【Evening Session】The dollar rebounded strongly and gold retreated​

Gold:

The U.S. government shutdown continues to unfold, with the Senate rejecting the funding bill for the seventh time. President Trump has threatened to slash Democratic programs, while Republican leaders have denied considering drastic measures. Meanwhile, the U.S. Embassy in NATO recently indicated potential transfer of partial military capabilities to Ukraine. Despite the Gaza ceasefire agreement, uncertainties persist regarding the Russia-Ukraine conflict, which risks escalation. The ongoing government shutdown is also expected to heighten market risk aversion.

China's central bank reported gold reserves of 74.06 million ounces (approximately 2,303.523 tons) at the end of September, marking a 40,000-ounce increase from the previous month and the 11th consecutive monthly rise in gold purchases. According to data from the World Gold Council, gold ETF inflows reached $64 billion during the first three quarters of this year, with $26 billion flowing into the sector in Q3 alone. September saw a record $17.3 billion in monthly inflows, setting a new benchmark for gold investment activities.

Chen Yu, senior analyst of Zhisheng Research (exclusively invited by Plotio), said the Fed's internal disagreement over further rate cuts in the short term could lead to a correction in gold prices. However, against the backdrop of the dollar's credit being heavily discounted, the trend of gold prices remains bullish.

Technical: On the daily chart, the last session saw a pullback from high and closed in negative territory, forming a bearish engulfing pattern. Short-term caution is warranted against further gold price pullback risks, with attention on the 4005 dollar resistance level above today.

Crude Oil:

The oil market has been pessimistic recently, with the main positive factor focusing on the progress of the Russia-Ukraine conflict. The U.S. ambassador to NATO said that the possible transfer of some U.S. military capabilities to Ukraine could lead to an escalation of the conflict, which is a major positive for oil prices.

However, from the perspective of supply and demand dynamics, the risk of oversupply in the crude oil market remains elevated. OPEC+ has increased production by 137,000 barrels per day since October, signaling its gradual withdrawal from the April 2023 agreement to cut output by 1.65 million barrels per day. Meanwhile, oil production in countries like Brazil and Guyana continues to grow. On the demand side, after the peak consumption season in the U.S. has ended and with weak economic data from the country, demand recovery has fallen short of expectations. This suggests that a supply surplus in the crude oil market is highly likely to occur in the coming fourth quarter and throughout 2026.

Technical Analysis: On the daily chart, the previous trading session saw a decline from high levels with a bearish candlestick, indicating short-term market weakness. Technical indicators show that the recent rebound encountered resistance at the 20-day moving average, raising concerns about further downside risks. Key support levels to watch are $60 on the lower side, while resistance lies around $62.78 on the upper side.

U.S. Dollar:

Recent discussions among Federal Reserve officials have revealed diverging views on interest rate cuts. Chair Jerome Powell expressed support for further reductions, citing potential continued slowdown in the U.S. labor market. Vice Chair Richard Bullard cautioned against premature moves, emphasizing that current rates remain moderately accommodative. In contrast, Fed Governor Lael Kashkari echoed Bullard's cautious stance.

Different views within the Fed on the path of subsequent easing may dampen market optimism about a sharp fed rate cut and be short-term negative for the dollar.

Recent senior government moves have led to further depreciation of the yen, which has helped push the dollar index higher. However, Japan's Liberal Democratic Party president Yoshiyuki Takahiro said he has no intention of triggering excessive depreciation of the yen, and the dollar's short-term upside may be limited.

Technical Analysis: On the daily chart, the market extended its upward momentum with a bullish candlestick in the previous session, indicating sustained strength in the US Dollar Index. Technical indicators show the 20-day moving average has turned upward and formed a golden cross with the 62-day MA, suggesting potential for further gains. Key support level to watch today is the 99 area.

Nikkei 225:

The daily chart shows the market consolidating at high levels for several consecutive sessions, with short-term downward momentum indicating potential price retracement of the previous gap-up opening. Technical indicators currently show the market trading above the 20-day moving average, maintaining overall bullish dominance. Key support levels to watch today include the 47,200 support zone.

Copper:

The daily chart shows a bullish candlestick closing higher from the previous session, indicating strong momentum with potential for further gains. Technically, the market has maintained an upward trend with recent consolidation, and this bullish pattern is expected to continue in the near term. Key indicators reveal the 20-day moving average has turned upward, signaling a bullish bias. Investors should closely monitor support levels around $4.98 during today's trading session.

10 October Market Snapshot:

1.Recently, the U.S. Treasury Department announced sanctions against more than 50 entities related to Iranian oil.

2.U.S. Treasury Secretary Steven Bessonnet said the United States directly purchased Argentine pesos and finalized a $20 billion currency swap framework with the Central Bank of Argentina.

3.The Fed's Daly recently said that after the rate cut in September, the policy will remain moderately tight. The Fed is also expected to implement more rate cuts as part of risk management.

10 October Key Data/Events Preview:

1.22:00, US October one-year inflation rate forecast;

2.22:00, the University of Michigan's preliminary consumer confidence index for October;

3.At 01:00 the next day, Federal Reserve Chairman Mousalem delivered a speech.

[Important Disclaimer:The above content and views are provided by Zhisheng, a third-party cooperative platform, for reference only and do not constitute any investment advice. Investors who trade based on this information shall bear their own risks.]

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