In November, Spain’s Harmonized Index of Consumer Prices (HICP) rose by 3.2% year-on-year. This increase surpassed expectations, which were projected at 3.1%.
Gold reached over $4,300, marking its highest point since October 21, due to the Federal Reserve’s dovish outlook. The US Dollar remains low, struggling to attract buyers.
Currency Markets Update
In currency pairing news, EUR/USD was stable near 1.1750, influenced by anticipated shifts in policy between the Federal Reserve and the European Central Bank. Meanwhile, GBP/USD stayed below 1.3400, barely impacted by mixed UK data showing a 0.1% GDP decline and 0.5% growth in manufacturing production.
Litecoin’s price was steady above $80, potentially facing a long squeeze risk as Open Interest declines. Aave traded above $204, nearing a possible breakout from its descending channel which could favour a bullish trend.
The S&P 500 saw gains as US 2-year yields fluctuated around 3.50% following a perceived dovish Federal Reserve rate cut. The cut particularly benefited parts of the market not focused on technology.
The divergence between the Federal Reserve and the European Central Bank is becoming the primary play for the coming weeks. With the Fed cutting rates amid spiking jobless claims, the path for the US Dollar appears weak. The recent Q3 2025 GDP figures showing a preliminary contraction of 0.5% only reinforce this dovish outlook.
Impact on the Eurozone and Gold
We see the slightly higher-than-expected Spanish inflation of 3.2% as a key piece of this puzzle. It confirms that price pressures in the Eurozone are stickier, giving the ECB little reason to follow the Fed’s lead. In fact, Eurozone core inflation for November just came in at 3.5%, well above the ECB’s target and cementing the case for a hawkish hold.
This policy split, a stark reversal from the coordinated tightening we saw back in 2022 and 2023, should continue to benefit the EUR/USD pair. Options strategies favoring further upside towards the 1.1800 level could be considered. We should look for opportunities to position for a stronger Euro against a weakening Dollar into the new year.
Gold’s push beyond $4,300 is a direct consequence of this environment, fueled by a falling dollar and a flight to safety. As long as the Fed signals economic weakness and continues its easing cycle, gold’s momentum is likely to persist. Maintaining long positions through futures or call options seems prudent.
In equities, the Fed’s rate cut is driving a noticeable rotation away from the tech-heavy leadership of the past few years. The rally is broadening to non-tech sectors that benefit more directly from lower borrowing costs. Derivative plays should now focus on this rotation, perhaps favoring value-oriented index futures over those concentrated in technology.
