Spot Gold prices are facing pressure due to China’s recent decision to end a VAT rebate on gold sales. This change increases costs for consumers and affects both investment and non-investment gold bought from the Shanghai Gold Exchange.

The EUR/USD pair remains weak, hovering around 1.1500 after a recent decline as the US Dollar maintains its strength. Attention shifts to upcoming US manufacturing data, which could influence further movements.

The Pound Struggles Against The Dollar

GBP/USD is under pressure, trading near mid-1.3100s amidst economic concerns in the UK. The US Dollar’s strength, bolstered by Federal Reserve actions, challenges the Pound’s attractiveness.

Currently, Gold maintains its position around $4,000 despite recent downturns. US Treasury bond yields and Federal Reserve comments constrain gold’s recovery expectations, while the market awaits pertinent US data releases.

In the cryptocurrency market, meme coins like Dogecoin and Shiba Inu are experiencing downward trends. Reduced activity from large wallet holders contributes to increased supply pressure.

Cardano (ADA) sees a decline below $0.58 following weak performance. On-chain activity is decreasing, and trader sentiment suggests a growing bearish outlook.

Gold Market Outlook And Derivative Strategies

Given the date of November 3, 2025, we see the new Chinese tax policy on gold as a significant headwind. This move effectively raises the price for the world’s largest consumer base, which we know accounted for over 1,000 tonnes of demand in 2024 alone. This new friction on demand, coupled with a strong US dollar, makes a sustained push above $4,000 per ounce unlikely in the near term.

Derivative traders should consider strategies that benefit from downward pressure or a cap on gold’s price. Buying put options with strike prices below $4,000 or establishing bearish call spreads could be effective ways to position for a potential slide. Looking back at the price action in 2022, we saw how a hawkish Fed and a strong dollar created sustained weakness for gold, a pattern that appears to be repeating now.

The strength in the US dollar is the other major factor we are watching. With the latest October 2025 inflation data still showing a 3.1% annual rate, well above the Fed’s target, officials have little reason to soften their hawkish tone. This environment supports continued dollar strength against currencies like the Euro and the Pound, especially as US Treasury yields remain elevated.

For currency traders, this reinforces the case for shorting EUR/USD and GBP/USD futures, or buying put options on these pairs. Implied volatility may increase ahead of the upcoming US ISM Manufacturing PMI data release. A strong manufacturing number would likely cement expectations for higher-for-longer US rates, potentially pushing EUR/USD decisively below the 1.1500 level.

We are also seeing clear signs of a broader risk-off mood developing across markets. The sharp declines in speculative assets like Dogecoin and Cardano are not isolated, as on-chain data shows large investors have been reducing their exposure for weeks. This aversion to risk typically benefits the US dollar and puts further pressure on assets priced in it, including gold.

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