Insights 
VT 
China’s Consumer Price Index (CPI) decreased by 0.3% year-on-year in September, missing the forecast of a 0.1% decline. This ongoing downward trend raises concerns over domestic demand and economic growth, potentially affecting future policies by the People’s Bank of China.
In currency markets, the EUR/JPY dropped to near 175.50 amid increased demand for safe havens. Meanwhile, the EUR/USD rose above 1.1600 following Federal Reserve Chair Jerome Powell’s hints at potential rate cuts.
Gold Prices and Cryptocurrency Standstill
Gold prices have been volatile, though they are still driven by US-China trade tensions and possible Federal Reserve rate cuts. The US Dollar’s weakness contributed to gold nearing the upper boundary of a rising channel on the daily chart.
Bitcoin, Ethereum, and Ripple’s recovery efforts paused at key technical resistance levels. Traders watch closely to see if these cryptocurrencies can maintain recovery or face renewed selling pressures.
Silver is gaining attention as traders shift focus from gold amid perceived lack of policy clarity. Gold recently surged past $4,000, but profits from this rise are now moving into silver investments.
Analyst Karim AbdelMawla from 21Shares suggests the crypto bull market could extend for another six to twelve months, reflecting ongoing market interest and investment in digital assets.
Deflationary Pressure and US Dollar Weakness
We are seeing persistent deflationary pressure from China, with the September CPI coming in negative again at -0.3%. This trend, which we first saw emerge as a major concern back in late 2023 and early 2024, continues to signal weak global demand. Derivative traders should consider buying put options on indices with heavy exposure to Chinese manufacturing to hedge against a further slowdown.
The US Dollar’s weakness is the main event, with the DXY struggling below 99.00 after the Fed signaled more rate cuts are possible. This is a major reversal from the hawkish stance of 2022-2023 when the index peaked above 114. We should consider buying call options on EUR/USD and GBP/USD to ride this clear momentum in the coming weeks.
Gold’s surge toward the $4,000 mark is a direct result of the weak dollar and global uncertainty. With the metal so high, a bull call spread could be a smart way to capture further upside while protecting against the risk of a sharp pullback. Silver is also catching a bid, and buying silver futures or call options offers a potentially more volatile way to play this same theme.
The crypto rally, which gained significant momentum after the Bitcoin ETFs were approved back in January 2024, seems to be taking a breather. While long-term sentiment is positive, the next few weeks could see major price swings as it tests technical barriers. Using an options strategy like a straddle on BTC or ETH could be effective to profit from a big price move, regardless of the direction.
