The UK’s S&P Global Construction PMI for September was recorded at 46.2, slightly surpassing the predicted 46.1. This marginal increase indicates a less pessimistic outlook than forecasted in the construction sector.

Gold prices fell back to $3,930 per troy ounce after hitting a peak of $3,950. The metal remains in demand as a safe haven amid continuing uncertainties, such as the potential US government shutdown.

The Struggle of GBP/USD

The GBP/USD pair has struggled to overcome losses as it found stability below the mid-1.3400s. A strong US Dollar has influenced the pair’s inability to capitalise on previous upward movements.

In the third quarter, gold outperformed Bitcoin, reaching record highs and posting significant gains. Meanwhile, Bitcoin made modest returns, showing a subdued performance compared to gold.

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Aptos (APT) shows potential for growth despite a slight decline of 1% in its price. Factors such as increased retail demand and stablecoin issuance may contribute to its anticipated growth.

Gold’s Resilience Amidst Uncertainty

Gold has blown past $3,900, showing its value as a safe haven during this US government shutdown. We see this move being supported by expectations of Federal Reserve interest rate cuts and the political uncertainty stateside. This rally builds on the strong foundation of central bank buying that has been a consistent feature of the market since late 2023, when net purchases hit near-record levels.

Despite the shutdown, the US Dollar is showing remarkable strength, pushing EUR/USD down towards 1.1650. This isn’t about US economic might but rather a flight to liquidity as political troubles brew in France. For now, the dollar remains the world’s primary safe-haven currency, a pattern we also observed during the 35-day shutdown back in 2018-2019 when the Dollar Index remained resilient.

The pound sterling is particularly vulnerable, with GBP/USD struggling to hold the mid-1.3400s. The latest UK construction PMI of 46.2 confirms the sector is in a deepening contraction, a trend we’ve seen worsen through 2025. With UK inflation, last reported at 2.8%, still stubbornly above the Bank of England’s target, we face a difficult stagflationary environment that will likely weigh on the currency.

In the coming weeks, we should prepare for higher volatility across the board, making options strategies attractive. The ongoing US political situation suggests that implied volatility may remain elevated, presenting opportunities in VIX derivatives. We see the path of least resistance as being long the US dollar against both the Euro and Pound Sterling.

For gold, call options or bull call spreads could be used to capture further upside as uncertainty continues. Conversely, we believe buying puts on GBP/USD is a clear way to position for a potential move toward the 1.3400 level. The weak UK economic data provides a strong fundamental reason for this bearish stance.

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