On Wednesday (November 4, Beijing time) in early Asian trading, spot gold was trading around $3,932 per ounce, pressured by a stronger dollar and rising US Treasury yields, while investors awaited the results of the US midterm elections for clues about fiscal policy. US crude oil was trading around $96.73 per barrel, having hit a near four-week low on Wednesday, as the market weighed between negotiations aimed at ending the wars in Ukraine and Iran and concerns that recent attacks in those conflicts could further disrupt supply.

Key Focus Today

stock market

U.S. stocks rebounded on Tuesday ahead of the midterm election results, with the Nasdaq closing up 0.83% at 25,372.01, the S&P 500 gaining 0.36% to 7,568.92, and the Dow Jones Industrial Average falling 0.38% to 51,787.04. Heavyweight AI-related stocks saw bargain hunting after recent declines, with Nvidia rising 2.3%, Micron gaining 2.6%, and Microsoft and Amazon both rising over 2%. The Philadelphia Semiconductor Index jumped, but Apple fell 1.9% after warning that rising memory chip costs would suppress gross margins in the holiday quarter. Palantir, despite better-than-expected earnings and guidance, declined slightly. The Nasdaq 100 has retreated more than 10% from its record high on October 6, as investors worry that massive spending on AI infrastructure is growing faster than short-term cash generation. The S&P 500 is down about 3% from its record high but is still up more than 10% year-to-date. The market is also focused on the midterm elections, with polls showing Democrats likely to gain control of the House of Representatives while the Senate remains uncertain.

Gold Market

Spot gold fell 0.42% on Tuesday to settle at $3,930.09 an ounce, pressured by a stronger dollar and rising U.S. Treasury yields, while investors awaited the results of the U.S. midterm elections for clues about fiscal policy. Oil prices fell to a three-week low on Tuesday, briefly easing inflation concerns and boosting gold prices, but prices subsequently retreated again. Markets are focused on the possibility of Democrats regaining control of the House of Representatives and the still-uncertain Senate elections, with traders pricing in a 79% probability of a Federal Reserve rate hike in December. The Gold Association lowered its forecast for gold investment growth this year from 400 tons to 200 tons, but raised its estimate for central bank gold purchases.

oil market

Oil prices fell on Tuesday, with U.S. crude hitting a near four-week low of $93.59 per barrel and Brent crude hitting a near four-week low of $100.79 per barrel. The market weighed the progress of negotiations aimed at ending the wars in Ukraine and Iran, while also worrying that recent attacks in these two conflicts could further disrupt supply. Meanwhile, the world is closely watching the U.S. midterm elections to see if the Republicans can retain control of Congress. According to a senior Iranian official, Iran and the United States are still far from reaching an agreement to end the conflict, while Qatar, the mediator, stated that Washington and Tehran remain committed to mediation and are reviewing proposals aimed at bridging the differences. ING pointed out that despite positive signs, it may be premature to conclude that the risk of escalation has passed, and substantial progress in peace negotiations would mean greater downward pressure on oil prices. Furthermore, Trump stated that he has reached an agreement with Israeli Prime Minister Netanyahu that Washington will stop providing $4 billion in funding to Israel after the end of this year. The Kremlin confirmed that Russia will hold trilateral peace talks with Ukraine and the United States in Abu Dhabi from November 10th to 11th. Earlier in the day, API inventory data showed that US crude oil inventories fell by 526.7 barrels in the week ending October 30th; the market is now focused on the EIA data later in the day.

Foreign exchange market

The dollar index held steady around 101.85 on Tuesday as investors assessed uncertainty surrounding a potential deal between the US and Iran, as well as the outcome of the US midterm elections, with a focus on whether a strong performance by the Democrats would exacerbate volatility in asset prices, particularly in the AI sector. Meanwhile, JOLTS job openings in the US rose by 333,000 to 7.523 million, far exceeding the expected 7.1 million, and new orders for US factories in September increased by 1.8%, also exceeding expectations and dragging down the dollar. In the Middle East, a senior Iranian official stated that the US and Iran are still far from reaching an agreement to end the war, Qatar is intensifying its mediation efforts, and Trump stated that he has reached an agreement with Israeli Prime Minister Netanyahu that Washington will stop providing $4 billion in funding to Israel after the end of this year but will continue arms sales. Juan Perez of Monex USA stated that the signals are very mixed, and the dollar still has room to fall, partly because there is no longer a consensus on Federal Reserve policy, and increased government or political friction is likely to be negative for the dollar. The Australian dollar fell 0.46% against the US dollar, closing at 0.6965. The Reserve Bank of Australia raised interest rates by 25 basis points to 4.85% on Tuesday as expected, with six votes in favor and three against, marking the fifth rate hike this year. Goldman Sachs described the decision as "slightly dovish."

International News

Israel Informs US that Iran is Considering Using Chemical Weapons Israel warned US intelligence officials that Iran might be preparing to use chemical weapons, a claim that has sparked considerable division within the Trump administration. Some US officials take the threat seriously, while others suspect Netanyahu is trying to drag the US back into large-scale military action. Gulf state officials have also questioned Israel's assessment. Meanwhile, US Central Command reportedly drafted a plan to strike as early as November 4, but Trump has not yet approved a new round of attacks. While military deployments proceed, diplomatic efforts continue to try to reopen the Strait of Hormuz. Trump: "Small-Scale Attack" on Iran US President Trump stated on the 3rd that the US launched a "small-scale attack" on Iran, adding that it was "not a war." In a phone interview that day, Trump told Fox News, "They (Iran) spent about two months building an air defense facility… The United States has been watching its construction, and as soon as it was finished, we 'very nicely' hit it last night." He also stated, "It was a small-scale attack, not a war." Trump claimed the US had "complete control" of the Strait of Hormuz and did not rule out military action against Iran after the midterm elections. Several explosions were heard on Qeshm Island in southern Iran early on November 3rd local time. US media reported that the US military launched an attack on Qeshm Island, destroying Iranian missile launchers. (Xinhua) The Iranian Revolutionary Guard is on high alert. On the evening of November 3rd local time, the Iranian Islamic Revolutionary Guard Corps issued a statement saying that the US's actions have exposed its hostility towards Iran and its goal of "overthrowing the Iranian regime and splitting Iranian territory." The Revolutionary Guard solemnly declared that all orders issued by Iran's Supreme Leader and Supreme Commander of the Armed Forces at recent meetings are on the agenda, aiming to fully implement the "maximum deterrence" policy. The current priority is to maintain a high state of combat readiness, update the enemy target database, place enemy tangible and intangible assets within range of strikes, and respond swiftly and effectively to threats of any level and type. The Revolutionary Guard emphasized that Iranian soldiers, with unwavering conviction and a state of full combat readiness, will determine the final fate of the enemy. As Iran's Supreme Leader stated, "The time and conditions for ending the enemy's offensive are decided by the Iranian armed forces and the Iranian people." (CCTV International News) Iran Demands Clear US Response to 7 Conditions or No Opening of Strait of Hormuz Mohsen Rezaei, Secretary of Iran's Supreme National Security Council, said on social media on the 3rd that the US response to Iran's rights and demands was unconvincing. The US must fully and clearly respond to the seven conditions proposed by Iran and implement them before the Strait of Hormuz will be opened. Rezaei stated in October that over the past two months, the US, through Pakistan, Qatar, and Iraq, had requested Iran to make proposals. Iran presented the US with seven conditions and clearly informed the US that unless these conditions are met, the Strait of Hormuz will not be opened, and no negotiations will be conducted. Iran has not yet publicly disclosed the specific details of these seven conditions. (Xinhua) Iran Says No New Progress in Iran-US Talks On November 3, local time, Iranian Foreign Ministry spokesman Baghae, a member of the negotiating delegation, stated that no new progress has been made in the Iran-US talks, and the exchange of information between the mediators between Iran and the US continues. Meanwhile, Iran's defense preparedness is at its highest level. Baghae stated that past experience has made Iran cautious about the US's diplomatic sincerity, but Iran will not let go of any opportunity to use diplomatic means to safeguard its legitimate rights and demands and maintain regional security. (CCTV News) Trump Says He Will Stop Providing Approximately $4 Billion in Military Aid to Israel Annually On November 3, local time, US President Trump told the media that he had reached an agreement with Israeli Prime Minister Netanyahu to stop providing approximately $4 billion in military aid to Israel annually. Trump said, "We reached this agreement a few months ago, and they have no objections because Israel is a 'very successful country.' They don't need this aid, and by the end of this year, we will no longer provide aid." At the same time, Trump pointed out, "If Israel needs it, we will still provide assistance. They are very good allies." (CCTV News)

Domestic News

China Leads the World in AI Development Speed and Application Scale Currently, China leads the world in the speed of AI development and the scale of its applications, achieving positive results in shaping new drivers of economic development, improving people's well-being, and enhancing government governance. AI has now moved from single-point pilot projects to multi-stage collaboration in R&D, production, and distribution, demonstrating enormous potential in improving efficiency, reducing risks, and saving costs. (CCTV News) National Development and Reform Commission: Six Emerging Pillar Industries to be Cultivated During the 15th Five-Year Plan Period The National Development and Reform Commission (NDRC) introduced the relevant situation regarding the cultivation and expansion of new drivers of growth. Relevant officials stated that pillar industries are the foundation of the national economy and an important front for developing new quality productive forces. During the 15th Five-Year Plan period, six emerging pillar industries, including integrated circuits, aerospace, and biomedicine, will be the focus of cultivation, which is of great significance for accelerating the shaping of new drivers and advantages and promoting the smooth transition between old and new drivers of growth. Currently, relying on a comprehensive and large-scale industrial system, emerging pillar industries are developing well. (CCTV News)