【Evening Session】Interest Rate Cuts Are a Done Deal, Gold Nears $4,400

Gold:

Federal Reserve Chair Jerome Powell stated that since the September FOMC meeting, the outlook for employment and inflation has not changed significantly, signaling further interest rate cuts ahead. Morgan Stanley noted that the U.S. labor market remains weak, which is a key reason for the Fed's continued rate-cutting cycle.

According to CME Group's "FedWatch Tool," the probability of a 25-basis-point rate cut by the Fed in October has risen to 99.4%, and the probability of a cumulative 50-basis-point cut by December stands at 98.6%. Investors continue to heavily bet on rate cuts, with expectations of an additional 100 basis points of cuts in the first half of next year.

Owen, a senior gold analyst at Zhisheng Research(exclusively invited by Plotio), commented that the U.S. government shutdown, which began earlier this month, has led to the delay in the release of September nonfarm payroll data. The CPI data is expected to be released this Friday, and employment conditions are anticipated to be "at best lackluster."

Technical Analysis:Gold maintains a bullish trend on the weekly and monthly charts, having surged over $1,000 since late August. On the hourly chart, gold resumed its upward movement yesterday (20 October), returning near the previous high of $4,380. The short-term trend is poised for further gains, with a break above this level targeting the $4,430 mark.

Crude Oil:

Recent escalating trade tensions have darkened the outlook for the global manufacturing sector. Data shows that despite winter heating demand, the actual demand for heating oil and jet fuel remains significantly lower than last year, reflecting weak demand growth.

The International Energy Agency (IEA) forecasts that the global crude oil market will see a supply surplus of over 4 million barrels per day next year, a substantial upward revision from its previous projection. Additionally, crude oil imports by Asian countries slowed markedly in September, with inflows dropping from 1.01 million barrels per day in August to 570,000 barrels per day.

Technical Analysis:Crude oil has been in a continuous downtrend in recent days, with bears holding absolute dominance. On the hourly chart, there are no clear signs of a rebound yet, but the decline has narrowed and appears to be in its final phase. In the short term, a break above $57.70 could signal the end of the downward trend, while downside support is focused on the $56 level.

U.S. Dollar:

Today marks the 21st day of the U.S. government shutdown. The temporary funding bill failed to pass the Senate for the 11th time yesterday, and there is still no clarity on when the shutdown will end. The fiscal stalemate has heightened concerns about slowing economic growth.

Nick Timiraos, a prominent journalist known as the "Fed's mouthpiece," reported that as the U.S. Treasury rebuilds its current balance, the ratio of bank reserves to bank assets has fallen below 13%. Rising concerns over a liquidity crisis have boosted safe-haven sentiment, which is supportive of the U.S. dollar's upside.

Technical Analysis:The U.S. dollar index remains in a low-range consolidation on the daily chart, with lower highs forming sequentially. On the hourly chart, it retreated after encountering resistance near the 99.50 level last week, but the broad oscillating upward structure that began on September 18th remains intact. Intraday downside support is focused on 98.40.

Nikkei 225:

The Nikkei 225 maintains an oscillating upward trend on the daily chart, with bulls in control. On the hourly chart, it trades in a broad oscillating uptrend, with frequent back-and-forth between bulls and bears, and the probability of further gains is high. In the short term, downside support is at 48,840; a break below this level would test 48,350, while upside resistance is concentrated around the 50,000 mark.

Copper:

Copper prices have been in a consolidation phase in recent days, primarily trading within the $4.84-$5.02 range, as bulls and bears await a clear directional breakout. Intraday downside support is at $4.84; a break below could target $4.75, while upside resistance is at $5.02.

21 October Market Snapshot:

1.White House official Hassett stated that the government shutdown may end this week; if not, the White House will consider taking tougher measures.

2.Reports indicate that Hamas is discussing the next phase of the Gaza ceasefire agreement in Egypt, including issues related to disarmament.

3.The Office of the U.S. Trade Representative has proposed imposing tariffs of up to 100% on Nicaragua.

21 October Key Data/Events Preview:

1.21:00 (GMT): The Federal Reserve hosts a Payment Innovation Conference focusing on stablecoins, artificial intelligence, and tokenization, with opening remarks by Fed Governor Christopher Waller.

[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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