Insights 
VT 
Gold as a Store of Value
Gold serves as a store of value and safe haven amidst inflation and currency depreciation. Central banks, particularly from China, India, and Turkey, increased reserves by 1,136 tonnes in 2022, the highest on record.
Gold inversely correlates with the US Dollar and Treasuries. A weak Dollar raises gold prices, while a strong Dollar keeps them in check. Geopolitical instability and recession fears also drive gold’s appeal. As a non-yielding asset, gold rises with lower interest rates, while higher rates typically depress its value.
Gold’s price movements hinge on US Dollar trends due to its pricing in dollars (XAU/USD), with a weak Dollar likely to enhance gold’s appeal.
Bullish Market Sentiment
Given gold’s firm position above the $4,000 psychological level, we see this as a strong floor for the coming weeks. The failure of sellers to push the price down suggests that bullish sentiment remains dominant. Derivative traders should view this consolidation as a potential launching pad for a test of the $4,060 all-time high.
This upward momentum is supported by fresh economic data, as last week’s Non-Farm Payrolls report showed job growth slowing to just 95,000, raising expectations for Federal Reserve easing before year-end. This weak labor data reinforces the idea that lower interest rates are on the horizon, which historically benefits non-yielding assets like gold. The U.S. Dollar Index has subsequently fallen to a three-month low of 101.50, providing a direct tailwind for the metal.
Geopolitical risks are also keeping a firm bid under gold, acting as a crucial safe-haven asset. The continued fiscal uncertainty in France, following its sovereign debt downgrade earlier this year, and the Bank of Japan’s ongoing struggles with yen stabilization are pushing global reserve managers towards gold. This institutional demand creates a stable base of buyers in the market.
Looking back, we remember how central bank buying throughout 2024 built the foundation for this rally when prices were consolidating around $2,800. The latest data from the World Gold Council confirms this trend continues, showing a net purchase of over 220 tonnes by central banks in the third quarter of 2025. This sustained accumulation suggests that major players see long-term value at these elevated levels.
With this backdrop, using options to structure bullish positions appears prudent. Buying call spreads could limit upfront costs while targeting a move towards the $4,100 resistance area. Alternatively, selling out-of-the-money put options with strike prices below the key $3,940 support level could be a way to collect premium while betting that the current uptrend will hold.
