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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Gold (XAU/USD) is close to its all-time high of $5,100. Trade uncertainties and fears of a US government shutdown are pushing up demand for gold. Actions like the US President’s tariff hike on South Korea and potential funding issues for the Department of Homeland Security add to this trend. The technical outlook for gold is positive, but the signals indicate the rally might be losing steam. If prices hit the $5,100 resistance level, it could create a double top and lead to a pullback. However, breaking through could drive prices up to around $5,450.

Gold As A Safe Haven

Gold has always been seen as a safe-haven investment. During times of trouble, it holds its value well. Central banks, working to strengthen their economies, are the biggest buyers, acquiring 1,136 tonnes in 2022. Countries like China and India are rapidly boosting their gold reserves. Usually, gold prices move in the opposite direction to the US Dollar and Treasuries. A weaker Dollar tends to mean higher gold prices. Factors like geopolitical issues and interest rate changes can influence gold prices, and a declining Dollar often helps raise them. Gold’s value is closely linked to the US Dollar since it is priced in dollars. With gold nearing $5,100, option traders have a key opportunity. The technical indicators suggest the rally may be slowing down, making it a good time to buy put options with strike prices below $5,000 to benefit from a possible drop. On the flip side, if gold breaks above its all-time high, it could signal strong momentum, making call options with a target near $5,450 attractive. The fundamental situation also supports a bullish outlook, with renewed trade uncertainties and fears of a US government shutdown. This environment echoes market reactions during the trade disputes in the late 2020s, which drove investments into safe havens. Additionally, central banks have been buying aggressively; in the first three quarters of 2025, they added over 950 tonnes to their reserves, continuing the record-breaking trend.

Potential Market Movements

Despite solid fundamentals, we should be cautious about a potential double top formation at the $5,100 level. Traders with long futures positions might want to hedge their bets by buying put options to guard against a sharp drop toward the support level at $4,890. The divergence on the MACD and RSI indicators is a classic warning that suggests short-term downward pressure is building. Market expectations of Federal Reserve easing can significantly impact gold, especially after the aggressive rate hikes of 2023-2024 left the economy sensitive to any downturn. We know that a weaker dollar, which often follows rate cuts, is generally bullish for gold. Watching the U.S. Dollar Index will be crucial; if the dollar breaks down, it may push gold decisively through its current resistance. With mixed signals from fundamentals and technicals, we can expect increased volatility in the coming weeks. This situation might favor strategies like long straddles or strangles, enabling traders to profit from significant price movements in either direction without needing to predict the outcome perfectly. The key is to be ready for a breakout from the current tight range, as the market won’t remain at this crucial point for long. Create your live VT Markets account and start trading now.

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The National Bank of Hungary is likely to keep interest rates at 6.50% during its next meeting. However, there is a 60% chance of a rate cut in February, based on market predictions influenced by January’s inflation data. The EUR/HUF exchange rate is expected to stabilize around 385 as the market anticipates possible changes in policy. Analysts think that there will be no changes at today’s meeting, which could set the stage for future rate cuts.

FXStreet Insights

FXStreet Insights come from a team that collects information from various market experts. These insights include notes from businesses and viewpoints from both internal and external analysts. FXStreet also includes legal disclaimers, highlighting risks related to market information. They stress that their content is not investment advice and encourage thorough research before trading. We expect the National Bank of Hungary to maintain its policy rate at 6.50% this week, but we are particularly interested in the high likelihood of a rate cut in February. The market currently sees about a 60% chance of a cut next month, making the guidance from this meeting very important. Any hints of a softening stance could lead to market adjustments. The case for easing monetary policy has strengthened over the past year. Headline inflation in Hungary has decreased significantly, from over 17% in early 2025 to just 5.5% in December 2025. This rapid drop gives the central bank much leeway to start cutting rates to help the economy.

Strategic Market Moves

Given the uncertainty around when the first cut will occur, we suggest buying short-term volatility on the forint as a smart move. Buying EUR/HUF straddles that expire after the February meeting could be effective, as this strategy would benefit from a large price movement in either direction, whether the bank cuts rates or surprises with a hold. If a clear cutting cycle starts, we predict the EUR/HUF pair may test levels above the 385 stabilization point. Looking back to 2024, the pair often traded above 390, indicating potential for further forint weakness. We see buying EUR/HUF call options as a cost-effective way to prepare for this possible upside. Moreover, the anticipated policy shift will also affect interest rate derivatives. We expect forward rate agreements to begin pricing in a series of cuts throughout 2026. Traders should seek opportunities to receive fixed rates on Hungarian interest rate swaps, positioning for lower short-term rates in the upcoming quarters. Create your live VT Markets account and start trading now.

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The GBP/USD pair is having trouble staying above the 1.3700 mark for the second day in a row. Even though it dipped a bit, it remains above the mid-1.3600s, with limited selling stopping a steep drop from its four-month high. The US Dollar has seen a slight recovery from its lowest point since September 2025. This creates challenges for the GBP/USD pair, as traders adjust their positions ahead of the US Federal Reserve’s policy announcement. Many expect that rates will remain stable after their meeting.

GBP/USD Hits New Highs

The GBP/USD pair rose above the four-month high of 1.3650, reaching its highest level since September 17. This rise follows a four-day upward trend that began at the 200-day simple moving average around 1.3400. The pair continues to trend positively, staying above a long-term upward trendline and showing an increasing MACD value above zero. While the expanding Bollinger bands indicate high momentum, the RSI is stable near the 70 overbought level, suggesting possible sideways movement. In other markets, the EUR/USD remains strong above 1.1900, while gold is holding steady at about $5,100 per troy ounce. Bitcoin is stabilizing around $88,000 after a recent increase, and Axie Infinity’s token, AXS, has risen by 3% following the announcement of its new app token. The pound is facing challenges at the 1.3700 level against the dollar, a crucial resistance point it has struggled to break for two days. While the momentum that pushed us to this four-month high is strong, technical indicators hint that the rally may have gone too far. Traders should be cautious about expecting an easy climb from here.

Traders Watch Federal Reserve Decision

This price movement is mainly due to the dollar’s weakness rather than the pound’s strength, as the dollar has dropped to its lowest level since September 2025. Markets are preparing for the Federal Reserve to keep interest rates steady at its meeting tomorrow, especially after the latest CPI report for December 2025 showed core inflation cooling to 2.9%. This data suggests that the Fed’s rate-hiking cycle may be over, putting continued pressure on the dollar. For derivative traders, this creates an opportunity with the upcoming Fed announcement. A bull call spread on GBP/USD could be useful, allowing one to profit from a potential breakout above 1.3700 while keeping upfront costs low. This strategy benefits from a price increase but also protects against potential loss if prices remain stagnant after the meeting. Implied volatility is expected to be high ahead of the central bank’s decision, making options pricier. This volatility could make selling cash-secured puts below the recent support level near 1.3600 an appealing strategy for collecting premiums. This approach is for those who believe any dips will be brief, keeping the pair above this support level in the coming weeks. This situation feels familiar, as we saw the dollar index drop by over 4.5% in the last quarter of 2025 when markets anticipated a peak in interest rates. The current strength in assets like gold, nearing $5,100, and Bitcoin, around $88,000, reinforces this general sentiment against the US dollar. This widespread weakness offers strong support for the pound, even as it struggles at resistance. Create your live VT Markets account and start trading now.

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The EUR/JPY faced resistance at 183.65 and fell below 183.00. Recent gains in the Yen have decreased as fears of intervention lessen, but worries about Japan’s fiscal health remain. The Euro bounced back from six-week lows against the Yen but couldn’t hold above 183.00. The market is closely watching the 160.00 level for the Yen, staying cautious about intervention while fiscal issues rise again.

Political Changes in Japan

Japan is undergoing political changes as Prime Minister Sanae Takaichi has called for snap elections, which has sparked speculation about economic policy. The Bank of Japan (BoJ) and the Fed have raised concerns about USD/JPY rates, intensifying market tension last week. In Europe, the German IFO Business Climate data fell short of expectations, and there are low hopes for significant policy shifts from ECB President Christine Lagarde’s upcoming address. The value of the Japanese Yen mainly depends on the Japanese economy, BoJ policies, and the difference in yields between Japanese and US bonds. The Yen is valued as a safe haven, appreciated for its stability during market turmoil. The BoJ’s long-standing loose monetary policy has influenced the Yen’s value, but recent changes are affecting its standing against major currencies. Looking back at the inability to recover at 183.65 in late 2025, it’s clear that the market underestimated the pressure on the Yen. Currently, with EUR/JPY trading around 188.50, we see that worries about Japan’s fiscal policy have overshadowed the temporary fears of central bank intervention. This ongoing weakness in the Yen has been a prominent trend for months.

Economic Strain on the Yen

The political developments surrounding the call for snap elections last year have raised concerns, putting continued pressure on the Yen. Prime Minister Takaichi’s government pushed its spending agenda, and Japan’s debt-to-GDP ratio has now surpassed 265%, the highest among G7 nations. This financial strain makes the Yen less appealing, indicating that any recovery is likely to be brief. Although the BoJ and Fed inquiries calmed the market in 2025, the threat of intervention hasn’t vanished; it’s just moved to higher levels. The market is now looking at the 163.00 level in USD/JPY as the new benchmark, acting as a barrier for pairs like EUR/JPY. This suggests that while the trend is upward, traders should remain ready for sudden reversals triggered by warnings from Tokyo. The gap between the ECB and the Bank of Japan policies has widened further. Recent data shows Eurozone inflation at 2.2%, with the ECB hinting at a rate cut in the second quarter. In contrast, the BoJ has maintained its policy without clear signs of tightening, which keeps the interest rate gap favoring the Euro. Given these mixed signals, traders in derivatives might want to explore strategies that take advantage of ongoing volatility. With one-month implied volatility for EUR/JPY around 9.8%, options are positioned for big price changes. Buying long-term call options on EUR/JPY could capture potential gains from policy divergence, while acquiring inexpensive out-of-the-money puts can help hedge against the constant risk of sudden intervention. Create your live VT Markets account and start trading now.

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The NIESR estimates the UK’s GDP for December at 4.296%, a significant improvement from the earlier figure of -0.1%. The article discusses several key financial trends. The EUR/USD is now above 1.1900, suggesting a stronger Euro. At the same time, the GBP/USD has reached a high of 1.3750, fueled by a weakening US Dollar.

Gold and Cryptocurrency

Gold prices remain robust near $5,100 per ounce, driven by uncertainties in trade policies and geopolitical risks. Bitcoin is stable around $88,000 after a recent increase. Current global trade tensions are also mentioned, particularly President Trump’s escalating issues with South Korea. The Axie Infinity token has gained 3% due to rising retail demand. There are also forecasts for brokerage services in 2026, highlighting the best brokers for trading different assets. The article warns that markets involve risks, and all information is meant for informational purposes only. Thorough research is advised before making any investment. The author clarifies they are not responsible for any errors or losses from the provided information and emphasizes seeking professional advice.

UK Economy and Interest Rates

The UK’s latest growth estimate is impressive, showing a 4.3% increase, contrary to expectations of a slight contraction. This marks a remarkable turnaround from the technical recession experienced in late 2024 when the economy declined for two consecutive quarters. This unexpectedly strong data may lead the Bank of England to reconsider its future plans, making interest rate cuts unlikely. Given this context, it’s wise to consider call options on GBP/USD to capitalize on the Pound’s continued strength. UK inflation has remained higher than in other G7 countries throughout 2025, putting the BoE in a position where it might need to tighten further. If GBP/USD breaks above the current high of 1.3750, it could quickly move towards the 1.4000 level last seen years ago. Meanwhile, the US Dollar is facing broad selling pressure due to signs of a slowing job market and renewed trade war concerns. The recent ADP report shows the weakest private-sector hiring in over a year, giving the Federal Reserve plenty of reason to hold steady. The contrast between a potentially hawkish BoE and a dovish Fed is driving the currency markets. This widespread weakness makes put options on the Dollar Index (DXY) an appealing strategy. We are also seeing this reflected in EUR/USD, which is approaching levels not seen since mid-2021. The dollar’s path seems likely to trend downwards in the coming weeks. However, the political landscape adds risk that calls for hedging. Fears of new tariffs and ongoing tensions in the Middle East could lead to sudden market spikes. Buying out-of-the-money call options on the VIX can offer an inexpensive way to safeguard our portfolios from unexpected shocks. Gold’s rise towards $5,100 per ounce indicates that many investors are looking for a safe haven amid geopolitical uncertainty and long-term dollar depreciation. The price of gold has been steadily increasing since late 2025 as central banks have increased their purchases. Long positions via futures or call options should be considered a core strategy to benefit from ongoing risks. Create your live VT Markets account and start trading now.

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