Overnight during the US trading session, the US Dollar Index firmly broke above the 102 level, hitting its highest level since April last year. Nevertheless, spot gold continued to fluctuate within the range of 4150-4190 US dollars per ounce, closing at 4177.12 US dollars per ounce, up 0.49%. Spot silver closed at 60.948 US dollars per ounce, a gain of 0.99%.
During Friday's ASIan session, spot gold opened at 4176.53 US dollars per ounce. It peaked at 4183.54 US dollars per ounce in early ASIan trading before dipping to an intraday low of 4133.63 US dollars per ounce and rebounding afterwards. At press time, gold was trading around 4160 US dollars per ounce, down 0.41% on the day.
The US Dollar Index surged and broke above 102 overnight, touching a high of 102.21, the highest since April last year. It finally closed at 102.04, up 0.56%. US Treasury yields fell across the board from high levels. The 2-year US Treasury yield dropped 9.8 bASIs points to close at 4.792%; the 10-year US Treasury yield fell 4.4 bASIs points to 5.246%; the 30-year US Treasury yield decreased 1.5 bASIs points to 5.616%.
International crude oil prices dipped briefly overnight and then resumed their rally. WTI crude oil closed at $92.98 per barrel, up 2.72%. Brent crude oil settled at $102.33 per barrel, rising 4.36%. US natural gas CFD price closed at $2.95 per million British thermal units, down 1.928%.
The three major US stock indexes rose overnight. At the close, the Dow Jones Industrial Average rose 20.75 points, or 0.04%, to 50926.80. The S&P 500 gained 15.12 points, or 0.20%, to 7666.66. The Nasdaq Composite climbed 10.53 points, or 0.04%, to 26871.60.
European major stock indexes closed lower across the board. The German DAX30 fell 1.03% to 24939.12. The UK FTSE 100 dropped 1.73% to 10422.36. France's CAC40 declined 1.62% to 7835.31. The Euro Stoxx 50 lost 1.55% to 6171.55. Spain's IBEX35 fell 2.28% to 18984.14. Italy's FTSE MIB dropped 2.25% to 50218.50.
The world's largest gold ETF, SPDR Gold Trust, saw its holdings increase by 0.855 tons from the previous trading day, with current holdings at 1056.551 tons. Holdings of the world's largest silver ETF, iShares Silver Trust, remained unchanged at 15352 tons.
The latest data released overnight showed that US Challenger Job Cuts in September stood at 43,281, the lowest level for the same period since 2022, compared with the previous reading of 52,881. US Initial Jobless Claims for the week ending September 26 were 197,000, versus expectations of 200,000. The prior figure was revised from 197,000 to 198,000.
US Construction Spending MoM for August was 0.9%, beating the forecast of 0%, while the prior reading was -0.50%. US ISM Manufacturing PMI for September came in at 54.5, compared with an expectation of 55 and a previous reading of 54.6. The final reading of US S&P Global Manufacturing PMI for September was 55.9, down from the prior 57.
Analysts said the US labor market remained resilient at the end of Q3. Initial jobless claims fell to the lowest level since July, and continuing jobless claims hit a three-year low. Still, some unemployed workers face long gaps between jobs. Earlier US consumer confidence surveys also showed residents' views on the job market deteriorated.
Another set of data showed US corporate layoffs declined in September, indicating companies have not cut jobs massively amid rising economic uncertainty. The labor market is still characterized by low layoffs and low hiring. The resilience of the job market is a key reason the Federal Reserve remains focused on inflation risks recently.
US manufacturing continued to grow in September, hitting a more than three-year high. Surging new orders prompted factories to boost output and hire more workers. Backlogs of orders kept rising and suppliers grew busier, suggesting accelerating economic growth, increased hiring and higher price metrics, which will fuel market speculation about further Fed rate hikes.
Several Fed officials delivered speeches overnight. Kashkari said he was not sure how high interest rates need to go and held no strong view on whether to raise rates in October. Collins stated she would not prejudge ahead of the next meeting. Schmid argued officials still have work to do on inflation. Bowman said there is no need for further rate adjustments this year. Cook noted the biggest risk next year is artificial intelligence, which has triggered inflation pressure without eASIng. Jefferson said inflation has stayed too high for too long and more time is needed to judge whether further rate hikes are necessary. Logan believed the Fed's policy stance has been off track and the Fed should raise interest rates.
US President Trump once again said overnight that Fed Chair Washburn should have voted against the recent rate hike decision. Trump complained that "good data" led to higher interest rates and stated US interest rates should drop to 1% or even lower. He also said high interest rates hurt the economy more than inflation, and a certain level of inflation helps repay debts.
US Treasury bonds kept being sold off, pushing the 10-year Treasury yield to the highest level since 2002. Some institutions adopting traditional stock-bond portfolios need to sell stocks and buy bonds to restore target allocation ratios. Institutional analysis estimates US pension funds may need to sell around $33 billion worth of stocks and reallocate funds to bonds, a relatively large scale among quarter-end adjustments since 2000.
Reports said the US government told Germany and France to use emergency diesel reserves to ease global fuel prices, or they may face a US diesel export ban. Trump said the ban would lower diesel prices but could put upward pressure on gasoline prices.
European countries are holding consultations on the diesel crisis and discussing the release of diesel inventories. Sources said Europe may hold as much as 400 million barrels of diesel in commercial stocks and reserves, and a release could lower global prices.
Sources revealed Trump recently rejected Iran's proposal to reopen the Strait of Hormuz in exchange for US concessions, and may ramp up military strikes against Iran after the November midterm elections. Trump downplayed concerns over US ammunition stockpiles, saying the US has "plenty of weapons", including lower-tier weapons.
Reports said the US military has deployed two additional Patriot missile defense systems to the Middle East in recent weeks to protect oil and gas facilities in Saudi Arabia and Qatar. If large-scale military operations resume, the US will need Saudi Arabia to allow use of its airspace. However, if Saudi Arabia believes its oil facilities cannot be protected, it is unlikely to approve US access to its airspace.
Trump said overnight Iran is ready to cave in and the US will win fairly eASIly. Large volumes of oil have been shipped through the Strait of Hormuz, and oil prices will fall again. Iranian President Pezeshkian said Iran will not shun dialogue with the United States.
Reports said the US is dispatching a third aircraft carrier strike group and more Marine amphibious ships to the Middle East, bringing an estimated additional 9,000 to 10,000 US troops. The troop build-up comes amid the failed US-Iran negotiations, as Trump plans to resume military strikes on Iran after the midterm elections. A spokesperson for the UN Secretary-General called the current US-Iran tensions worrying and hoped both sides can maintain dialogue mediated by Qatar, Pakistan and other countries.
A series of US data including Non-Farm Payrolls will be released tonight. Previously, the job market did not deteriorate significantly, job openings were below expectations, ADP Non-Farm rose to a mid-year high, initial jobless claims remained stable, and continuing jobless claims trended down. Combined with the relatively moderate August core PCE data, Fed officials have gradually diverged in their remarks on future rate hikes recently, and market expectations for a Fed rate hike in October have eased. The Non-Farm Payrolls data will exert a major impact on the Fed's subsequent policy, and market prices will fluctuate sharply then. Investors are advised to pay close attention.
From the daily gold chart, gold has traded in a range with alternating bullish and bearish candles over the past two days. Gold remains capped below the 5-day moving average, while support sits near the 4110 US dollar level. On daily indicators, short and medium-term moving averages form a bearish arrangement. The negative MACD histogram keeps expanding, and the RSI indicator hovers around the 40 level.
On the 4-hour gold chart, the BOLLinger Bands continue to narrow, and the three BOLLinger lines tend to flatten. The short-term EMA5 and EMA10 remain intertwined and flat. The negative MACD histogram gradually shrinks, and the RSI indicator runs around the 44 level. For short-term trading strategies, gold is expected to fluctuate mainly within the 4130-4200 range. A breakout to the upside targets 4208-4220 or near 4230; a downside breakout targets 4120-4110 or near 4100.
Key economic data and events to watch today:
17:00 Eurozone September CPI YoY Flash
17:00 Eurozone September CPI MoM Flash
20:30 US September Unemployment Rate
20:30 US September Non-Farm Payrolls Change (Seasonally Adjusted)
20:30 US September Average Hourly Earnings YoY
20:30 US September Average Hourly Earnings MoM
22:00 US August Factory Orders MoM
01:00 (Next Day) US Oil Rig Count for the week ending October 2
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