President Trump’s executive order imposing tariffs on imports from nearly 70 countries renewed trade concerns, impacting the US Dollar. The order sets tariffs of 10% to 41%, with potential further increases for major trading partners like China if negotiations fail.<\/p>\n
Treasury yields declined following the NFP report, with the 10-year yield at approximately 4.24%. This reduction lowered the opportunity cost of holding Gold. Gold remains a popular safe-haven asset, particularly amid geopolitical uncertainty and economic volatility, with central banks from emerging economies like China and India continuing to strengthen their Gold reserves.<\/p>\n
Given the weak jobs report and the subsequent surge in gold, we see a clear path forward for bullish derivative plays on precious metals. The market is now pricing in a high probability of a Fed rate cut in September, which historically weakens the dollar and boosts gold. We should position for continued upside in gold over the next several weeks.<\/p>\n
To support this view, recent data shows the Dollar Index (DXY) has just broken below the key psychological level of 95.00 for the first time in over a year. Furthermore, the latest Consumer Price Index (CPI) report from mid-July 2025 came in slightly cooler than expected, giving the Fed more justification to ease monetary policy. These factors create a strong tailwind for non-yielding assets like gold.<\/p>\n
We believe buying call options on gold futures or gold-backed ETFs is the most direct way to capitalize on this trend. Considering the potential for a sharp move following the September Fed meeting, we are looking at call options with strike prices of $3,400 and $3,500 for October and November 2025 expirations. This strategy allows us to profit from a continued rally with defined risk.<\/p>\n
This situation feels reminiscent of the 2019-2020 period when the Federal Reserve began cutting rates amidst trade war uncertainty. Looking back, we saw gold rally over 30% in that environment. The current combination of a slowing US economy and renewed global trade tensions provides a similar, powerful setup for gold prices.<\/p>\n
The decline in Treasury yields further solidifies our bullish stance, as the 10-year yield dropping to 4.24% significantly lowers the opportunity cost of holding gold. With yields falling, large institutional funds are more likely to rotate into gold as a store of value. We expect this trend in yields to continue as rate-cut expectations become more entrenched.<\/p>\n
Volatility in the gold market has increased, making options more expensive. Therefore, we should also consider bull call spreads to lower the upfront cost of our positions. This involves buying a call option at a lower strike price and simultaneously selling another call at a higher strike price, capping our potential gains but reducing our initial premium outlay.<\/p>\n
Finally, the strong institutional demand provides a floor for the market. Data released by the World Gold Council for the second quarter of 2025 showed that central banks, led by China and Turkey, added a net 270 metric tons to their reserves. This consistent buying signals that major global players are also positioning for long-term dollar weakness and geopolitical instability.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Gold jumps to $3,350 as weak jobs data, rising unemployment, and trade tensions boost safe-haven demand.<\/p>\n","protected":false},"author":62,"featured_media":16975,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-27988","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=27988"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/27988\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/16975"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=27988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=27988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=27988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}