The GBP/JPY pair has risen to about 213.10, gaining 0.22% as the Yen struggles. This movement comes before the Bank of Japan’s monetary policy announcement, which is drawing attention from financial markets. The Japanese Yen has been weak, particularly against the Australian Dollar. Many believe the BoJ will keep the interest rate at 0.75%, but there may be room for increases later this year.

Japanese Political and Economic Developments

Japan’s Prime Minister, Sanae Takaichi, plans to dissolve the lower house of parliament on January 23. This snap election aims to gain more seats to support this year’s fiscal budget. Japan is also considering removing the consumption tax to boost household spending, which could affect inflation. The Pound is trading cautiously due to worries about rising inflation in the UK. The Consumer Price Index jumped to 3.4% year-on-year in December, exceeding the expected 3.3%. Looking ahead, the UK Retail Sales data for December and PMI data scheduled for Friday will be closely watched. This information will be vital for predicting market direction and future economic policies. The GBP/JPY is pushing towards 213.00, a level not seen in many years, mainly because of the weak yen. The immediate focus is on tomorrow’s Bank of Japan policy meeting, which may coincide with a snap election announcement, adding uncertainty for the Yen.

Potential Volatility and Market Strategies

The political climate in Japan is a key source of volatility, especially with the proposal to cut the consumption tax to stimulate growth. The government’s push comes after a modest GDP growth of only 0.4% in the third quarter of 2025. While this fiscal stimulus could be inflationary, it puts the Bank of Japan in a challenging position, raising the chances of a sharp market reaction. On the other hand, the strength of the Pound Sterling is backed by recent data. The inflation rate for December 2025 of 3.4% reinforces our belief that the Bank of England will delay rate cuts, which contrasts with the aggressive cuts anticipated in 2024. With the risks from Japan tomorrow, the one-week implied volatility for GBP/JPY options has surged over 15%, reaching its highest level since the third quarter of 2025. Traders may want to use strategies that benefit from significant price changes, like long straddles, instead of taking a simple directional bet. This approach can help protect against unexpected announcements from the government or the central bank. Create your live VT Markets account and start trading now.

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The GBP/USD pair improved to about 1.3435 in the early European session, mainly due to UK inflation rising more than expected in December. The Consumer Price Index (CPI) climbed to 3.4% year-over-year, up from 3.2% in November. Trading moods are mixed, with the GBP/USD pair holding steady above 1.3400 during the Asian session. Investors are now looking at upcoming US economic data, including the Personal Consumption Expenditure (PCE) Price Index and the Q3 GDP growth report.

Presidential Comments Impact

The GBP/USD briefly dipped after US President Donald Trump made comments about Greenland. His remarks eased market tensions by avoiding threats of tariffs against Denmark. Other market factors include changes in indices and trade policies. Articles highlighted a thawing in US-EU relations and how strong job data is affecting currencies like the AUD. Talks about trade rules, including NATO tariffs, are still influencing trader opinions. A year ago, in January 2025, the Pound had strengthened due to unexpectedly high UK inflation. The CPI had risen to 3.4%, pushing GBP/USD towards 1.3435, as traders anticipated an active response from the Bank of England. This surprise created a good buying opportunity for those betting on a stronger Sterling. Fast forward to January 22, 2026, and things have changed significantly. The latest data from the Office for National Statistics indicates that UK CPI has decreased to 2.1% for December 2025, closer to the Bank of England’s 2% target. This cuts down the likelihood of sudden interest rate hikes and suggests we won’t see the same upward momentum as last year. On the US side, the economy shows steady but slower growth, with the Q4 2025 GDP estimated at 1.9%. The Federal Reserve is taking a neutral stance, pausing the rate hikes that were common in 2025. This is different from the uncertainty traders felt a year ago while waiting for crucial US data.

Impact on Derivative Trading Strategies

For those trading derivatives, this blend of steady inflation and clearer central bank policies points to lower implied volatility in the coming weeks. Unlike last year, when purchasing call options on GBP/USD made sense due to inflation surprises, current conditions favor range-bound strategies. Selling strangles or straddles, with strike prices outside the recent 1.2650-1.2800 range, could be a wise strategy to earn premiums. Currently, the pair trades around 1.2720, a full 700 pips lower than in January 2025. That previous 1.3400 level is now a notable long-term resistance rather than a stable zone. Thus, building trades that profit while the pair stays well below those highs seems smart. Keep an eye on the upcoming Bank of England meeting minutes and the US Non-Farm Payrolls report in early February. These events will be key tests for the market’s current low-volatility expectations. Any unexpected changes could quickly lead to new opportunities for directional trades. Create your live VT Markets account and start trading now.

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Gold prices in Saudi Arabia fell on Thursday. The price per gram decreased to 578.55 Saudi Riyals (SAR) from 581.94 SAR on Wednesday. The price for one tola of gold dropped to 6,748.10 SAR from 6,787.61 SAR the day before. According to FXStreet data, a Troy Ounce of gold is now worth 17,994.52 SAR. Ten grams of gold are priced at 5,785.51 SAR. FXStreet calculates these prices by converting international rates (USD/SAR) to local currency and units. These rates are updated daily, although they may differ slightly from local prices.

The Role of Gold

Gold has been valued for centuries as both currency and a safe investment. It acts as a safeguard against inflation and currency decline. Central banks are among the major holders of gold, having bought 1,136 tonnes in 2022—the highest annual purchase since records began. Countries like China, India, and Turkey are increasing their gold reserves. Gold prices usually move in the opposite direction of the US Dollar and US Treasuries. Economic instability or falling interest rates often leads to rising gold prices, while a strong US Dollar can keep them lower. Geopolitical tensions and fears of a recession can also affect gold prices. Currently, gold prices are experiencing a slight dip, but this should not overshadow the larger trends. The value of gold fluctuates less because of daily changes and more due to its connection with the US Dollar and interest rates. As a non-yielding asset, gold’s direction is influenced by key central bank policies. In 2025, we saw the Federal Reserve keep interest rates steady to manage inflation, which helped maintain a strong dollar. Now, with US inflation falling to 2.8% in late 2025, markets are anticipating possible rate cuts later this year. This has led to a softer US Dollar Index (DXY), currently around 101.5—a situation that usually supports gold prices.

Central Bank Strategy

Demand from central banks also plays a crucial role in stabilizing gold prices. After record purchases in the early 2020s, central banks continued to buy gold, adding over 800 tonnes to their reserves in 2025, according to World Gold Council data. This steady buying from emerging economies indicates a move to diversify away from the dollar and provides strong support for gold. The combination of a potentially weaker dollar and ongoing central bank demand makes a positive case for gold. Derivative traders might find this an excellent time to explore call options to benefit from potential price increases with limited risk. The implied volatility in options suggests that the market expects price changes in the coming months. With ongoing worries about a global economic slowdown after 2024-2025’s aggressive rate hikes, gold’s safe-haven status is particularly important. Traders are increasingly using gold futures to protect their equity portfolios against potential downturns. This reverse correlation has been especially reliable in past market cycles. However, we need to pay attention to upcoming economic data, especially the next US jobs report. A surprisingly strong report could delay expected rate cuts and lead to a short-term drop in gold prices. This suggests that strategies like bull call spreads could be wise, as they profit from price increases while minimizing losses if the market reverses unexpectedly. Create your live VT Markets account and start trading now.

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Sydney, Australia, 22 January — VT Markets today announced the release of its 2026 Global Market Outlook, titled “Steady Growth, Balanced Inflation: Navigating a Regime of Structural Opportunity.” The report delivers a forward-looking, multi-asset assessment of the trends and opportunities expected to shape global markets in 2026, drawing on in-depth analysis across equities, foreign exchange, crypto assets, and commodities.

As global growth steadies and inflation pressures continue to normalize, markets are entering a new phase marked by structural adjustment and more balanced risk conditions. Developed by VT Markets’ analyst team, the report examines how these shifts may influence asset allocation, sector leadership, and trading strategy, enabling market participants to move beyond short-term volatility and focus on longer-term positioning.

Key Highlights from the 2026 Global Market Outlook

2026 Equities Outlook
Authored by Ross Maxwell, Global Strategy Operations Lead, the equities outlook assesses global and U.S. equity markets, covering U.S. economic performance, key drivers, sector opportunities and risks, as well as index technicals and scenario-based outlooks. The analysis highlights the importance of selectivity as market leadership broadens.

2026 Forex Outlook
Written by Justin Khoo, Senior Market Analyst, the FX outlook examines the global macro and policy backdrop shaping currency markets, outlining key drivers, potential scenarios, and practical trader takeaways, with central bank divergence and capital flows as core themes.

2026 Emerging and alternative assets

Analyzed by Eduardo Ramos, Senior Market Analyst, this section evaluates developments across emerging and alternative asset classes through the lens of institutional engagement, capital allocation trends, and market structure evolution.

2026 Commodities Outlook
Written by Nayel Al-Jawabra, Senior Market Analyst, the commodities outlook explores a “new commodity regime,” focusing on structural demand drivers, strategic supply dynamics, and portfolio implications.

The report also includes a special China-focused edition, authored by Ray Yang, Market Analyst, providing targeted insight into China’s economic performance, policy direction, structural challenges, and investment opportunities.

Rather than short-term forecasts, the VT Markets 2026 Global Market Outlook emphasizes scenario analysis, risk awareness, and strategic preparedness across asset classes and regions.

The 2026 Global Market Outlook: Steady Growth, Balanced Inflation: Navigating a Regime of Structural Opportunity is now available for download via link here.

Gold prices in the Philippines fell on Thursday, according to FXStreet. The price per gram dropped to 9,132.23 PHP from 9,187.19 PHP the day before. The price per tola also decreased, settling at 106,517.80 PHP, down from 107,157.60 PHP. This information reflects international prices converted into local currency, updated daily based on market rates.

Gold As A Store Of Value

Gold has been a stable store of value and a medium of exchange for a long time. It is also used as protection against inflation. Central banks hold a significant amount of gold, adding 1,136 tonnes worth around $70 billion in 2022—the most substantial increase in a year recorded. Gold prices often rise when the US Dollar weakens and fall when the Dollar strengthens. Events like geopolitical instability or low interest rates can boost gold’s appeal as a safe asset. Typically, a strong Dollar keeps gold prices low, while a weak Dollar can push prices higher. The recent small dip in gold price has caught our attention. With the market focusing on upcoming central bank meetings, this might just be a short-term reaction to investors taking profits. We view this as a possible opportunity to buy before new policy changes are announced. The main factor to watch is the outlook on interest rates. The futures market currently suggests a 70% chance of a US rate cut by mid-year. Back in 2025, a strong Dollar limited gold’s growth, but that is changing. A weaker Dollar environment would significantly benefit gold prices.

Demand From Central Banks

We should also note the consistent demand from central banks, which added over 980 tonnes to their reserves in 2025, continuing the strong buying trend from previous years. This institutional purchasing supports a solid floor for gold prices. Ongoing geopolitical tensions are also keeping demand for gold strong. Global inflation remains stubborn, around 3.2% at the end of last year, reaffirming gold’s status as a hedge. After the strong equity market rally throughout 2025, signs of a slowdown are appearing. This makes holding gold call options a smart strategy to protect against potential declines in the stock market. Create your live VT Markets account and start trading now.

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The GBP/USD pair increased to about 1.3435 during early European trading on Thursday. This rise followed news that UK Consumer Price Index (CPI) inflation reached 3.4% year-over-year in December, which was above the expected 3.3% and an increase from November’s 3.2%. The unexpected jump in UK inflation supported the Pound Sterling, often called the Cable when paired with the US Dollar. The monthly CPI rate also improved to 0.4% in December, rebounding from a 0.2% drop in November, matching market expectations.

US Economic Factors

In the US, President Donald Trump’s decision to withdraw a proposal for tariffs on European goods eased some trade tensions. However, markets are still paying close attention to upcoming US economic indicators, including Gross Domestic Product (GDP), Jobless Claims, and the Personal Consumption Expenditures (PCE) Price Index. Strong results in these areas could boost the USD and affect the GBP/USD pair. The Pound Sterling is the UK’s official currency and the fourth most traded currency worldwide. Its value is largely influenced by the Bank of England’s interest rate decisions, which aim for a stable inflation rate around 2%. Economic indicators like GDP, PMIs, and employment figures also impact its worth. With UK inflation unexpectedly high at 3.4%, the chance of a near-term Bank of England rate cut has diminished. Markets have fully ruled out a rate cut for the first quarter, with swaps indicating a hold until at least the summer meeting. This shift to a more aggressive stance is a key reason for the pound’s current strength. For derivative traders, this situation increases the cost of options as uncertainty around the Bank’s direction grows. Front-end implied volatility for GBP/USD has risen from about 7% to over 8% this week due to the surprising inflation data. While this increase suggests it may be pricier to bet on market direction, it also creates opportunities for those looking to sell volatility in more stable conditions.

Future Economic Developments

The upcoming US Personal Consumption Expenditures (PCE) data will be the next significant driver for the pair. Core PCE held steady at about 2.8% at the end of 2025, and another strong figure may support the US dollar and challenge the pound’s recent strength. A robust reading could limit the GBP/USD rally around the key resistance level of 1.3500. President Trump’s withdrawal of tariff threats on European goods has reduced some global risks, which sometimes weigh on the safe-haven dollar. Nonetheless, this is a lesser factor compared to the differing paths of central banks currently in play. We believe that interest rate differentials will capture more market attention in the weeks ahead. Reflecting on the sharp currency swings of 2025, it’s evident that betting against continued inflation has been a losing strategy. This situation feels reminiscent of last autumn when markets got ahead of themselves with central bank changes. Thus, using options to manage risk, like buying call spreads to aim for a move to 1.3550, may be wiser than holding outright long positions. Create your live VT Markets account and start trading now.

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USD/CAD is still trading under 1.3850, driven by a stronger Canadian Dollar (CAD) thanks to rising oil prices. During Thursday’s Asian trading session, it remained around 1.3830. West Texas Intermediate (WTI) oil held steady at about $60.50 per barrel after increasing for four straight days. Although there are concerns about oversupply, easing geopolitical tensions have helped reduce risks related to energy demand.

US Geopolitical Influence

US geopolitical events, like President Trump delaying tariffs on Europe, have supported the US Dollar, limiting its decline against the CAD. Traders are now looking forward to upcoming economic data, including Initial Jobless Claims and GDP Annualized, for further insights. The Federal Reserve is being cautious about changing interest rates without clearer signals on inflation reaching the 2% target. Market predictions still point towards a possible 50 basis point rate cut later this year. The Canadian Dollar’s performance relies heavily on the Bank of Canada’s interest rates, oil prices—Canada’s biggest export—and overall economic health. Economic indicators like GDP and inflation greatly impact the CAD’s value, with strong data typically benefiting the currency. The Bank of Canada’s interest rate policies and credit conditions play a significant role in the CAD’s value, while a robust economy supports a higher currency value. Last year, USD/CAD stayed below 1.3850 largely due to changing geopolitics and oil prices just above $60 a barrel. The market focused on potential tariff delays and their impact on global demand. This created a very different situation than what we see today.

Economic Fundamentals and Currency Strategies

In late January 2026, the situation has shifted considerably. WTI crude oil recently traded above $85 per barrel due to ongoing OPEC+ supply cuts and unexpectedly strong winter demand. This change has pushed USD/CAD down to the low 1.3500s, highlighting a much stronger Canadian dollar linked to commodities. The focus has moved from geopolitical issues to core economic fundamentals. Traders are now concentrating on the policy differences between the Bank of Canada (BoC) and the Federal Reserve. With the latest US PCE inflation data for December 2025 at 2.7%, the Fed is indicating a “higher for longer” position on interest rates. This supports the US dollar against most currencies. Canada’s economy is showing impressive strength, with December 2025 employment data from Statistics Canada adding over 40,000 jobs, beating expectations. This robust data, alongside Canadian inflation slightly above the BoC’s target, suggests the BoC may be one of the last G7 central banks considering rate cuts. This outlook continues to favor the Canadian dollar. In this environment, traders may consider buying Canadian dollar call options against the US dollar, anticipating a move toward 1.3400. This strategy allows traders to benefit from the Canadian dollar’s strength while limiting potential losses if the Federal Reserve becomes more aggressive. With volatility trending lower, options are a cost-effective way to express this view. Alternatively, for those wanting to hedge or take a more direct approach, shorting USD/CAD futures contracts could be an option. This strategy anticipates that the interest rate difference will continue to favor the Canadian dollar, particularly if oil prices remain high through the first quarter. Any dip in US economic data in the coming weeks could accelerate a downward trend in this pair. Create your live VT Markets account and start trading now.

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Silver prices dropped to about $91.80 during Thursday’s trading in Asia, a decline of 0.92%. This drop followed US President Donald Trump’s decision to back off his tariff threat regarding Greenland, which lessened the demand for safe assets like silver. The Federal Reserve is likely to keep interest rates steady for now and may do so until Chair Powell’s term ends in May. Trump’s announcement about Greenland eased earlier tensions, making safe-haven assets, such as silver, less attractive. Economists believe that the strong US Dollar will keep putting pressure on non-interest-bearing assets like silver. However, if trade tensions between the US and Europe rise again, demand for safe-haven assets like silver could increase. Silver plays an important role in industries like electronics and solar energy, which can affect its price. Additionally, silver prices often move along with gold prices, as both are seen as safe-haven investments. Key factors influencing silver’s market include interest rates, the strength of the US Dollar, and geopolitical events. With silver falling below $92.00, we view this as a short-term response to declining tensions over Greenland. The Federal Reserve’s decision to keep interest rates steady until at least May will continue to support the US Dollar, creating challenges for non-yielding assets. This sentiment is mirrored in broader markets, as the CBOE Volatility Index (VIX) fell below 14 last week for the first time in months, indicating less market fear. Given the Fed’s firm stance, traders should think about strategies to prepare for potential weaknesses in the coming weeks. Buying put options could offer downside protection, especially since profit-taking may continue after recent record highs. This caution is backed by manufacturing PMI figures from late 2025, which showed a slight dip in industrial demand following a very strong year. However, we shouldn’t overlook the uncertainty surrounding the new Greenland agreement, as key officials from Europe and the US have expressed skepticism. The market whiplash during the 2025 trade disputes reminds us how quickly sentiment can shift from one headline. This combination of a hawkish Fed and unstable geopolitics may lead to increased volatility. Implied volatility on silver options has decreased from its peak during the Greenland tariff threats but remains high compared to the calm seen in early 2025. This suggests that using option straddles or strangles could be beneficial for traders expecting a significant price shift, but unsure of the direction. Finally, we should consider the gold-to-silver ratio, now around 52, with gold priced above $4,800. This is a low historical ratio, often indicating times when silver underperforms gold. This suggests silver may be overvalued compared to gold, implying that any new investments in precious metals might lean toward gold until this ratio widens.

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**WTI Oil Prices Hold Steady** WTI oil prices are steady at around $60.50, driven by worries about oversupply. The International Energy Agency has noted that global supply will outpace demand this year. Still, we see a slight uptick in oil prices due to reduced demand risks linked to US-EU trade issues involving Greenland and temporary shutdowns in Kazakhstan. WTI, a type of crude oil, remained stable after four days of gains, trading at $60.60 per barrel in Asia. Even with supply risks, fears of oversupply continue, as US crude inventories rose by about 3 million barrels last week. Easing geopolitical tensions have further influenced energy demand forecasts. There’s some optimism about tighter supply due to temporary shutdowns at Kazakhstan’s Tengiz and Korolev fields. Venezuelan oil exports have also climbed to 7.8 million barrels, signaling a slow recovery in production. Valero Energy’s purchase of Venezuelan crude under a US agreement is a notable development. WTI oil, recognized for its quality, serves as a benchmark in global markets and is heavily affected by factors like global growth, political stability, and the value of the US Dollar. Inventory data and OPEC’s production choices significantly shape WTI prices. OPEC+ includes key non-member countries like Russia, impacting overall oil dynamics. The current WTI price of about $82 per barrel contrasts sharply with market conditions from last year. Conflicting signals from tight OPEC+ supply and mixed global demand forecasts create substantial uncertainty for the upcoming weeks. Derivative traders will need to analyze both current data and historical trends to manage potential price fluctuations. **Historical Market Comparisons** A similar struggle between supply and demand occurred in 2025 when WTI was around $60.50. Then, the International Energy Agency warned of significant oversupply, which limited price increases. This shows how quickly supply concerns can take over the market, even amid positive news. Currently, the demand outlook is affected by the International Monetary Fund’s modest global growth forecast of 2.9%, creating some challenges. This contrasts with last year, where easing geopolitical tensions boosted market sentiment by reducing demand risks. The focus now appears to be more on the strength of the economy rather than political stability. On the supply side, OPEC+ has decided to maintain production cuts of 2.2 million barrels per day through the first quarter, keeping the market tight. This disciplined strategy, alongside a recent EIA report showing an unexpected inventory drop of 1.8 million barrels, supports prices well. This is a stronger supply situation than the temporary field shutdowns seen in Kazakhstan in 2025. Geopolitical risks are adding a layer of concern, with increased naval patrols in the Strait of Hormuz raising fears of possible transit disruptions. Last year, the emphasis was on de-escalation after the US eased tariff threats over Greenland. The current environment seems more susceptible to sudden shocks that could affect supply lines. **Investment Strategies for Volatility** In light of this volatile backdrop, traders might consider options strategies that can benefit from significant price movements in either direction. Buying a straddle—purchasing both a call and a put option with the same strike price and expiry date—could be a smart move to capitalize on expected fluctuations. This strategy profits if WTI makes a substantial move either up or down before the options expire. For those who have a directional yet cautious outlook, bull call spreads on WTI futures provide a defined-risk approach for potential upside movement. This involves buying a call option at a lower strike price while selling another call at a higher strike price. This method could take advantage of price increases toward the higher strike, while also limiting initial costs and potential losses if the market declines. Create your live VT Markets account and start trading now.

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The latest data on U.S. crude oil stocks shows a drop. As of January 16, crude oil inventories have decreased to 3.04 million barrels, down from 5.27 million barrels. This change indicates shifts in supply and demand.

Market Expectations And Trading

Such information can affect market expectations and trading decisions. It’s a crucial indicator for the energy sector. The reported decline of 3.04 million barrels in crude oil stocks for the week ending January 16th suggests strong demand or limited supply, both of which typically support higher prices. This marks the third consecutive week of stock declines, reflecting a trend that has been developing since the start of the year. The official EIA report also confirmed this trend, noting a draw of 2.8 million barrels and refinery utilization remaining robust at 93.5%. This high operational rate shows that refiners are actively processing crude to meet the demand for products like gasoline and heating oil, indicating that the physical market remains tight. For those expecting prices to rise, this data may justify buying call options on March 2026 WTI contracts. The severe winter weather in the U.S. Northeast is raising heating degree days by 15% above the ten-year average, driving up the demand for heating oil. This fundamental pressure could lead to higher crude prices soon.

Economic Activity And Market Sentiments

However, it’s important to note that this week’s drop is smaller than the previous week’s decline of 5.27 million barrels. This slowdown, along with the latest U.S. manufacturing PMI falling to 49.8, might signal weakening economic activity. A slowing economy could eventually reduce oil consumption. This signs of weakness suggest considering protective put options or bear put spreads to guard against a potential price drop. While crude stocks decreased, gasoline inventories increased by 2.1 million barrels, suggesting that end-users may not be demanding fuel as much as refinery output indicates. There seems to be a disconnect between refiners’ optimism and consumer behavior. Last January, a similar inventory draw pattern led to a price correction in February as post-holiday demand decreased. This historical trend suggests caution against becoming overly bullish based on just a few weeks of data. We are likely to see continued volatility. We are also keeping an eye on global tensions, particularly with the OPEC+ virtual meeting scheduled for February 5th. Any announcements regarding production quotas for the second quarter could lead to significant market fluctuations. Holding long volatility positions through options seems like a smart strategy over the next few weeks. Create your live VT Markets account and start trading now.

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