In August, Deutsche Bank released data comparing the performance of various assets, adjusted to USD. The US Dollar Index fell 2.2% due to factors such as criticisms of the Federal Reserve and a weak July jobs report.
Oil faced challenges again during the month, contrasting with a strong year for European stocks, with China showing substantial progress. Gold and silver also performed well, experiencing notable gains.
The Us Dollars Weakness
Based on August’s performance, we see the US dollar’s weakness as a primary theme for the coming weeks. The Dollar Index’s 2.2% drop last month, spurred by disappointing economic figures like the addition of only 95,000 jobs reported on August 1st, points to continued softness. We would consider buying put options on dollar-tracking ETFs or selling USD futures ahead of the Fed’s September 18th meeting.
European and Chinese stocks are showing strong momentum that is likely to persist with a weaker dollar. For instance, Germany’s DAX index gained 4.1% in August, building on a rally that started back in the spring of 2025. To capitalize on this, we are looking at call options on major European indices and China-focused ETFs like FXI.
Conversely, oil struggled in August, and we expect this trend to hold as fears of slowing global demand grow. WTI crude futures recently broke below the key $75 per barrel support level for the first time since May 2025. Traders should consider purchasing put options on oil futures to hedge against or profit from a further slide.
Gold And Silver Performance
Gold and silver are benefiting from the dollar’s decline and economic uncertainty, and this is a clear signal for traders. Gold futures pushed past the $2,450 per ounce mark last week, a level not seen since the brief spike in early 2024. We believe buying call options on gold and silver ETFs remains a prudent strategy to ride this wave.
