GOLD: 50-day EMA Support Still Intact, Consolidation Phase May Be Healthy
Gold has not acted as a risk hedge during the past week, with spot selling off alongside equities and narrowing the gap to key support at the 50-day EMA ($3,932 today). A clear break of this EMA would signal scope for a deeper retracement, exposing the Oct 28 low at $3,887 and round number support at $3,800. However, provided the 50-day EMA remains intact, a consolidation phase at current levels may be healthy for gold, and lay the groundwork for fresh extension higher. Longer-term bull themes such as central bank buying and debt monetisation continue to be favoured. Goldman Sachs estimate China added 15 tons of gold in September, well above the 1.24 tons officially reported (write-up per Bloomberg).
- In recent weeks, the combination of falling Fed rate cut expectations and a tightening of US liquidity conditions have worked against gold, spurring a fresh bout of profit taking/deleveraging after a solid rally through September/October.
- It’s worth remembering that Gold’s 90-day rolling correlation with the S&P has been positive for most of the last three years, save for isolated periods in early 2022, mid 2023 and Q2 2025 (the latter being Liberation Day fallout). Shorter-horizon rolling correlations are unsurprisingly more volatile.
- Through gold’s 100% rally since the start of 2024, consolidation periods and minor corrections have not been uncommon. Recall that price traded in a horizontal fashion in the four months from mid-April to mid-August.
- In their 2026 outlook, TD Securities write that “lower rates, continued tilt toward debasement narratives, along with supply side dynamics and asset managers looking for diversification are set to make gold, copper and crude oil perform above expectations”. Goldman Sachs still see gold at $4,900/oz by the end of next year.
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
