On Wednesday (October 7, Beijing time) in early Asian trading, spot gold was trading around $4,162.64 per ounce. Gold prices rebounded after hitting a two-month low of $4,104.99 per ounce on Tuesday, supported by a pause in the rise in US Treasury yields and a weaker dollar. Investors awaited the release of the minutes from the Federal Reserve's September meeting for new clues about the outlook for monetary policy. US crude oil was trading around $89.80 per barrel. Oil prices hit a one-month low on Tuesday, with the market weighing increased Middle Eastern oil exports and the G7's plan to release emergency diesel and crude oil reserves, while also focusing on supply concerns triggered by attacks by the Houthi rebels in Yemen.

Key Focus Today

stock market

U.S. stocks closed higher on Tuesday, with the Dow Jones Industrial Average rising 0.49% to 51,521.04, the S&P 500 gaining 0.58% to 7,818.95, and the Nasdaq Composite climbing 0.45% to 27,599.79. Stabilizing oil prices and declining U.S. Treasury yields temporarily eased investor concerns, shifting market focus to the upcoming third-quarter earnings season. The broad-based gains pushed the S&P 500 and Nasdaq to record closing highs. All 11 S&P sectors rose except healthcare, with utilities leading the gains. Six of the seven technology sectors advanced, the Philadelphia Semiconductor Index rose, and AMD gained 2.8%, with CEO Lisa Su stating plans to significantly increase chip supply by 2027 to meet AI demand. The US trade deficit widened by 13.7% in August due to record imports, which rose 4.3% month-on-month and 28.4% year-on-year, potentially exacerbating inflationary pressures. However, supply concerns eased after the G7 reached an agreement to release emergency diesel and crude oil reserves, stabilizing oil prices. CME FedWatch showed that the market's expectation of a second consecutive Fed rate hike this month fell to 19.4%, down from 50.9% a week earlier. The third-quarter earnings season begins next week, with analysts expecting S&P 500 companies to see a 30.6% year-on-year increase in earnings, while energy and technology companies are expected to see increases of 114.7% and 66.5%, respectively.

Gold Market

Spot gold rose 0.56% on Tuesday to settle at $4,163.90 an ounce, after hitting a two-month low of $4,104.99 an ounce during the session. Support came from a pause in the rise in U.S. Treasury yields and a weaker dollar, as investors awaited the release of the minutes from the Federal Reserve’s September meeting for new clues about the outlook for monetary policy. Jim Wyckoff, an analyst at American Gold Exchange, said that turmoil in the French bond market and growing concerns about the US bond market have created some safe-haven demand for gold. The yield on the 10-year US Treasury note rose to a more than 20-year high on Monday before retreating slightly, and the dollar fell from a one-year high, making dollar-denominated gold cheaper for investors holding other currencies. The increasing government debt and widening budget deficits in parts of the Eurozone, particularly France, have made investors nervous and pushed up sovereign bond yields. The market is awaiting the release of the minutes from the Fed's September FOMC meeting on Wednesday to assess the likelihood of further rate hikes this year. After weaker-than-expected US job growth in September, the market has reduced its bets on a Fed rate hike this month; CME FedWatch shows traders see only a 22% probability of a rate hike this month, but still expect an 84% probability of a rate hike in December. Meanwhile, resilient Middle Eastern oil exports, coupled with the G7's emergency release of reserves to alleviate supply concerns, have pushed oil prices down. TD Securities stated that despite short-term headwinds, continued ETF buying and demand from self-determining investors continue to support gold, maintaining its view that gold prices will break through $5,000 per ounce in 2027.

oil market

Oil prices rose on Tuesday, with Brent crude up 0.82% to settle at $101.11 a barrel and WTI crude up 0.68% to settle at $89.91 a barrel. The market weighed increased Middle Eastern oil exports and the G7's plan to release emergency diesel and crude oil reserves, while also focusing on supply concerns stemming from attacks by Houthi rebels in Yemen. The CEO of commodities trading giant Vitol stated that approximately 12 million barrels per day of crude oil and 2 million barrels per day of refined petroleum products have been shipped from the Middle East by tankers over the past seven to ten days. Saudi Energy Minister Prince Abdulaziz bin Salman stated that as of Tuesday morning, 5.8 million barrels of oil had been transported via the East-West Pipeline, which leads to the Yanbu export hub on Saudi Arabia's Red Sea coast. However, Saudi aviation authorities stated that as hostilities escalate between Saudi Arabia and the Houthi rebels in Yemen, Jizan and Najran airports were attacked twice on Monday evening, resulting in three injuries and minor damage. Following weeks of Houthi advances, the Saudi-backed Yemeni government forces are launching a large-scale offensive, with Riyadh increasing air support. The U.S. National Hurricane Center stated that there is a 100% chance of a cyclone forming in the Gulf of Mexico within the next seven days, potentially disrupting oil and gas production and pushing up oil prices. Sources say the IEA will meet next week to finalize details of the diesel reserve release, deepening market uncertainty about the scale of the release in Europe and the US. Under pressure from Trump, the G7 major economies agreed last Friday to release 100 million barrels of diesel and crude oil from their emergency reserves and pledged not to impose energy export restrictions. The EIA projects global oil production will decline from a record 106.3 million barrels per day in 2025 to 101.1 million barrels per day in 2026, while demand is expected to fall from 104.4 million barrels per day to 102.4 million barrels per day.

Foreign exchange market

The dollar index closed down 0.26% on Tuesday at 101.83, on track for its biggest one-day drop since September 3. Global bond yields have climbed in recent weeks, the war in Iran has pushed up energy prices and inflation, and market concerns about government fiscal conditions have prompted investors to expect central banks to raise interest rates significantly. Despite weaker-than-expected US jobs data and comments from some Federal Reserve officials cooling market expectations for a rate hike at a later October meeting, the US dollar has remained strong recently. However, the market still anticipates further rate hikes by the Fed later this year and next year. Goldman Sachs stated that the dollar's September rise was partly due to the high weighting of the technology and AI sectors in US stocks and relatively strong US economic growth, but it remains cautious about further short-term dollar strength, citing near-extreme positioning in major currency pairs and the Fed's emphasis on patiently tightening policy. Kansas City Fed President Schmid stated that even if higher long-term yields drag down activity in some sectors of the economy, the Fed still needs to further raise policy rates to reduce inflation. The CME FedWatch tool shows that the market expects a probability of at least a 25 basis point rate hike by the Fed in October of about 19%, up from about 51% a week ago, and an 86% probability of a rate hike in December. The euro rose 0.32% against the dollar on Tuesday, closing at 1.1258, its biggest one-day gain in seven weeks, as a decline in French government bond yields eased market concerns about pressure on the eurozone bond market. With the 2027 presidential election approaching, French politicians are struggling to curb the budget deficit, putting pressure on French government bonds. Spain's announcement of a snap election has also increased pressure on the euro. Early declines in energy prices pushed up French government bond prices, with the benchmark 10-year bond yield falling 11.4 basis points to 4.7506%, as increased Middle Eastern oil exports, emergency releases of reserves by the G7, and progress by the Saudi-backed Yemeni government forces easing supply concerns were factors. However, oil prices subsequently rebounded, erasing the losses. Marc Chandler, a strategist at Bannockburn Capital Markets, stated that the Yemeni forces' recapture of strategic locations drove a sharp drop in oil prices, which in turn lowered yields on government bonds in countries like France and Italy, contributing to the euro's rebound. French far-right presidential candidate Marine Le Pen stated that if elected in 2027, she would increase the spending cut target from the originally planned €125 billion to €140 billion ($158 billion). The pound rose 0.4% against the dollar to settle at $1.3274, after hitting a one-week high of $1.3285 earlier in the session, marking its biggest one-day gain since August 19. The dollar rose 0.2% against the yen to settle at 158.09, after three sources said the Bank of Japan may signal this month that core inflation has essentially reached its 2% target, highlighting its readiness to raise interest rates again in the coming months. Bank of Japan Governor Kazuo Ueda stated that stabilizing core inflation around 2% is becoming increasingly important.

International News

Qatar Says Negotiations and Information Exchange to End Regional Conflict Continue Ibrahim Hashmi, Director of the Media and Communications Department of the Qatari Ministry of Foreign Affairs, said at a regular press conference on the 6th that negotiations and information exchanges between the parties involved in the regional conflict are still ongoing through Qatar and its regional partners, and that all parties are working diplomatically to bridge their differences. Hashmi said the negotiations are still underway and have taken into account the concerns of all parties. However, he declined to comment on specific plans, points of contention, or other technical details. Hashmi said the entire world has paid a heavy price for this conflict, and every effort must be made to end the conflict immediately through a solution that can be reached at the negotiating table. (Xinhua) Israeli Government Issues Travel Warning, Reminding Overseas Citizens of Potential Security Risks On the 6th local time, the Israeli Prime Minister's Office issued an official notice via social media, reminding Israeli citizens overseas to raise their security awareness in preparation for the third anniversary of the new round of Israeli-Palestinian conflict on October 7, 2023, in order to cope with potential attacks and demonstrations. The notice stated that relevant security assessments show that the risk of attacks against Israeli and Jewish targets overseas has increased as the anniversary of the conflict approaches. Armed groups and extremist forces in some regions regard this juncture as a landmark moment for their activities. The notice therefore offers several precautionary recommendations to the public, including avoiding travel to countries and regions listed in Israel's high-risk travel warnings, such as Jordan, Qatar, and Egypt (including the Sinai Peninsula); minimizing the use of Hebrew in crowded places; and avoiding publicly sharing overseas travel itineraries or uploading content related to their service in security forces on social media. Furthermore, the notice urges overseas citizens to stay away from demonstrations and rallies in various locations. (CCTV News) Saudi Arabia says East-West oil pipeline's daily oil throughput has recovered to 5.8 million barrels On October 6th local time, Saudi Arabian Energy Minister Abdulaziz bin Salman stated that the daily oil throughput of the Saudi East-West oil pipeline has now recovered to 5.8 million barrels. In September, the Saudi East-West oil pipeline was temporarily shut down due to a drone attack. The Saudi East-West oil pipeline connects the country's main oil-producing region in the east with the port of Yanbu on the Red Sea coast, with a maximum capacity of approximately 7 million barrels per day. It is an important alternative route for Saudi crude oil exports, bypassing the Strait of Hormuz. (CCTV News) Iranian Lawmaker Says Retaliation Against Trump Should Have Been Emphasized During US Visit An Iranian lawmaker said on Tuesday that Iranian officials should have emphasized "retaliation against Trump" during their visit to New York, rather than stating that Iran had no intention of retaliating against the US president. Ghasem Ravanbakhsh also stated that two fast-track proposals to withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons have been submitted to parliament, with one new bill listed as the highest priority. He stated that the decision on whether Iran develops nuclear weapons rests with the highest leadership and the Supreme National Security Council. EIA Raises WTI and Brent Crude Oil Price Forecasts for 2026 and 2027: The EIA Short-Term Energy Outlook forecasts WTI crude oil prices at $88.21/barrel in 2026, up from the previous forecast of $84.65/barrel. WTI crude oil prices are projected to reach $79.74/barrel in 2027, up from the previous forecast of $69.74/barrel. Brent crude oil prices are projected to reach $96.32/barrel in 2026, up from the previous forecast of $91.01/barrel. The Brent crude oil price is projected to be $83.74 per barrel in 2027, up from the previous forecast of $73.74 per barrel. According to CME's "FedWatch," the probability of the Federal Reserve keeping interest rates unchanged by October is 79.5%, with a 20.5% probability of a cumulative 25 basis point rate hike. The probability of the Fed keeping interest rates unchanged by December is 15.5%, with a 68% probability of a cumulative 25 basis point rate hike and a 16.5% probability of a cumulative 50 basis point rate hike.

Domestic News

Hong Kong Remains Ranked as the World's Freest Economy The Fraser Institute of Canada released its "Economic Freedom of the World 2026" report on June 6th, ranking Hong Kong as the world's freest economy. A spokesperson for the Hong Kong SAR government stated that the report reaffirms Hong Kong's free market advantages and its open, efficient, and fair business environment. Among the five assessment categories, Hong Kong retained its top position in "Freedom of International Trade" and maintained its second-place ranking in "Regulation." (CCTV News) China's Foreign Exchange Market Trading Volume Grew Steadily in the First Half of This Year The State Administration of Foreign Exchange recently released its "Report on China's International Balance of Payments for the First Half of 2026," showing that in the first half of this year, China's foreign exchange market trading volume grew steadily. The total trading volume of the onshore RMB foreign exchange market reached US$22.1 trillion, a year-on-year increase of 5.1%. Among them, the trading volume of the bank-to-customer market and the interbank market were US$3.9 trillion and US$18.2 trillion respectively; the spot and derivatives trading volumes were US$8.3 trillion and US$13.8 trillion respectively, with derivatives accounting for 62.4% of the total foreign exchange market trading volume. (Xinhua News Agency)