The United States experienced a reduction in natural gas storage by 167 billion cubic feet, surpassing forecasts of a 169 billion cubic feet decrease for the week ending December 12. This figure emerged amid economic updates from various financial entities, detailing currency and commodity trends.
Mexico’s central bank reduced interest rates from 7.25% to 7%. The US CPI increased by 2.7% year-over-year in November, nearly reaching the Federal Reserve’s target. In currency markets, the EUR/USD approached 1.1700 following the European Central Bank’s move to keep interest rates unchanged, and the GBP/USD returned to 1.3370 following softer-than-expected US CPI data.
Gold Remains Stable Amid Economic Announcements
In commodities, gold remained stable at around $4,330 despite widespread economic announcements. Bitcoin maintained levels just under a critical threshold of $87,000 due to a rise in ETF inflows, while Ethereum held support at $2,800 amid mild outflows. In the UK, the Bank of England cut interest rates to 3.75% during a divided meeting, which led to a stronger sterling in the market. Meanwhile, Ripple’s price stood at $1.82, showing subdued activity due to low retail demand.
The natural gas storage draw of -167Bcf was slightly less than anticipated, suggesting demand is not as strong as the market priced in. We see this as an opportunity to position for lower prices, especially as the latest NOAA forecast points to above-average temperatures across the Midwest and Northeast into the new year. Selling January futures contracts or buying puts could be a prudent strategy based on this weakening demand outlook.
That soft November US CPI reading of 2.7% has fundamentally shifted expectations for Federal Reserve policy. The CME FedWatch Tool now shows the market is pricing in a 70% chance of a rate cut in the first quarter of 2026, up from just 35% last month. This outlook should continue to weigh on the US Dollar, making it favorable to hold positions against it.
Gold is holding strong near $4,330, a level we haven’t seen since the peaks of late 2024. With the dollar under pressure and rate cuts on the horizon, we believe buying call options targeting a break of the $4,381 resistance level is a compelling trade. The market is positioned for a significant move, and the path of least resistance appears to be higher.
Bank Of England’s Divided Decision Effects
The Bank of England’s divided decision to cut rates was interpreted as hawkish, which has given Sterling a tailwind. We should look for opportunities to buy GBP/USD, as this policy divergence with an increasingly dovish Fed could push the pair higher. Recent UK wage growth data also came in surprisingly strong, supporting the case for the BoE to hold off on further cuts.
In the crypto markets, Bitcoin’s struggle with the $87,000 resistance level is the main event. We are seeing sustained inflows into spot Bitcoin ETFs, with over $400 million added last week alone, suggesting institutional buying is absorbing any selling pressure. A decisive close above this level could trigger a quick rally, making long positions in futures or call options attractive.
