Insights 
VT 
In October, Eurozone Sentix Investor Confidence stood at -5.4, an improvement from the previous -9.2. This change comes amid various economic activities affecting currencies and commodities globally.
Gold has seen fluctuations, surging to $3,950 due to safe-haven demand amidst US political tension. The price has slightly decreased to around $3,930.
Currency Movements
The GBP/USD pair faced losses, remaining below mid-1.3400s, impacted by a stronger USD. Meanwhile, the EUR/USD bounced back to 1.1680, driven by renewed buying pressures and political concerns in France.
Gold has surpassed Bitcoin in Q3, reaching record highs. Meanwhile, Bitcoin saw only modest returns since mid-August, affecting Q4 forecasts.
FXStreet has introduced a new design to support traders, aiming to address editorial and business challenges. Meanwhile, Aptos (APT) remains stable, showing potential for growth driven by retail demand and increased stablecoin issuance.
With gold hitting record highs near $3,950, we are seeing a classic flight to safety driven by the US government shutdown. The expectation of Federal Reserve interest rate cuts is adding fuel to this fire, making precious metals a key focus. Implied volatility on gold derivatives has likely surged, presenting opportunities for traders to use options to manage risk or speculate on further upside.
Market Trends and Strategies
This mirrors the investor behavior we saw during the 2020 global pandemic, when central bank easing and uncertainty sent gold climbing over 25%. However, the current US political deadlock appears to be creating even more aggressive safe-haven demand. We believe this trend will persist as long as Washington remains at a standstill, sustaining momentum in gold futures.
The US Dollar’s strength is the dominant theme in forex, pushing pairs like EUR/USD and GBP/USD to new lows. Historically, prolonged shutdowns increase market anxiety, and we can look back at the 2018-2019 shutdown, the longest in history at 35 days, which caused significant initial market jitters. Call options on the US Dollar Index (DXY) are likely to be in high demand as a direct hedge.
We see the Euro as particularly weak, even with the slightly improved Sentix investor confidence reading from this morning. Renewed political tensions in France are weighing on the currency, which is struggling to stay above the 1.1650 mark. Buying medium-term put options on the EUR/USD could be a prudent strategy to protect against further declines.
The Pound Sterling is performing even worse, failing to hold the mid-1.3400s as it underperforms most major currencies. This suggests that UK-specific issues are amplifying the pressure from the strong dollar. We see a clear path down toward the 1.3400 level, making put spreads on GBP/USD an attractive way to position for more weakness.
