【Hotspot Tracking】Further Rate Cut at Month-End Gold Destined to Surpass $4,400

In the early hours of 30 October, the Federal Reserve will hold another interest rate decision meeting. The latest data shows that the probability of the Fed cutting interest rates by 25 basis points in October is 98.3%, while the probability of keeping rates unchanged is 1.7%. The probability of the Fed cutting interest rates by a cumulative 50 basis points in December is 93.4%. From the perspective of market expectations, the Federal Reserve will continue to implement an accommodative interest rate policy. Against this backdrop, gold still has investment value and unlimited upside potential.

CPI Suspected of Leak  Rate Cut Magnitude May Increase

Due to the U.S. government shutdown, the Bureau of Labor Statistics has delayed the release of the September Consumer Price Index (CPI) report—originally scheduled for October 15—to 20:30 tonight. The market expects September inflation to rise by 0.4% month-on-month and 3.1% year-on-year, with the projected figures roughly in line with those of August. However, Bloomberg published an article titled "CPI Will Greenlight the Fed’s October Rate Cut" in the morning, and Goldman Sachs also released a report; both suggested that inflation may cool at a slightly more significant pace than the market anticipates. Before the data is officially released, many Wall Street investment banks have already started interpreting it in advance, raising suspicions of a data leak.

Currently, the market believes that tariffs have pushed up commodity prices, and inflation in September may still remain high. Of course, the CPI data will not change the outcome of the Federal Reserve’s October meeting. Judging from the recent remarks of Fed officials, they believe that interest rates are restrictive, and most officials tend to cut interest rates.

At present, the Federal Reserve pays more attention to the job market. If the job market continues to weaken, it will spread to the real economy and trigger a more severe recession. In this case, the market sentiment has continuously pushed up expectations for the Fed’s interest rate cut. Some even make aggressive predictions that the Fed will cut interest rates by 50 basis points—especially the new Fed official Stephen Miran, who is the most firm supporter of aggressive rate cuts.

New Turmoil in Russia-Ukraine Conflict  Risk Aversion Heats Up Again

On 22 October(local time), the U.S. announced sanctions on Russia’s two largest oil producers. According to the U.S. statement, the sanctioned entities include Rosneft and Lukoil, which together account for nearly half of Russia’s crude oil exports overseas. The U.S. Treasury Department also sanctioned a series of subsidiaries of these two companies in Russia—any entity directly or indirectly owned by them with more than 50% equity will be sanctioned. If the enforcement of sanctions is further strengthened, the winter offensive that Russia is planning on the Russia-Ukraine battlefield may be disrupted.

Winter is a period of advantage for Russia; however, its "special military operation" has not yet achieved its strategic goals, and Russia has not yet effectively occupied parts of the four eastern Ukrainian regions. If a ceasefire is implemented along the ceasefire line proposed by the U.S. and Europe, Russia may lose its advantages—a scenario Putin is unwilling to see. As such, fierce battles will continue on the Russia-Ukraine battlefield in the short term.

Mai Dong, an Investment Strategist at Zhisheng Research(exclusively invited by Plotio),opined that against the backdrop of expectations that the Federal Reserve may cut interest rates consecutively in October and December, coupled with geopolitical turbulence, the decline in gold prices is merely a correction. In the medium term, if the market corrects to the $3,900–$4,000 range, it will still be an opportunity to build long positions. Gold prices are expected to hit a new high within the year, reaching $4,400 or even higher.

[Important Disclaimer:The above content and views are provided by Zhisheng, a third-party cooperative platform, for reference only and do not constitute any investment advice. Investors who trade based on this information shall bear their own risks.]
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