Insights 
VT 
The United States Commodity Futures Trading Commission (CFTC) reported gold net positions at $162.5K, a slight decrease from the previous $163.3K. The information provided is for informational purposes and not a recommendation for trading gold or any other asset.
The EUR/USD pair stabilised above 1.1250 after a recent decline but is projected to record minor weekly losses. Meanwhile, the GBP/USD is showing recovery, moving towards 1.3300 as the US Dollar halts its gains.
Gold prices amidst geopolitical tensions
Gold prices rose above $3,300 amidst increased geopolitical tensions from conflicts such as the Russia-Ukraine war and the Middle East. Investors are turning to gold as a safe haven, with the ongoing India-Pakistan tensions also contributing to this trend.
Upcoming economic events focus on the US Consumer Price Index (CPI) for insights into tariff impacts, alongside US-China trade talks. Additionally, US Retail Sales and GDP reports from the UK and Japan will be watched closely.
The UK-US trade deal aims to lower tariffs without affecting UK-EU negotiations. However, the likelihood of a broader reduction in US tariffs remains uncertain.
The CFTC figures revealed a modest drop in speculative gold positions, now sitting just below the previous reading. What this illustrates is somewhat restrained enthusiasm from institutional participants in gold futures, which may suggest a pause in bullish sentiment. However, it’s not yet a reversal. We find it more prudent to monitor volume and open interest alongside these counts rather than relying on positioning alone.
In the foreign exchange markets, the euro has established a narrow shelf above 1.1250 but appears to be lacking sustained upward pressures. If the pair fails to breach new highs in the near term, retracement towards 1.1200 could follow. Sterling, on the other hand, found near-term strength and is pointing higher, with relief largely stemming from the Dollar losing momentum. While this rebound is not yet robust, intraday flows are supporting further attempts towards 1.3300 in the days ahead.
Volatility in current geopolitical environment
Gold’s surge past $3,300 per ounce reflects heightened buying due to geopolitical friction. With tensions simmering across multiple regions—particularly Eastern Europe and parts of Asia—there’s been an evident flight to safety. In previous such environments, we’ve noticed how swiftly positioning in safe-haven assets can shift, and rightly so. Still, this level of demand could flatten should headlines retreat or risk appetite increase. The current pricing embeds a moderate risk premium, not an excess. Volatility in these contracts may remain elevated in the near term.
Turning to upcoming data, the release of US CPI remains key. Inflation figures will not only highlight domestic cost pressures but also offer insight into how tariffs are influencing consumer prices. Markets could reassess future rate paths depending on how far CPI deviates from consensus. In the recent trend, any stickiness in core inflation often sees swaps markets react faster than spot foreign exchange, and that’s a pattern worth watching.
Retail sales figures from the US, alongside GDP prints from Britain and Japan, will provide clarity around demand strength and global recovery trajectories. We’ll be placing attention squarely on real spending behaviours and domestic consumption gauges, which tend to anticipate currency direction better than sentiment surveys.
On trade talks, progress towards a fresh UK-US agreement is being handled delicately due to its potential overlap with EU dynamics. While the negotiations hint at easing tariffs, there’s limited conviction that Washington is prepared to make broad concessions. We’ve observed previous rounds break down over digital taxes and agricultural access, and those are likely to resurface.
From a derivatives perspective, these developments create multiple moving parts. Contracts tied to dollar strength may underperform if inflation slows or if trade dialogues regain traction. Conversely, protection against spikes in commodities could retain a premium if geopolitical flashpoints persist or broaden.
Trading strategies relying heavily on long-dollar exposure may need to be adjusted if the greenback fails to attract haven flows or if domestic inflation fails to accelerate. Similarly, traders using gold derivatives should revisit short-term gamma exposure, especially in volatile front-month options, which are seeing repricing after the recent spike.
Momentum is active, but directionality hinges on a delicate set of inputs that we know can shift quickly. Greater attention on implied volatility across asset classes is advised, as we often spot early repositioning in skew metrics before price reacts meaningfully.
It would be unwise to ignore the tightening link between physical market developments and futures. With participation levels steadying in metals and FX markets, liquidity remains decent, yet price sensitivity to shocks stands notably higher than earlier in the year.
