The United States reported a natural gas storage change of -38 billion cubic feet, which was higher than expected predictions of -53 billion. This data has implications for the broader energy markets and can affect trading strategies in related sectors.
In currency markets, the EUR/USD saw recovery towards the 1.1750 mark despite previous bearish trends, amid low volatility on the year’s closing day. The GBP/USD remained weak around 1.3450 due to a modest US Dollar recovery, influenced by year-end adjustments in trading positions.
Gold And Cryptocurrencies
Gold prices retreated to the $4,300 area amid profit-taking and position adjustments but are poised to post gains for December. Bitcoin, Ethereum, and Ripple maintained steady positions, with potential for gains as they face critical resistance levels.
The economic outlook for 2026-2027 in advanced countries appears promising, with expectations for continued supportive factors from 2025. The crypto market in 2025 was volatile, driven by favourable regulatory changes and increased adoption of AI and tokenisation.
The smaller-than-expected natural gas withdrawal of 38 billion cubic feet suggests weaker demand as we enter January. We should consider short positions on Henry Hub futures or buy puts, as this points to potentially milder winter weather so far. We saw a similar pattern back in the winter of 2022-2023, which led to a significant price collapse through the first quarter.
Equity Markets And The US Dollar Index
With equity markets like the Dow Jones softening in thin holiday volume, we should be prepared for a return of volatility in the new year. The CBOE Volatility Index (VIX) has been hovering near multi-year lows, similar to what we saw in late 2023, but this calm is unlikely to last as institutional traders return to their desks. Consider buying VIX call options or collars on major index positions to hedge against a potential January shake-up.
The US Dollar Index is drifting without clear direction, which is typical for the last week of the year. This quiet period offers a chance to position for the first major data release of 2026, which will likely be the Non-Farm Payrolls report in the first week of January. A strong jobs number, beating the 2025 average monthly gain of around 180,000, could reignite bullish dollar bets and pressure pairs like EUR/USD and GBP/USD.
Gold’s pullback to the $4,300 area looks like classic year-end profit-taking after a very strong five-month rally. While the long-term trend appears bullish, the optimistic economic outlook for 2026 could reduce its appeal as a safe-haven asset in the short term. We could use this dip to sell some out-of-the-money covered calls against long positions to generate income while waiting for the next move.
