【Evening Session】Markets Bet on Recession Gold Surges Frenetically

Gold:

Due to the escalation of tariff issues and the U.S. government shutdown, investors have flocked to gold for safe-haven purposes, while interest rate cut expectations have boosted the gold price. A credit crisis has emerged at U.S. regional banks, evoking investor’s memories of the 2023 Silicon Valley Bank collapse and triggering concerns about a repeat of the "Lehman Moment." As a result, markets are further betting on a credit recession.

Relevant data released this week shows that the macroeconomic outlook has weakened, and the risk of economic recession has intensified. Under such circumstances, the Federal Reserve’s interest rate cut at the end of October will be passive. This rate cut is not a sign of a "soft landing" for the economy, but rather a consequence of tensions in the financial system.

Mai Dong, an Investment Strategist at Zhisheng Research(exclusively invited by Plotio),opined that a credit recession will trigger an economic recession and may even lead to an economic crisis. This will fuel market tensions, pushing the gold price to surge again. Meanwhile, the Federal Reserve’s focus for interest rate cuts has shifted from addressing employment issues to preventing systemic financial risks.

Technical Analysis:On the daily chart, a bullish candle was closed, indicating a strong upward movement in the gold price.

On the 1-hour chart, the price continues to trade strongly above the 60/120-day moving averages. For today, focus on the support level at $4,300 below and the resistance level at $4,420 above.

Crude Oil:

According to relevant media reports, on 16 October (local time), U.S. President Trump posted on social media that he had a long phone call with Russian President Putin the same day, focusing on discussions about ending the Russia-Ukraine conflict and U.S.-Russia trade. The two sides decided to hold a new round of meetings in Hungary, but the specific time has not yet been determined.

In the early hours of today, the latest data from the U.S. Energy Information Administration (EIA) showed that U.S. crude oil inventories increased by 3.524 million barrels last week, far higher than the market’s expected increase of 288,000 barrels. Behind this data lies relatively sluggish consumption in the current U.S. crude oil market and severe inventory accumulation.

In the near term, the outlook for oil prices is somewhat pessimistic. With the Russia-Ukraine issue at a stalemate, coupled with the impact of the tariff war, oil prices may further test this year’s low or even fall lower.

Technical Analysis:On the daily chart, a small bearish candle was closed; on the daily timeframe, the price continues to decline and further tests the $55 level.

On the 1-hour chart, the market continues its downtrend, with the price trading below the 60/120-day moving averages. For today, focus on the support level at $55.20 below and the resistance level at $57.70 above.

U.S. Dollar:

The collapse of two U.S. regional banks has brought back painful memories of 2023 for market participants. Compared with the previous incident, this one may be a one-time minor event. However, amid the government shutdown, market panic has intensified, triggering massive sell-offs and a continued decline in the U.S. dollar.

Regarding the Euro, markets still maintain the view that the Eurozone economy will recover slowly, supported mainly by accommodative monetary policy and the gradual implementation of fiscal policy. At the same time, as the EU prepares to adopt more forceful reform measures, coupled with the fact that the Eurozone’s savings rate and willingness to save remain at a high level, the Euro still has room for appreciation in the future.

Technical AnalysisOn the daily chart, a bearish candle was closed; on the daily timeframe, the market has fallen below 98.50 and trades below this level.

On the 1-hour chart, the price trades below the 60/120-day moving averages, and the downtrend continues. For today, focus on the support level at 97.70 below and the resistance level at 98.30 above.

Nasdaq:

On the daily chart, the Nasdaq closed with a bearish candle; on the daily timeframe, the market’s decline is accelerating, and the price is highly likely to break below the 24,000 integer mark.

On the 1-hour chart, the price trades below the 120-day moving average, and the downtrend continues. For today, focus on the support level at 23,800 below and the resistance level at 24,500 above.

Copper:

On the daily chart, copper closed with a bearish candle; on the daily timeframe, the price is consolidating in the range of $4.75-$5.11.

On the 1-hour chart, the price trades below the 60/120-day moving averages, and the downtrend continues. For today, focus on the support level at $4.77 below and the resistance level at $4.95 above.

17 October Market Snapshot：

1.Trump and Putin will hold a meeting in Hungary, with the time to be determined.

2.U.S. regional banks have successively reported credit problems, triggering sell-offs in financial markets.

3.Bank of America Survey: Being long on gold has replaced being long on the "Magnificent Seven" U.S. stocks as the most crowded trade.

4.Both gold and silver prices hit new highs: gold reached a maximum of $4,378ounce, and silver reached a maximum of $54.45ounce.

17 October Key Data/Events Preview：

1.20:30 (Beijing Time): U.S. September Housing Starts (Annualized).

2.20:30 (Beijing Time): U.S. September Import Price Index (MoM).

3.00:15 (Beijing Time, next day): Fed’s Mary Daly delivers a speech.

4.01:00 (Beijing Time, next day): U.S. Oil Rig Count (for the week ending 17 October).

[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.]
In the event of any inconsistency between the English and Chinese versions, the Chinese version will prevail.This article is from Plotio. Please indicate the source when reprinting.