Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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The rally in gold suffered a minor setback last Friday after trade tensions between the US and China showed signs of thawing. Market sentiment softened after President Trump mentioned that the proposed high tariffs on Chinese goods were probably not sustainable, while a spokesperson from the Chinese Ministry of Commerce admitted that the recent rare-earth export controls were more about national security than anything trade-related. Treasury Scott Bessent and Chinese Premier He Lifeng will meet later this week to discuss matters. The conciliatory tone has taken some of the edge off the precious metal trade for now, but it is too early to tell if the selloff will continue into this week. Gold started today’s session a little more timidly, although interestingly, cryptocurrencies were on the front over the weekend and early this morning.
The US government shutdown is stretching into its third week, with no end in sight. The closure of various government departments is playing havoc with data collection agencies, meaning traders are not getting the usual inflow of economic data. Nor is the Fed for that matter. Despite navigating in the dark, interest rate traders are still locked on to a 25-bps cut on the 29th of October, with admirable conviction. The US Bureau of Labor Statistics will throw markets a bone on Friday, in the form of its September CPI report. The figures, published weeks behind schedule, are likely to be the last piece of information the Fed will have to work with before next week’s decision. Yearly inflation is expected to rise to 3.1% according to forecasts. The void of economic data will in part be filled by earnings reports this week. Netflix (NFLX), GE Aerospace (GE) and Coca-Cola (KO) report on Tuesday; Tesla (TSLA), SAP and IBM follow on Wednesday; finally, everyone’s new favourite company Intel (INTC) are scheduled to release their latest earnings on Thursday.
Global events are lining up to suppress crude oil prices. De-escalation between Israel and Hamas has eased delivery fears in the area, while the Iraqi government recently announced plans to resume oil exports from the Kurdish region via Turkey, further adding to local supplies. Meanwhile, OPEC elected to increase crude production by 137,000 barrels per day earlier in the month and is expected to continue to ramp up production in the near future. Inventories are a mixed bag at the moment but the amount of crude oil held on tankers worldwide has increased significantly in recent weeks. On the other hand, further reconciliation between the US and China would likely result in increased industrial production, and therefore oil consumption, but the effects of such may not be felt for a while longer. Brent crude futures are down to $61 a barrel as of this morning.
Risk Warning : Trading derivatives and leveraged products carries a high level of risk.
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