OIL PRODUCTS: China Road Fuel Output Cuts to Continue Through 2030: JLC

A weaker USD supports gold, with spot trading ~$80/oz higher at $4,079/oz.

• Resistance at the October 31 high ($4,046.2/oz) has been breached, switching focus to the October 22 high ($4,161.4/oz).
• Our technical analyst had stressed that the recent pullback in bullion seemed corrective.
• Note that the move in gold seems somewhat larger than is justified by the degree of weakness witnessed in the greenback.
• Some have pointed to tentative steps towards the reopening of the U.S. government as a dovish signal (as it moves us closer to the resumption of official U.S. data releases, which could embolden Fed easing).
• However, this is at odds with the hawkish adjustment seen in the U.S. short end through early Monday trade.
• A reminder that long gold was one of the favoured trades until the pullback seen in recent weeks.
• Today’s move could simply reflect ongoing positive sentiment towards gold (magnified when there are gold-positive developments), helping to at least partially explain the outperformance vs. the fundamental inputs
• Elsewhere, recent headlines note that the Shanghai Gold Exchange is set to waive transactions fees for some gold contracts from tomorrow until the end of ’26, a marginal gold positive.

SFIH6 96.45/96.75 call spread vs. 96.30 puts paper paid 1.5 on 3.3K.

SFIZ5 96.20/96.10 put spread vs. 0NZ5 96.50/96.40 put spread, paper paid 0.25 on 4.5K (+SFIZ5, -0NZ5).