Existing home sales in the United States surpassed forecasts in December, reaching an actual figure of 4.35 million compared to the expected 4.21 million.
Gold continues to rally, reaching new highs near $4,650 per ounce, driven by a weaker US Dollar and falling US Treasury yields.
Ethereum Sees Boost
Ethereum has seen a boost, with US-listed spot ETFs recording $130 million in net inflows, marking the largest in nearly a week.
GBP/USD experiences selling pressure, moving towards the 1.3420 mark, as markets prepare for upcoming UK GDP data releases.
Hyperliquid is gaining momentum, trading above $26.00, supported by strong on-chain metrics and increased derivatives market activity.
The article outlines various assets and market movements but cautions readers that the information is not a recommendation for buying or selling.
Conduct Research Before Investing
Readers are encouraged to conduct thorough research before making investment decisions, acknowledging the inherent risks involved in open market investments.
The current market is defined by uncertainty, which means volatility is likely to rise in the coming weeks. With Jerome Powell’s term ending and threats to Fed independence, we should consider buying volatility through options like straddles on the S&P 500. This is a direct play on the increasing political and monetary policy risk that isn’t yet fully priced in.
The stronger-than-expected housing data complicates the Federal Reserve’s path, echoing the stubborn economic strength we saw through 2025 even after a series of rate hikes. This data supports the hawkish view that the inflation fight isn’t over, creating conflict with market expectations for rate cuts. We can use derivatives on SOFR futures to bet on a higher-for-longer rate path than the market is currently pricing.
Geopolitical tensions in Iran are adding a significant risk premium to crude oil, pushing WTI to its highest level since last October. This mirrors the energy price shock experienced in 2022, which directly fueled inflation and forced central banks to act aggressively. We should be looking at long positions in crude oil futures or buying call options to profit from further supply-side disruptions.
Gold’s rally past $4,600 is a clear signal that traders are seeking safety amid dollar weakness and global instability. Historically, Gold performs well in these environments, as we saw during the periods of geopolitical flare-ups over the past few years. Buying Gold call spreads offers a way to participate in further upside while defining our maximum risk, which is prudent at these new record highs.
The US Dollar is being directly hammered by political concerns, which is a rare but powerful driver for the currency markets. This creates a clear opportunity to short the dollar index (DXY) using futures. We can also express this view by going long on currencies like the British Pound, which is rallying in response.
