GOLD: Fed Easing Signals & Trade Tensions Push Bullion Even Higher
Gold has rallied again today with it reaching another new high at $4190.97/oz. It is up 1.1% at $4188.3 so far driven by Fed Chair Powell signalling that rates are likely to be cut again on 29 October, which had been almost fully priced in, due to the softer labour market and less concern regarding rising inflation. His comments have also pressured the US dollar (BBDXY -0.2%) and US yields lower. Another 25bp is priced in for the December decision.
- US-China trade tensions continue to provide support even though talks are taking place. Tuesday China imposed curbs on 5 US units of Korea’s Hanwha shipbuilder and today President Trump threatened to halt cooking oil trade with China.
- Bullion has momentum despite it now flashing overbought. It is above initial support at $4179.7, Tuesday’s intraday high, opening round number resistance at $4200.0.
- Silver has unwound a large share of Tuesday’s losses with the metal up 1.4% to $52.17 today after a high of $52.221, holding below resistance at $52.386. It began to correct yesterday on expectations of the London market normalising in coming weeks after liquidity issues.
- Silver is also nervous about US import duties if a review finds that it is a critical mineral.
- Risk appetite has improved with stronger equities and AUD. The S&P e-mini is up 0.2%, Hang Seng +1.3% but CSI 300 flat. Oil prices are slightly lower with WTI -0.2% to $58.60/bbl. Copper is down 0.2%.
- Later the Fed’s Miran, Waller and Schmid speak and the Beige book is released. The ECB’s de Guindos, Buch and Donnery, and BoE’s Breeden and Ramsden also appear. US October Empire manufacturing and August euro area IP print.
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FOREX: JPY Crosses - Upward Momentum Stalls For Now
US Equities traded sideways as the market turned its focus towards the FOMC this week and what the potential upcoming cutting cycle could look like. This morning US futures have had a muted open, E-minis +0.05%, NQU5 +0.05%. The JPY crosses move higher seems to have stalled for now, fresh impetus is needed. Could the FOMC or the BOJ this week give it the nudge it needs ?
- EUR/JPY - Overnight range 172.79 - 173.44, Asia is trading around 173.00. The pair is consolidating around 173.00 as the move found sellers again back towards 173.50. The range looks to be 171.00-174.00 for now.
- GBP/JPY - Overnight 199.67 - 200.47, Asia trades around 200.00. This pair continues to struggle on any move above 200.00, a clear sustained break above 200.00 is needed to regain momentum higher.
- NZD/JPY - Overnight range 87.86 - 88.12, Asia is currently dealing 87.85. The pair topped out above 88.00 on Friday, a sustained move back above 88.00/88.50 and I will have to reassess my bias lower.
- CNH/JPY - Overnight range 20.6878 - 20.7739, Asia is currently trading around 20.7100. This pair has remained above its pivotal 20.30/20.40 support. The pair continues to trade comfortably within its recent 20.40-21.00 range.
Fig 1 : CNH/JPY 2H Chart
Source: MNI - Market News/Bloomberg Finance L.P
CHINA: Weak Property Data Continues
- Property Investment YTD YoY and Residential Property Sales YoY declined more than expected in August.
- Property Investment YTD YoY fell -12.9%, its largest monthly decline. It has not recorded a positive monthly result since March 2022.
- Residential Property Sales YoY declined -7.0% in August, the worst result for 2025. It has not recorded a positive monthly result since July 2023.
- Recently Shenzhen announced measures to support the property prices and bring their policies in line with Beijing and Shanghai. The announcements as of September 6 included easing of home purchase restrictions for non residents, removal of home purchase limits and lowering down payment requirements.
