for January 2026 has risen to 0.31%. This suggests that inflation pressures are still present, and the central bank may need to stay alert. The renewed strength of the dollar has altered the foreign exchange landscape compared to 2025. The EUR/USD pair, which was above 1.19, and the GBP/USD, which hit 1.3750, are now trading lower at around 1.08 and 1.27, respectively. This trend indicates that strategies betting on dollar strength may be worthwhile in the upcoming weeks. Speculative excitement from last year, which pushed Bitcoin to $88,000, has significantly decreased. Higher interest rates are making cash more appealing, leading Bitcoin’s price to stabilize around $43,000 in early 2026. This suggests a more cautious trading environment compared to the riskier approach of 2025. Similarly, the remarkable rise in gold prices to nearly $5,100 an ounce last year appears to be an exception, fueled by geopolitical worries and a weak dollar. With the Fed tightening liquidity to control inflation, gold is now trading in a more stable range around $2,030. This normalization offers opportunities for traders to generate income on existing positions by using covered calls. Create your live VT Markets account and start trading now.

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