Insights 
VT 
Gold has surged to a new record above $4,200 as markets respond to the latest US-China trade tensions. The US Dollar weakened after President Trump hinted at potential trade terminations with China, impacting currency strength.
This week, the US Dollar has experienced fluctuations, weakening particularly against the Japanese Yen by 0.50%. Policymakers worldwide are giving speeches, with central bank insights being particularly observed for economic impact.
Federal Reserve and Currency Movements
In other developments, Federal Reserve Chairman Powell highlighted potential risks to the labour market and inflation in his speech at an economic forum. France’s Prime Minister has delayed pension reforms, affecting EUR/USD movement as the currency pair edges higher.
The Reserve Bank of Australia’s Assistant Governor noted stronger-than-expected recent data, pushing AUD/USD upwards. Meanwhile, GBP/USD has benefitted from the USD’s pressure, while USD/JPY continues to decline.
Gold remains a preferred investment, serving as a hedge against currency devaluation and inflation. Central banks are key gold buyers, adding 1,136 tonnes to their reserves in 2022. Amid geopolitical uncertainties, gold’s price fluctuations highlight its role as a safe-haven asset.
Investment Strategies and Currency Trends
With Gold surging past a new record of $4,200, the clear move is to position for continued upward momentum driven by the US-China trade uncertainty. We should consider buying call options on gold futures or related ETFs, targeting strikes around $4,250 or higher for the coming weeks. Recent data from the CME Group shows open interest for December 2025 gold calls has already jumped 20% this month, confirming strong bullish sentiment.
The US Dollar’s weakness is the dominant theme, and we expect this to continue as long as geopolitical tensions are high and the Fed remains neutral. Buying put options on the Dollar Index (DXY) provides a direct way to trade this view, especially as it has broken below the key 100.00 psychological level, a sharp reversal from the 103.00 range we saw earlier this year. The CBOE Volatility Index (VIX) has also climbed back over 20, a level historically associated with sustained dollar weakness.
The Japanese Yen is acting as a primary safe-haven, pushing USD/JPY lower toward 151.00. We see an opportunity in buying put options on this pair, as this flight to the Yen mirrors historical patterns during global stress, such as the market turmoil back in 2023. Recent Commitment of Traders reports show a significant increase in net-long positions on the Yen, suggesting institutional money is also betting on its strength.
Currencies with hawkish central banks, like the Australian Dollar, are gaining an extra lift from the weak US Dollar. The RBA’s recent commentary on stronger inflation gives AUD/USD a solid fundamental backing for a continued rebound. We can use call options on AUD/USD to play this trend, as Australia’s latest quarterly CPI figure of 3.8% gives the RBA little reason to soften its stance.
