Spot gold approaches the 4060 mark, the U.S. Senate rejects the proposal to end the government shutdown for the sixth time, driving safe-haven demand

Basic news

On Thursday (October 9, Beijing time), spot gold was trading around US$4,020 per ounce. The spot gold weekly umbrella exceeded the US$4,000 per ounce mark for the first time, continuing its record-breaking rise to US$4,059.07 per ounce. Increasing geopolitical and economic uncertainty, as well as market expectations for U.S. interest rate cuts, have prompted investors to rush into safe-haven assets; U.S. crude oil traded around $62 per barrel, with oil prices hitting a one-week high on Wednesday. Traders expected that the lack of progress in the Ukraine peace agreement will keep sanctions on Russia in effect, while reports showed growth in U.S. oil consumption.

Stock Market

U.S. stocks closed higher on Wednesday, boosted by technology stocks. The U.S. government shutdown led to a lack of economic data. Investors turned to the minutes of the Federal Reserve's latest policy meeting for clues on the outlook for interest rates.

The Nasdaq index, which is dominated by technology stocks, was among the top gainers, driven by large technology stocks related to artificial intelligence. These stocks have been the main driving force of the market's rise this year. The S&P 500 and Nasdaq hit new closing highs, while the Dow was essentially flat.

Chip stocks performed particularly well, while energy, consumer staples and homebuilder sectors lagged. A report from the Mortgage Bankers Association (MBA) showed that demand for home purchase loans fell 4.7% last week despite a fall in interest rates.

Bill Merz, head of capital markets research at Bank of America, said, “The market theme is still radical growth, and transactions related to artificial intelligence are announced one after another. Anything related to AI has received great attention.

As AI continues to gain popularity,Against the background of the support, rising domestic and geopolitical uncertainty in the United States pushed gold to exceed the US$4,000 per ounce mark, and investors bought gold to hedge risks.

Merz added that over the past few years we have seen that stocks and safe-haven assets can rise simultaneously, in part because of the dual reality that fundamentals currently support higher-than-normal valuations and that deficit spending must be financed through new debt.

The U.S. government shutdown has entered its eighth day. The gridlock in Congress means that market participants will lack official economic indicators in the short term. The market can only wait for the third-quarter earnings season starting next week to provide clues.

In the absence of data, investors are focused on the third-quarter earnings season starting next week and the minutes of the Federal Open Market xn--xm-5s9cx14e.committee (FOMC) September meeting to determine whether the Federal Reserve will further cut interest rates.

The minutes of the meeting showed that opinions within the FOMC were divided. Policymakers expressed concerns about rising labor market risks, but still remained vigilant about inflation. While "most policymakers believe further policy easing may be appropriate for the remainder of the year," the timing and pace of further action remains uncertain.

Zachary Hill, head of portfolio management at Horizon Investments, said that the current focus of discussion is the extent of the Fed's interest rate cuts and whether the policy is still restrictive. More broadly, the Fed's lack of public sector economic data while the government shutdown continues makes its already difficult job more xn--xm-5s9cx14e.complicated. ”

Financial markets currently predict a 92.5% chance that the Federal Reserve will cut interest rates by 25 basis points at the end of this month’s policy meeting. The meeting is scheduled for October 29.

The Dow Jones Industrial Average fell 0.00% to 46,601.78 points; the S&P 500 rose 0.58% to 6,753.72 points; Nasdaq The Dak Index rose 1.12% to 23,043.38 points.

Among the 11 major sectors of the S&P 500, technology stocks led the way, and energy stocks fell the most.

Surge in gold prices boosted U.S.-listed gold miners Newmont and GoldFields, which rose 1.7% and 3.7% respectively. .1%, and many brokerages raised their target prices. AMD jumped 11.4%, posting its third consecutive day of gains. The chipmaker's stock price has risen more than 43% this week.

Gold Market

Gold prices broke through the $4,000 per ounce mark for the first time on Wednesday, continuing their record-breaking gains. Rising geopolitical and economic uncertainty, as well as market expectations for U.S. interest rate cuts, have prompted investors to pile into the safe-haven asset.

The price of silver also hit a record high that day, driven by the rising price of gold, attracting investors to buy.

Spot gold rose 1.7% to US$4,050.24 per ounce; US December gold futures settlement price rose 1.7% to US$4,070.5. Spot silver rose 3.2%, at US$49.35 per ounce, and once hit an all-time high of US$49.57 during the session.

Matthew Piggott, head of gold and silver at MetalsFocus, said that the strong trend in gold prices reflects that the current macroeconomic and geopolitical background is extremely conducive to safe-haven assets, and also reflects the market's concerns about other traditional safe-haven assets.

After rising 27% in 2024, gold prices have risen 52% so far this year, becoming one of the best-performing assets in 2025, rising more than global stocks, while the dollar and crude oil fell. Silver prices are up 71% so far this year, benefiting from the same bullish factors as gold, while tight supply in the spot market is also providing support.

Behind the rise in gold and silver is the resonance of multiple factors, including expectations of U.S. interest rate cuts, rising political and economic uncertainty, strong buying by central banks, increased inflows of ETF funds, and the weakening of the U.S. dollar. Piggott added that given that these factors will continue into 2026, we currently see no catalyst for a significant correction in gold prices. Therefore, we expect gold prices to continue rising this year and are expected to challenge the $5,000 per ounce mark.

According to data from the World Gold Council (WGC), global gold ETF inflows have reached US$64 billion this year, with September alone setting a single-month record of US$17.3 billion. Analysts pointed out that the "fear of missing out" (FOMO) sentiment is also fueling this rally.

From a technical perspective, gold's relative strength index (RSI) has reached 88, indicating that the asset is overbought.

HSBC on Wednesday raised its average silver price forecasts for 2025 and 2026 to US$38.56 and US$44.50 per ounce respectively, citing high gold prices, recovering investor demand and expected increased trading volatility.

The rally also spread to other precious metals. Platinum rose 2.8% to $1,660.78 an ounce; palladium rose 7.2% to $1,434.25 an ounce, a new high since June 2023.

Oil Market

Oil prices rose more than 1% on Wednesday, hitting a one-week high, as traders expected a lack of progress on a Ukraine peace deal to keep sanctions on Russia in effect, while a weekly report showed growth in U.S. oil consumption.

Brent crude oil futures rose 1.2% to close at $66.25 a barrel. U.S. crude oil rose 1.3% to close at $62.55. This is the highest closing price for Brent crude oil since September 30 and the highest closing price for U.S. crude oil since September 29.

A senior Russian diplomat says the impetus for a peace deal with Ukraine has largely been exhausted. Analysts say the peace deal could allow more Russian oil to flow to global markets. U.S. energy data shows that Russia will be the world's second-largest crude oil producer after the United States in 2024.

According to Interfax (Interfax reported that Russian Deputy Prime Minister Novak said on Wednesday that Russia was gradually increasing oil production despite sanctions and was close to reaching the OPEC+ production quota last month.

Russia’s energy industry has been under severe pressure over the past two months due to a wave of drone attacks in Ukraine, mainly targeting oil refineries.

Investors expect that the Federal Reserve will continue to cut interest rates, which also provides support for crude oil futures. Investors have been deprived of most U.S. economic data amid the U.S. government shutdown.

Meeting minutes from September 16 to 17 showed that Fed officials agreed at their most recent policy meeting that risks to the U.S. job market had grown enough to support a rate cut, but many policymakers remained wary of high inflation.

According to the Chicago Mercantile Exchange Group (CME Group) FedWatch tool, the Fed is widely expected to cut interest rates by 25 basis points at its October 28-29 meeting. Cutting interest rates could boost economic growth and oil demand.

Oil markets held on to gains as traders focused more on a U.S. report showing an increase in oil consumption last week than on a larger-than-expected build in crude inventories.

The U.S. Energy Information Administration (EIA) said that energy xn--xm-5s9cx14e.companies’ crude oil inventories increased by 3.7 million barrels in the week ended October 3. The figure was higher than analysts' forecasts for a 1.9 million-barrel rise and higher than market sources citing data from the American Petroleum Institute (API) on Tuesday saying crude inventories rose by 2.8 million barrels last week. However, the EIA also said that the total weekly supply of petroleum products, which represents U.S. oil consumption, increased to 21.99 million barrels per day last week, the most since December 2022.

Foreign Market

The yen hit its lowest level against the U.S. dollar since mid-February on Wednesday as worries about Japan's increase in fiscal spending intensified, while the euro fell due to uncertainty about France's political situation.

The U.S. federal government remains in a state of shutdown, and the lack of government economic data may benefit the dollar. Analysts said otherwise the data would add to market volatility and could signal a weakening economy.

Takaichi Sanae's unexpected victory in Japan's ruling party leadership election over the weekend hit the yen on expectations that the government will step up stimulus.

Vassili Serebriakov, foreign exchange and macro strategist at UBS Group, said: "The market believes that the high-rise city government will adopt policies more similar to those during the Abenomics period. In other words, expansionary fiscal policy and looser monetary policy. But at present, the specific policies that will be adopted are obviously still unknown.”

The dollar rose 0.53% against the yen at 152.7 yen, hitting its highest level since February 14 at 152.99, rising from 147.44 last Friday. The dollar received a boost from the lack of U.S. government economic data that could signal a slowdown.

WednesdayReleased minutes of the Federal Reserve's September meeting showed that officials agreed that risks to the U.S. job market had increased enough to support a rate cut, but many officials remained wary of high inflation.

CME’s FedWatch tool shows that traders generally expect the Federal Reserve to cut interest rates by 25 basis points at the October 28-29 meeting, and the probability of another rate cut in December is 78%. The euro fell 0.33% against the dollar in late New York trading at $1.1616, having earlier hit $1.1597, its lowest since August 27.

France's caretaker Prime Minister Le Corny said on Wednesday that despite the political crisis, an agreement on the 2026 budget may finally be reached.

Le Corny, France's fifth prime minister in two years, submitted his and the government's resignation just hours after announcing the cabinet lineup on Monday, becoming France's shortest-term government in modern times. He said on Wednesday that President Macron may nominate a new prime minister within the next 48 hours, and the euro pared its losses in response.

The New Zealand dollar fell 0.33% against the U.S. dollar to $0.5779, having earlier hit its lowest since April 11 at $0.5735. The Reserve Bank of New Zealand unexpectedly cut interest rates by 50 basis points and said it would adopt more easing policies in the face of recent deterioration in economic data.

International News

The U.S. Senate once again failed to pass a proposal to fund the government and end the shutdown

The U.S. Senate once again rejected the draft government temporary financing legislation, and the Trump government shutdown (shutdown) entered its second week. At around 12:50 ET, the bill backed by Democrats failed in a 47-52 vote. Soon after, voting began on the Republicans' version. These close stopgaps had failed on five previous ballots. Democrats want health care included in any appropriations bill, especially an extension of Obamacare subsidies that are set to expire at the end of the year.

Gaza ceasefire negotiations continue, Hamas demands "international guarantees" for the implementation of the agreement

On the 8th, the Palestinian Islamic Resistance Movement (Hamas) and Israel continued to hold a new round of ceasefire negotiations in the Gaza Strip in Sharm el-Sheikh, Egypt. According to reports from Qatar's Al Jazeera and other media, during the previous day's negotiations, Hamas put forward several demands. First, Israel's occupation of the Gaza Strip must be xn--xm-5s9cx14e.completely ended, which must be internationally guaranteed; second, the release of Israeli detainees should be linked to the time for Israel's full withdrawal. Israeli officials have yet to xn--xm-5s9cx14e.comment on the progress of the negotiations. The day before, Hamas chief negotiator Khalil Haya said in an interview with Egypt's Cairo News TV that the Hamas delegation came to Egypt with a clear goal, which is to immediately stop the conflict, ensure Israel's withdrawal from the Gaza Strip, and reach an agreement on the exchange of detained persons. He stressed that Israel must xn--xm-5s9cx14e.completely end its occupation of the Gaza Strip, and this must be "real guaranteed" by the ceasefire mediators.

U.S. Capitol Hill: The budget deficit last fiscal year was 1.8 trillion U.S. dollars

The U.S. Congressional Budget Office (CBO): The U.S. budget surplus in September is expected to be 164 billion U.S. dollars. The budget deficit for fiscal year 2025 (the 12 months to September 30) is expected to be $1.809 trillion, xn--xm-5s9cx14e.compared with a deficit of $1.817 trillion for fiscal year 2024. In fiscal year 2025, fiscal revenue increased by 6% to US$5.22 trillion; fiscal expenditure increased by 3% to US$7.035 trillion.

The minutes of the Federal Reserve meeting cautiously hinted at further interest rate cuts this year

Federal Reserve officials are increasingly divided over the future direction of interest rates, but most believe that further interest rate cuts are necessary this year. Minutes of the Fed's September meeting released on Wednesday showed the xn--xm-5s9cx14e.committee was grappling with conflicting economic signals and struggling to agree on which of stubborn inflation and a weak labor market was the most pressing issue. Minutes of the meeting showed that Fed officials agreed that a rate cut was necessary in light of recent weak employment data, but officials were divided on the future path. However, the minutes of the meeting showed that "most people believed that further easing of policy may be appropriate for the remainder of the year." However, some policymakers "noted that financial conditions, judging from several indicators, suggest that monetary policy is not particularly restrictive, and they believe that a cautious approach is necessary." Based on September forecasts, 10 Fed officials suggested they expected two more rate cuts this year, and nine thought there should be one or fewer cuts.

Zakharova: If the EU transfers frozen Russian assets to Ukraine, Russia will respond strongly

On the 8th local time, Russian Foreign Ministry spokesperson Zakharova said that if the EU transfers frozen Russian assets to Ukraine, Russia will respond strongly. She also said that if the United States provides Tomahawk missiles to Ukraine, it will cause irreparable damage to Russia-U.S. relations.

The German government has raised its economic growth forecast for 2025 and is expected to accelerate growth next year

According to the updated government forecast, the German economy is expected to grow slightly by 0.2% this year, and with the support of tens of billions of euros in fiscal stimulus, economic growth is expected to increase to 1.3% in 2026. The latest half-year forecast released by German Economy Minister Katherina Reiche on Wednesday was slightly more optimistic than the previous government's April forecast and was also in line with the outlook of Germany's main economic research institute. Reiche acknowledged that a "large part" of economic growth in the xn--xm-5s9cx14e.coming years will xn--xm-5s9cx14e.come from a surge in government spending, but warned that the effectiveness of stimulus measures "depends on whether investment can be realized quickly".

IMF President: Asset valuations are close to the levels during the Internet craze 25 years ago

IMF President Georgieva said that the rising demand for gold shows that "the resilience of the global economy has not yet been fully tested." She also pointed out that the current monetary gold holdings of various countries have exceeded one-fifth of the world's official foreign exchange reserves. Furthermore, sheIt also warned of "easy financial conditions" but did not specifically mention a particular market or country. Major U.S. stock indexes have hit record highs this month, driven by a boom in artificial intelligence and rising shares of technology xn--xm-5s9cx14e.companies. "Current asset valuations are approaching the levels seen during the dotcom craze 25 years ago," she said. "If there is a sharp market correction, tightening financial conditions may drag down global economic growth, expose potential risks, and make developing countries particularly difficult." Georgieva added that loose financial conditions "only cover up rather than reverse some of the weak trends, and the slowdown in job creation is one example." For the United States, she said that the federal budget deficit problem needs to be solved through a series of measures, including "taking sustained actions that go beyond discretionary spending"; at the same time, policies should be used to encourage household savings, such as expanding the scope of tax incentives related to retirement savings.

The Bank of England warned: The AI ​​stock bubble may trigger a "sudden correction" in global stock markets

The Bank of England warned that after stock prices reached levels xn--xm-5s9cx14e.comparable to those during the Internet bubble, the soaring valuations of artificial intelligence xn--xm-5s9cx14e.companies are exacerbating the risk of a "sudden correction" in global financial markets. The Bank of England noted that defaults in the U.S. auto credit market in recent months have heightened the risk of a market reversal, saying that these situations "confirm some of the risks in the market-based financial system that the Bank has been highlighting." Other risks include escalating political pressure on the Fed - which "could lead to a sharp repricing of dollar assets" - and uncertainty stemming from political standoffs in France and Japan - which could also disrupt debt markets. The Bank of England said a number of indicators showed "equity valuations appear stretched, particularly for technology xn--xm-5s9cx14e.companies focused on artificial intelligence". "This situation, coupled with rising concentration in market index stocks, makes the stock market particularly vulnerable if market expectations about the impact of AI turn pessimistic." This is the Bank of England's clearest warning to date that the AI-led market bubble may burst. In its financial stability report released in July, it only mentioned artificial intelligence from the perspective of the risks of financial institutions using AI technology.

Domestic News

Highway charging capacity reaches record high, green travel drives charging demand to surge

More and more tourists choose new energy vehicles for holiday travel, and charging stations in major service areas and scenic spots are also operating at full capacity. The reporter learned from the State Grid today that in the seven days before the holiday, the charging capacity of new energy vehicles on domestic highways exceeded 61.85 million kilowatt hours, setting a record high. On Meizhou Island in Putian, Fujian, 150,000 tourists visited the island in the seven days before the National Day and Mid-Autumn Festival holiday this year. According to statistics from the local power department, as of October 7, the average daily charging capacity of charging piles around the Meizhou Island scenic area reached 7,400 kilowatt hours, a year-on-year increase of 30%, which is 4.6 times that of normal days. Data shows that the number of searches for highway charging stations across the country increased by more than 12.5% ​​year-on-year during the Mid-Autumn Festival, and by more than 25% year-on-year from October 1 to 7.

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