Insights 
VT 
Gold Prices and Stellar Growth Potential
Gold prices climbed to over three-week highs, reaching $4,213, amid expectations of a dovish US Federal Reserve decision in December. Stellar (XLM) prepared for potential growth, approaching its resistance level at $0.297, with a possible breakout on the horizon.
In the US, optimism in the market supported risk sentiment as European indices performed well, though the FTSE 100 showed a small loss. Hyperliquid (HYPE) maintained a position above $38 after suffering a loss linked to Hyperliquid Provider (HLP).
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With Australian full-time employment jumping by 55.3K, we are looking at a clear sign of economic strength that the Reserve Bank of Australia cannot ignore. This makes the prospect of an interest rate cut anytime soon highly unlikely, especially given the RBA’s recent stance. Derivative traders should consider this a bullish signal for the Australian dollar.
The RBA held its cash rate at 4.35% just last week, and with the latest data from the Australian Bureau of Statistics showing annual inflation still tracking at a stubborn 3.8%, today’s strong jobs report reinforces a hawkish outlook. Given this, we see value in buying AUD/USD call options expiring in early 2026, positioning for a currency strengthened by sustained high interest rates. This is a strategy to gain from expected upside while capping potential losses.
The Impact of US Federal Reserve Uncertainty
This Australian strength is magnified when placed against the ongoing weakness of the Japanese Yen, which continues to suffer from the Bank of Japan’s loose monetary policy. Looking back, this is a carry trade dynamic we saw play out for much of 2023 and 2024. The AUD/JPY cross is already testing its yearly highs, and traders could use bull call spreads to target further gains as this policy divergence widens.
Meanwhile, the market seems conflicted on the US Federal Reserve’s next move, creating uncertainty for the US dollar. Gold prices are rising on bets the Fed will have to cut rates, a sentiment reflected in the CME FedWatch Tool which shows a 45% probability of a rate cut by March 2026. This environment of uncertainty suggests that buying volatility through straddles on major pairs like the EUR/USD could be a prudent way to trade the coming weeks.
