During Thursday’s ASIan session, spot gold opened at $4114.72/oz. It edged higher from the daily low of $4103.23/oz to a peak of $4143.10/oz before retreating into consolidation. At press time, gold trades near $4127/oz, with its intraday gain narrowing to 0.40%.

The US Dollar Index traded sideways at elevated levels during the session, hitting a high of 102.39 and a low of 102.14. It last stood at 102.34, up 0.06%. The 2-year US Treasury yield rose 3.7 bASIs points to 4.807%; the 10-year yield climbed 4.1 bASIs points to 5.327%; the 30-year yield increased 3.7 bASIs points to 5.71%.

As US Treasury yields advanced, eurozone government bond yields moved higher in tandem. French bonds faced notable pressure: France’s 10-year bond yield rose 5.8 bASIs points to 4.910%, while Germany’s 10-year yield gained 1.9 bASIs points to 3.506%.

International oil prices surged today amid escalating Houthi attacks on Saudi Arabia and production shutdowns in the US Gulf of Mexico. WTI crude was quoted at $91.72/bbl, up 3.22%; Brent crude stood at $104.16/bbl, rising 3.33%. US natural gas CFD climbed 1.212% to $3.258 per MMBtu.

In equities, China’s three major A-share indices edged higher at the open before sliding throughout the morning, with losses widening in the afternoon. At the close, total turnover on the Shanghai and Shenzhen bourses reached 1.68 trillion yuan, an increase of 244.1 billion yuan from the previous session. More than 3,700 stocks declined across the market. The Shanghai Composite Index fell 30.29 points or 0.79% to 3811.9; the Shenzhen Component Index dropped 266.72 points or 2.07% to 12620.9; the ChiNext Index lost 98.62 points or 3.15% to 3036.66.

Major Hong Kong stock indices opened lower and extended losses. The Hang Seng Tech Index hit a stage low. At the close, total market turnover for the Hang Seng Index reached HK$207.255 billion. The Hang Seng Index declined 344.71 points or 1.43% to 23785.79; the Hang Seng Tech Index fell 121.11 points or 2.89% to 4073.38; the Hang Seng China Enterprises Index lost 71.82 points or 0.89% to 8010.58; the Hang Seng China Red Chip Index rose 21.51 points or 0.54% to 4029.81.

European stock markets opened broadly lower this afternoon. Germany’s DAX30 opened down 0.79%, France’s CAC40 down 0.64%, Euro Stoxx 50 down 0.98%, Spain’s IBEX35 down 1.00%, Italy’s FTSE MIB down 1.46%, and UK FTSE 100 down 0.75%.

This afternoon, Shanghai Gold Exchange’s Au(T+D) closed down 1.69% at 891.50 yuan/g; Ag(T+D) closed down 3.72% at 14336 yuan/kg.

Latest data released today showed Germany’s seasonally adjusted August trade balance came in at €19.5 billion, versus expectations of €19.0 billion. The prior reading was revised from €21.3 billion to €21.1 billion. Germany’s seasonally adjusted August import monthly change stood at 0.9%, below the forecast of 2.6%, with the prior figure revised from -5.70% to -5.50%. Germany’s seasonally adjusted August export monthly change was -0.8%, compared with an estimate of 0.6%, unchanged from the prior reading of -0.80%.

German exports fell again in August, pointing to peRSIstent weakness in global demand. Meanwhile, France’s fiscal woes may create further headwinds. France accounts for more than 7% of Germany’s total exports, meaning a slowdown in the French economy will likely spill over to Germany.

The Governor of the Bank of France stated that geopolitical shocks stemming from the Middle East crisis are spilling over into all economies, even those with sound public finances. Oil prices are strongly correlated with US long-term interest rates and European rates. Rising rates impact all nations regardless of their fiscal position.

Analysts noted that the Federal Reserve’s September meeting minutes released overnight indicated the Fed still expects another rate hike this year, which continues to underpin the US Dollar. Markets are currently pricing in a 25-bASIs-point rate increase in December and further policy tightening in 2027. In addition, the solid results of last night’s 10-year US Treasury auction demonstrated robust market demand for US bonds as long as yields remain attractive. This lends good support to the US Dollar, allowing it to strengthen amid a challenging investment environment.

ECB Governing Council member Moulin said geopolitical shocks are translating into financial shocks and inflation is clearly 100% energy-driven with no secondary effects. ECB Governing Council member Dorenz stated that peRSIstently high inflation supports the case for lifting policy rates to more restrictive levels.

Reportedly, vessel traffic through the Strait of Hormuz dropped to its lowest level in more than two months, and last week saw the highest frequency of tanker attacks since the outbreak of the Iran war. In commodity markets, European diesel prices surged sharply. Oil prices rose further as the US weighs launching military strikes against Iran before the midterm elections.

Reports said the Trump administration originally hoped to demonstrate overwhelming US military power via strikes on Iran. Yet after seven months of war, US troop deployments have become constrained. The US has withdrawn personnel from bases in Bahrain, Kuwait, the UAE and Qatar, all of which sit within range of Iranian missiles and drones, with some facilities suffering heavy damage.

Israel’s Foreign Minister stated that in response to a series of unilateral sanctions imposed by the UK government against Israel, Israel has formally closed the British Consulate in Jerusalem and ordered the British Consul General together with 20 diplomats to leave the country effective today.

From the daily gold chart, gold dipped to near $4066 yesterday and found support for a rebound, yet upside was limited today. Prices remain capped below the 5-day and 10-day moving averages. On daily indicators, the MACD negative histogram peRSIsts, while the RSI hovers near the 39 level.

On the 1-hour gold chart, gold traded sideways between the middle and upper BOLLinger bands during the session. The short-term EMA5 and EMA10 have flattened and converged. The MACD negative histogram has shrunk toward the zero line, and RSI trades near 53. For evening short-term trading, continue watching gold’s rangebound movement between $4100–$4160. A breakout to the upside targets $4175–$4185 or near $4200; a downside breakout targets $4090–$4080 or near $4070.

Key economic data and events to watch tonight:

19:30 ECB releases minutes of its September monetary policy meeting

20:15 Bank of England Governor Bailey delivers a speech

20:30 US Initial Jobless Claims for the week ending October 3

22:00 US August Wholesale Sales MoM

22:30 US EIA Natural Gas Storage for the week ending October 2

01:40 (next day) Fed’s Musalem speaks

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