On Friday (October 2, Beijing time) in early Asian trading, spot gold was trading around $4,175.73 per ounce. Gold prices rose slightly on Thursday as bets on a Fed rate hike in October declined, while investors awaited key US jobs data. US crude oil was trading around $93 per barrel. Oil prices rose on Thursday as the US deployed more troops and aircraft carriers to the Middle East, and Trump indicated that he might intensify efforts to strike Iran after the midterm elections.

Key Focus Today

stock market

U.S. stocks closed slightly higher on Thursday, with the Dow Jones Industrial Average rising 0.04% to 50,926.74, the S&P 500 gaining 0.20% to 7,666.48, and the Nasdaq Composite climbing 0.04% to 26,871.60. The S&P 500 rebounded from a two-week low, reversing a global bond sell-off that pushed U.S. Treasury yields to multi-decade highs. U.S. stocks were pressured in early trading as economic data continued to show a robust economy and persistent price pressures, raising concerns that inflation could eventually force the Federal Reserve to take more aggressive interest rate hikes. The U.S. Labor Department reported that initial jobless claims fell slightly to 197,000 last week, below economists' forecasts of 200,000. Data from the Institute for Supply Management showed that the manufacturing PMI fell slightly to 54.5 in September from 54.6 in August, but a jump in input prices exacerbated inflation concerns. Following the data release, the 10-year Treasury yield hit a 24-year high, dragging down stocks; the yield recorded its largest quarterly increase since 1994 in September. However, as buyers entered the market, Treasury yields turned downwards. Federal Reserve Vice Chairman Jefferson hinted that after the 25-basis-point rate hike in September, the Fed might wait patiently for another period before raising rates again. Treasury yields subsequently fell further, with the two-year Treasury yield, which typically tracks Fed rate expectations, dropping about 10 basis points, marking its largest single-day decline since August 2025. Scott Welch, Chief Investment Officer at Certuity, stated that despite declining valuations, the market is still not cheap. The market can continue to move slowly, but increased volatility in both the stock and bond markets is expected, as everyone is adapting to a new normal. The technology sector performed strongly, rising 0.8%. Software stocks rose 1%, boosted by Accenture's better-than-expected full-year revenue forecast, which propelled its share price to its highest level since March 6th. Micron rose 3%, giving better-than-expected revenue forecasts and announcing $32 billion in customer purchase commitments under supply agreements, further strengthening market confidence in artificial intelligence deals. According to the CME FedWatch tool, the market currently expects only a 28.2% probability of the Federal Reserve raising interest rates by at least 25 basis points, down from 68.6% a week ago. Following Jefferson's speech, Minneapolis Fed President Kashkari said he expects further rate hikes to be needed to curb the economy as we head into 2027, but is uncertain whether the next rate hike should take place in October.

Gold Market

Gold prices rose slightly on Thursday, with spot gold up 0.49% to settle at $4,177.27 an ounce, after weaker-than-expected U.S. inflation data reduced bets on a Federal Reserve rate hike in October, while investors awaited key U.S. jobs data to be released later this week. David Meger, head of metals trading at High Ridge Futures, said that these reduced expectations of interest rate hikes have provided support for the precious metals market. However, the benchmark 10-year US Treasury yield rose to its highest level in over 20 years, increasing the opportunity cost of holding non-interest-bearing gold. A stronger dollar also makes dollar-denominated gold more expensive for investors holding other currencies, limiting further price increases. Rising oil prices have also exacerbated inflation concerns. Meger stated that any factor that increases the likelihood of a Fed rate hike will certainly dampen sentiment in the gold market; further significant increases in energy prices or an escalation of tensions in the Middle East would have the same effect. Investors are currently awaiting Friday's US September non-farm payroll report for clues about the outlook for monetary policy. HSBC lowered its average gold price forecasts for 2026 and 2027 to $4,490 and $4,825 per ounce, respectively, stating that gold prices may face further pressure in the short term but may be nearing a bottom. The bank also expects central banks to resume gold purchases due to falling prices, especially when prices approach or fall below $4,000 per ounce.

oil market

Oil prices surged on Thursday, with WTI crude rising 2.84% to settle at $92.91 a barrel and Brent crude climbing 4.43% to settle at $102.24 a barrel. Reports that the U.S. is sending more troops and aircraft carriers to the Middle East and that a major Asian power has suspended oil product exports exacerbated market concerns about a potential worsening of global fuel shortages. The Wall Street Journal reports that the US is sending a third aircraft carrier and up to 10,000 reinforcements to the Middle East as President Trump considers restarting strikes against Iran after the midterm elections. Trump stated at the White House that he was weighing various options against Iran before embarking on his campaign, saying, "Now I have to make a decision. Either they sign a very fair deal, or they will cease to exist." UBS analyst Giovanni Staunovo stated that although crude oil supplies continue to flow into the market, diesel and other refined products remain in short supply due to damage to refining infrastructure in the Gulf region and Russia. Russia, one of the major diesel exporters, has announced a suspension of exports until the end of October, and global diesel inventories are already tight. Industry insiders say the shortage is unlikely to ease before next year. Russian President Putin stated that Russia will not supply diesel to the global energy market until sanctions against Moscow are lifted. To alleviate pressure, two EU diplomats revealed on Thursday that the EU energy working group will meet on Friday to discuss the possible release of diesel reserves. Sources indicate that the Trump administration has asked Germany and France to use their emergency diesel reserves or face a potential US diesel export ban. Shipping intelligence firm Marisks said in a report Wednesday that three Liberian-flagged oil tankers were attacked by unidentified projectiles while transiting the Strait of Hormuz on Tuesday. Sources said Iran is preparing a broader and stronger response should the US resume large-scale military attacks, while continuing diplomatic efforts—although Iranian officials privately believe these efforts are unlikely to succeed. Continued turmoil in global oil and fuel markets has prompted analysts to raise their 2026 Brent crude average price forecast to $89.05 per barrel, despite noting signs of gradual improvement in Middle Eastern exports.

Foreign exchange market

The dollar index rose 0.55% on Thursday to close at 102.02, while the dollar rose to a 17-month high against the euro on Thursday. A global bond sell-off pushed U.S. and European government bond yields to new highs, while rising oil prices exacerbated inflation concerns. Brian Daingerfield, head of G10 FX strategy at NatWest Markets, said the rise in yields was the result of a combination of factors, particularly concerns about fiscal policy, including the potential for the weakness in the French bond market to spread globally. The market also remained concerned about rising energy prices and inflation, and widely expected central banks, including the Federal Reserve, to continue tightening policy. The benchmark 10-year US Treasury yield touched its highest level since 2002, and the euro also fell against the yen and Swiss franc. Continued concerns about the instability of France's fiscal situation put pressure on French government bonds, with yields hitting a new 14-year high. Amo Sahota, head of Klarity FX, said the dollar had been rising in recent weeks, and the recent unsettling factor was the panic in European markets. French debt is simply too high, and the widening yield spread between France and Germany is making everyone nervous, thus severely impacting the euro. Data released on Wednesday showed that US inflation rose less than expected in August, and July's data was also revised downwards, reducing market expectations for a Fed rate hike this month. However, the surge in eurozone inflation highlighted the continued threat that rising energy prices pose to the global economy. The US dollar rose for the sixth consecutive quarter as of the end of September, its longest quarterly winning streak since 2022. Global bonds recorded their biggest monthly drop in years in September, pushing yields up, attributed to factors such as deteriorating government fiscal conditions, an oversupply of bonds, and rising inflation.

International News

Trump: May Increase Strikes Against Iran After Midterm Elections US media reported on October 1 that US President Trump stated the US may increase its strikes against Iran after the midterm elections. Time magazine published an interview with Trump that day. When asked if he planned to increase bombing of Iran after the midterm elections, Trump said "possibly." Trump also stated that he rejected Iran's proposal to reopen the Strait of Hormuz, saying, "They proposed opening the Strait of Hormuz…but it's not good enough." (Xinhua) US Sends Third Aircraft Carrier to Middle East According to US media citing US officials, the Pentagon is sending a third carrier strike group and several new Marine Corps ships to the Middle East, deploying an additional 9,000 to 10,000 troops to the region. President Trump is currently considering resuming strikes against Iran after the midterm elections. Officials stated that the ships and troops will arrive in the Middle East by the end of November. Trump recently told his aides that he expects to resume bombing of Iran in November. Currently, the Middle East has two aircraft carriers deployed: the USS George H.W. Bush and the USS George Washington. If the USS Washington remains in the Middle East after the arrival of the USS Roosevelt, the Middle East will once again have three carrier strike groups deployed simultaneously, a situation not seen since April. An official stated that the additional personnel on the warships departing this week will add to the existing 50,000 US troops in the Middle East. The probability of a Federal Reserve rate hike in October has fallen to 24.9%, and the probability of at least one more rate hike this year has fallen to 79.4%. According to CME's "FedWatch": the probability of the Fed maintaining interest rates unchanged by October is 75.1%, and the probability of a cumulative rate hike of 25 basis points is 24.9%. The probability of the Fed maintaining interest rates unchanged by December is 20.6%, the probability of a cumulative rate hike of 25 basis points is 61.3%, and the probability of a cumulative rate hike of 50 basis points is 18.1%. US Republicans Consider Rapidly Raising Debt Ceiling US Republican lawmakers are considering a plan to rapidly raise the US debt ceiling in the final weeks of the current congressional term, thus depriving Democrats of a significant bargaining chip to influence the Donald Trump administration, even if they gain a majority in Congress. A successful operation would also eliminate a low-probability but potentially devastating risk to global financial markets, as the US federal government's borrowing authority is projected to run out in the second half of 2027. If Republicans lose a majority in either the House or Senate in the November 3 election, a fierce standoff between Trump and Democrats could occur, or even worse, a US payment default could happen. According to estimates from the Bipartisan Policy Center, this risk will rise in the second half of 2027. Iran's Persian Gulf Straits Authority: Three Recently Attacked Oil Tankers Were Previously Listed as Violators On October 1, local time, Iran's Persian Gulf Straits Authority issued a statement saying that several oil tankers had recently been attacked in the Strait of Hormuz, with the three most recently attacked tankers all owned or leased by the UAE. Investigations show that the oil tankers "Al Ruwais," "Sinbad," and "Mersin Prosperity" have transited the Strait of Hormuz multiple times in the past two months. These three tankers were listed on the latest violation list updated by the Persian Gulf Straits Authority. (CCTV News) A Fatal Accident at a Major Copper Mine in Chile on Thursday A fatal accident occurred at a major copper mine owned by Codelco, Chile's state-owned copper company, on Thursday. This is the second fatal accident reported at a copper mine in Chile, the world's largest copper producer, in the past two weeks. Chilean emergency services stated that the accident occurred at the Radomiro Tomic copper mine, about 40 kilometers (25 miles) north of Calama, resulting in one death. The circumstances and cause of the accident are still under investigation. Codelco has not yet commented. This accident comes after a worker died last week at BHP Billiton's Escondida copper mine during equipment maintenance, leading to a temporary shutdown of the world's largest copper mine, which has since gradually resumed operations. The Ladomiro Tomique copper mine also experienced a fatal accident in early 2024. At that time, Chile's state-owned copper company, Copper, was undertaking safety overhauls, and the mine could only utilize about one-third of its transport fleet, hindering the state-owned copper mining company's resumption of production plans. This latest accident occurs at a difficult time for Chile's mining industry and may further tighten the already strained global copper market, which is affected by supply disruptions. Impacted by weather and operational problems at several large mines, Chile's copper production in August fell 13% year-on-year to 369,500 tons, the lowest monthly level in over 15 years. Meanwhile, South Korean President Lee Jae-myung appointed several aides and high-ranking government officials amid low approval ratings . On October 1st, the South Korean presidential office, Cheong Wa Dae, announced that President Lee Jae-myung had appointed several aides and high-ranking officials to implement the government's policy agenda. A recent poll showed that Lee Jae-myung's approval rating remained low at 43%. Presidential Press Secretary Sung Ki-hong announced at a press conference that day that President Lee Jae-myeong had appointed Ha Jun-kyung, the senior secretary for economic growth, as head of the Presidential Office's Policy Division, with Vice Minister Moon Shin-hak filling the vacancy. Democratic Party lawmaker Song Young-gil was appointed Special Advisor for Peace and Diplomacy, and party lawmaker Kim Byung-joo was appointed Special Advisor for Defense Policy. In addition, Lee Jae-myeong appointed two vice-ministerial level officials in the Ministry of Finance and Economy. (Xinhua) French oversight body says budget draft's economic assumptions are "optimistic," government's deficit reduction plan faces risks French fiscal oversight body warned that the economic assumptions underlying the government's 2027 budget draft are "optimistic," posing a risk to plans to reduce the high fiscal deficit. Earlier on Thursday, the French government submitted a fiscal bill to the cabinet, projecting economic growth to accelerate from 0.5% in 2026 to 1%, and plans to reduce the fiscal deficit as a percentage of GDP from 5.4% to 5%. The French High Council for Public Finance (HCFP), an independent body overseeing public finances, stated that these forecasts assume a significant rebound in private investment, but soaring French sovereign borrowing costs could impact the financing environment for businesses and households. The agency also stated that due to limited time and information provided by the government, it was unable to conduct an in-depth analysis of all proposed tax and spending adjustments. The US reportedly demands Germany and France use emergency diesel reserves. According to foreign media citing three sources familiar with the matter, the US government has informed Germany and France that they must use their emergency diesel reserves to alleviate global fuel prices, or face a potential US diesel export ban. In recent years, the US has accounted for an increasingly larger share of European diesel supply. Recently, with soaring average US diesel retail prices and inflationary pressures threatening the midterm elections, US President Trump held emergency consultations with advisors to discuss whether to implement a diesel export ban. Trump stated on September 30th that he was still evaluating options for stabilizing oil prices, including an export ban, while acknowledging that while a ban would lower diesel prices, it could put upward pressure on gasoline prices. (CCTV International News)

Domestic News

China Achieves Another Breakthrough in Lithium Exploration in the "Asian Lithium Belt" China has made another breakthrough in lithium exploration in western Sichuan, adding approximately 1.0468 million tons of lithium carbonate equivalent. After the increase, the cumulative registered lithium carbonate equivalent of the Jiada lithium mine reaches 2.531 million tons, further expanding the deposit's scale and consolidating its status as a super-large pegmatite lithium deposit. According to the Chinese Academy of Geological Sciences, the "Exploration Report on Lithium Deposits in Lines 119 to 167 of the Jiada Mining Area, Ma'erkang City, Sichuan Province," edited by the team of researcher Wang Denghong from the Institute of Mineral Resources of the Chinese Academy of Geological Sciences, recently passed the mineral resource reserve review and registration by the Ministry of Natural Resources. The Jiada lithium mine is located in the giant lithium-forming belt from the West Kunlun Mountains to Songpan to Ganzi. This lithium-forming belt belongs to the "Asian Lithium Belt" and is an important enrichment area for hard-rock lithium deposits in China. The newly registered lithium ore resources amount to 33.523 million tons, with 423,800 tons of lithium oxide minerals and an average grade of 1.26%. Wang Denghong said that this increase in reserves further solidifies the resource base of the large lithium resource base in western Sichuan, which is of great significance for enhancing China's hard-rock lithium resource security and reducing dependence on foreign sources. (Xinhua News Agency) State Administration of Foreign Exchange: China's Current Account Surplus Reached US$378 Billion in the First Half of the Year According to the "Report on China's International Balance of Payments for the First Half of 2026" released by the State Administration of Foreign Exchange, China's total current account balance of payments reached US$4.6 trillion in the first half of the year, a year-on-year increase of 16%; the current account surplus was US$378 billion, maintaining a stable ratio to GDP. In terms of goods trade, the total import and export volume of goods, measured by the balance of payments, increased by 18% year-on-year in the first half of the year, with trade related to artificial intelligence and green energy performing particularly well. Goods imports increased by nearly 20% year-on-year, 2.3 percentage points faster than export growth. In terms of services trade, services exports increased by 21% year-on-year in the first half of the year, with increased travel by foreign nationals to China and accelerated exports of emerging productive services contributing 16% and 42% to the growth in services exports, respectively. Services imports increased by 7% year-on-year, and China remains a major importer of services globally. (Xinhua News Agency)