GOLD: Gold Set for First Weekly Decline Since August
- In a 9-week run of gains, gold has risen almost 25% over that period but falls in recent days could result in its first weekly fall since mid-August.
- The majority of falls this week occurred on Tuesday, with one of the biggest one day falls of the year and bullion has been unable to recover since.
- The catalyst appears profit taking as yet another new record was achieved Monday, closing at US$4,356.30. Year to date gold is up +57%.
- The two days of losses came as ETF outflows reached their highest in several months.
- "The fundamentals supporting gold's rise remain in place, according to the Global Commodities Team at J.P. Morgan. Foreign managers of U.S. assets have diversified from dollars to gold this year, causing demand to rise. If their U.S. exposure drops to 43% from around 45% today, and half a percentage point is redirected to gold, prices could rise to $6,000 per ounce by 2028, the team predicted." as per BBG
- Gold has remained overbought since early September according to the 14-day Relative Strength Index and the move puts bullion back closer to fair value.
- That in itself is likely to see buyers return as the USD diversification story continues and Central Bank buying of gold continues to grow.
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AUSTRALIA DATA: August CPI Headline Up To 3%Y/Y, Trimmed Mean Eases To 2.6%
The headline August CPI print was 3.0%y/y, against a 2.9% market consensus and 2.8% July outcome. The trimmed mean was 2.6% y/y, after printing 2.7% in July (there is no consensus estimate for this outcome).
- The chart below plots the CPI monthly y/y trends, including the ABS's ex volatile items and holiday travel measure. We are comfortably up from earlier 2025 lows, even for the trimmed mean (though it ticked down from July levels).
- The ABS notes, "The largest contributors to annual inflation were Housing (+4.5 per cent), Food and non-alcoholic beverages (+3.0 per cent), and Alcohol and tobacco (+6.0 per cent)."
- 4 out of the 11 sub categories have a y/y pace under 2.0%. Transportation is the weakest at 0.4%y/y, but August saw the first rise in 7 months.
Recreation prices shifted down to 1%y/y from 2.6% in July. - The ABS added: "Annual Housing inflation was 4.5 per cent to August, up from 3.6 per cent to July, reflecting increases in Electricity costs. Electricity costs rose 24.6 per cent in the 12 months to August. In monthly terms, electricity costs fell 6.3 per cent in August 2025. The fall in costs this month was driven by NSW and ACT, with households in those States receiving their first payments of the extended Commonwealth Energy Bill Relief Fund (EBRF) rebates."
- Whilst the RBA will continue to place more weight on the quarterly CPI (we get the new comprehensive monthly series towards the end of Nov, for the Oct reference period), today's data will reinforce some caution for the central bank around further easing. It is likely to firm the no change stance next week (although market pricing has priced in very little chance of a move).
- The Q3 CPI print is out on Oct 29, with the RBA outcome on Nov 4. The central bank is forecasting trimmed mean at 2.6%y/y by year end. Any meaningful upside threat to that may trim easing prospects (either ahead of year end or for 2026).
Fig 1: Australia Monthly CPI Y/Y Trends, Up From Recent Lows
Source: ABS/MNI
CHINA PRESS: China To Boost Investment In Humanoid Robots, Metaverse
China will quicken the creation of a number of emerging pillar industries as new growth drivers, and strengthen cutting-edge technology research and development to focus on humanoid robots, brain-computer interfaces, metaverse, and quantum information for the 15th Five-Year Plan (2026-2030), China Securities Journal reported citing Li Lecheng, Minister of Industry and Information Technology.
CHINA PRESS: Over One Million Users Flock To Stock Trading Apps
The number of monthly active users of stock trading apps reached 173 million amid August's A-share rally, a rise of 4% m/m or 27% y/y, marking the highest monthly record in 2025, 21st Century Business Herald reported. The rally is also driving new investors into the market, with the number of new A-share accounts opened last month reaching 2.65 million, an increase of 35% m/m or 165% y/y, according to data from the Shanghai Stock Exchange, the newspaper said.
