OPEC's production increase plan limits oil price gains, thawing trade tensions weakens safe-haven demand, and gold prices fall below the 4,000 mark

Basic news

On Tuesday (October 28, Beijing time), spot gold was trading around US$3,993.84 per ounce. Gold prices fell more than 3% on Monday as signs of thawing trade tensions weakened the aversion to gold. At the same time, market participants are awaiting the Federal Reserve's interest rate decision this week; U.S. crude oil traded around $61.28 per barrel, and oil prices closed slightly lower on Monday as OPEC's oil production increase plan once again overshadowed hopes of reaching a trade agreement framework and the impact of the United States' reimposition of sanctions on Russia.

Stock Market

The major U.S. stock indexes hit a new closing high for the second consecutive day on Monday as investors were optimistic about the prospects of reaching a trade agreement and looked forward to the earnings reports of many large technology www.xmhouses.companies this week and the scheduled interest rate cut by the Federal Reserve.

Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said that Bessant’s statement enhanced market expectations for an easing of tensions.

Five of the "Tech Seven" - Microsoft, Apple, Alphabet, Amazon and Meta - will report earnings later this week, and these results will test whether the rally is sustainable. The current rally is fueled by optimism around growth and capital spending related to artificial intelligence (AI).

Wren said, "Five of the seven technology giants will announce their results this week. What the market wants to hear is that AI capital expenditures are being realized, and related revenue and profits are being realized."

The Dow Jones Industrial Average rose 0.71% to 47544.59 points; the S&P 500 Index rose 1.23% to 6875.16 points, closing above 6800 points for the first time; the Nasdaq Index rose 1.86% to 23637.46 points.

Three of the 11 major sectors of the S&P 500 index rose sharply. The www.xmhouses.communications services sector rose 2.3%, with Alphabet rising 3.6%. The technology sector closed up 2%, hitting a record closing high, and the Philadelphia Semiconductor Index rose 2.7%.

Qualcomm’s stock price soared 11%, making it the largest gainer among technology stocks, after the www.xmhouses.company released two AI chips for data centers and is expected to begin www.xmhouses.commercialization next year. AI chip leader Nvidia rose 2.8%, making the largest contribution to the S&P 500 index.

The consumer discretionary sector rose 1.5%, and Tesla rose 4.3%, boosted by optimism in trade negotiations. However, Christopher Brown, vice president of private wealth management at Synovus, said that even if an optimal trade agreement is reached, Tesla's valuation is still high and the rally may be unsustainable.

The consumer staples sector fell 0.27%, and the materials sector fell 0.25%. Shares of U.S.-listed rare earth miners retreated as the prospect of a trade deal eased concerns about supply disruptions. Critical Metals closed down 13.7%, NioCorp Developments fell 11.5%, and Ramaco Resources fell 2.6%.

China concept stocks listed in the United States generally rose. Alibaba, JD.com, and Pinduoduo rose between 2.7% and 3%, and Baidu rose 4.8%.

Data released last week showed that inflation has cooled, and the market is almost www.xmhouses.completely betting that the Federal Reserve will cut interest rates by 25 basis points on Wednesday. As the U.S. government shutdown delays the release of some key data, investors will pay close attention to www.xmhouses.comments from Federal Reserve Chairman Jerome Powell to determine whether they will continue to cut interest rates in December.

Gold Market

Gold prices fell below $4,000 an ounce on Monday as signs of a thaw in U.S. trade tensions dented the metal's safe-haven appeal while market participants awaited the Federal Reserve's interest rate decision this week.

Spot gold was trading at $4,002.29 an ounce, down 2.7%. Gold prices fell to $3,970.81 per ounce at the beginning of the session, the lowest since October 10. U.S. gold futures for December delivery fell 2.9% to close at $4,019.70.

David Meger, head of metals trading at High Ridge Futures, said: "A potential trade deal portends less demand for safe-haven assets such as gold."

In addition to technical selling, gold "is still falling further as trade tensions have subsided," said Jeffrey Christian, managing partner of CPMGroup.Up to 97%.

Spot silver fell 3.6% to $46.85 per ounce; platinum fell 0.4% to $1,592.03; palladium fell 1.8% to $1,402.98.

Oil Market

Oil prices ended slightly lower on Monday as OPEC's oil production increase plan once again overshadowed hopes of reaching a trade agreement framework and the impact of the United States' reimposition of sanctions on Russia.

Brent crude oil futures closed down about 0.5% at $65.62 a barrel; U.S. crude oil closed down 0.3% at $61.31. Both contracts fell about 1% in early trading.

Four sources familiar with the negotiations said the eight OPEC+ countries were leaning towards another small increase in December oil production at a meeting on Sunday, as Saudi Arabia struggles to regain market share.

Dennis Kissler, senior vice president of trading at BOK Financial, said: "Crude oil futures are taking a breather from last week's sharp rise as trade tensions ease and most differences are expected to be resolved."

Concerns about sluggish demand have dragged down the market, with Brent crude falling to its lowest since May earlier this month, but renewed U.S. sanctions on Russia and stronger-than-expected U.S. demand helped boost oil prices.

OPEC and its allies changed course this year, reversing previous plans to cut production in an effort to regain market share, which has helped curb oil prices to some extent.

Foreign Markets

The U.S. dollar weakened against the euro and the Australian dollar on Monday as optimism about a possible trade deal boosted risk appetite and reduced demand for the U.S. dollar. Overall moves in currency markets were relatively muted as traders awaited several key central bank meetings this week.

Marc Chandler, chief market strategist at Bannockburn Global Forex, said the market was a little excited, noting that global stocks rose strongly while gold fell. Chandler said that there are three major developments that make the market happy. "The trade situation has eased, the United States has reached foreign trade agreements or cooperation frameworks with some East Asian countries, and Milley's performance in Argentina has also been better."

Argentine President Milley's party easily won the mid-term legislative election, and voters authorized him to continue to promote economic reforms.

The U.S. dollar index fell 0.11% in late trading to 98.84; the euro rose 0.15% to $1.1643.

Central bank actions are likely to dominate market trends later this week, with the Federal Reserve and the Bank of Canada expected to cut interest rates on Wednesday, while the European Central Bank and the Bank of Japan are likely to keep interest rates unchanged on Thursday.

With the Fed's 25 basis point interest rate cut already a certainty, the market will be closely watching for any signs that the central bank may be preparing to end its quantitative tightening program.

The Australian dollar rose 0.63% against the US dollar in late trading, at 0.6$554. Relatively hawkish www.xmhouses.comments from the RBA chairman also boosted the Australian dollar.

RBA Chairman Bullock said on Monday that a 0.9% rise in core inflation in the third quarter would be a "significant deviation" from the forecast, and the board must take this factor into consideration when deciding whether to cut interest rates next week.

Traders are also eyeing a meeting between Trump and Japan's new Prime Minister Takaichi Sanae on Tuesday, where the two leaders will discuss trade issues. The yen has weakened in recent weeks on concerns that Sanae will pursue a more expansionary fiscal policy. USD/JPY was roughly flat on the day at 152.92 yen.

Investors are further paying attention to any signs of when the U.S. federal government will reopen. It is expected that the longer the shutdown lasts, the greater the hit to the U.S. economy.

As the federal government shutdown enters its 27th day, air traffic controller absenteeism has surged. Turmoil in air travel has intensified, with more than 2,700 flights delayed nationwide on Monday and more than 8,600 flights delayed on Sunday.

International News

Hungarian Prime Minister: The meeting between the Russian and American presidents will definitely be held in Budapest

Hungarian Prime Minister Orban said on October 27, local time, that although the meeting between the Russian and American presidents originally scheduled to be held in Budapest, the capital of Hungary, has been postponed, the meeting will definitely be held in Budapest. Currently, relevant negotiations are still ongoing. Orban also said that if peace can be achieved in the Russia-Ukraine conflict, energy prices will fall. He said that for Hungary, it must fight to continue importing Russian oil and natural gas.

The President of Mexico said that the United States has agreed to extend the deadline for trade negotiations

On October 27, local time, Mexican President Sheinbaum said that U.S. President Trump has agreed to once again extend the deadline for the two countries to reach an agreement on trade, security and immigration issues. Sheinbaum said she and Trump had a very brief and friendly phone call last week, in which both sides agreed that their respective officials would continue to work and that Trump would not impose additional tariffs. She said both sides agreed that progress was going very well and that they would hold talks in the www.xmhouses.coming weeks to try to reach an agreement.

Venezuela’s Attorney General: The United States is trying to overthrow the Venezuelan government

Recently, the United States has stepped up its deployment of warships and troops in the Caribbean and held joint military exercises, which has been strongly condemned by Venezuela. The Attorney General of Venezuela said in an interview that the United States is trying to overthrow the Venezuelan government. Venezuelan Attorney General Tariq William Saab said in an interview that the United States is undoubtedly trying to overthrow the Venezuelan government and engage in regime change. He also accused the United States of trying to plunder Venezuela's natural resources such as gold, oil, and copper. Regarding the possible ground invasion of Venezuela by the United States, Saab said that this kind of thing should not happen, but Venezuela is also prepared for this possibility. He added that the so-called U.S. actions against drug trafficking are not legal, but Venezuela is still willing to resume dialogue with the United States.

Trump may replace the Chairman of the Federal Reserve at the end of 2025

Trump may replace the Chairman of the Federal Reserve at the end of 2025, although Powell will serve until 2026. Powell's resistance to major interest rate cuts contrasts sharply with Trump's economic goals. September's 25 basis point interest rate cut, as well as jitters within the Federal Open Market www.xmhouses.committee (FOMC), further heightened tensions. The market may experience fluctuations of 1%-2%, which is similar to market performance during past Fed-related changes.

The 9th Saudi Arabia “Future Investment Initiative” Conference focuses on creating new areas of economic growth

The 9th Saudi Arabia “Future Investment Initiative” Conference opened on the 27th in Riyadh, the capital of Saudi Arabia. The theme of this conference is "Key to Prosperity: Opening up a New Frontier for Growth". Participants will conduct in-depth discussions on investment strategies and innovative solutions to promote sustainable growth in today's www.xmhouses.complex global landscape. This conference will hold a series of special sessions to discuss topics such as the impact of artificial intelligence and robotics on productivity, the geoeconomic impact of resource scarcity, changes in the global labor structure, and strategies to balance economic growth and environmental sustainability. The Future Investment Initiative conference is the largest international investment and innovation forum in the Middle East. This conference will last for four days and attract more than 8,000 representatives from many countries and regions around the world. About 650 political and business figures will speak at the conference.

Trump: I don’t want to meet the Canadian Prime Minister “for a long time”

On October 27, local time, when asked whether he planned to meet Canadian Prime Minister Carney during the 32nd Asia-Pacific Economic Cooperation (APEC) Informal Leaders’ Meeting in South Korea, U.S. President Trump said, “I don’t want to meet him, and I won’t meet him for a long time.” It is reported that Trump and Carney had previously participated in the ASEAN meeting in Malaysia, but the two sides did not meet. Canadian Prime Minister Carney said in Kuala Lumpur on the 27th that he had not spoken with Trump since Trump announced the termination of negotiations with Canada on the 23rd. Carney said he was still ready to talk to Trump and Canada was always ready to sit down and talk. Canada-US trade negotiations have made considerable progress before. But if the United States is not prepared to resume negotiations, Canada will continue to build a diversified domestic economy and development partnership.

Domestic News

China Securities Regulatory www.xmhouses.commission: Optimize transaction settlement and facilitate investment operations

Improve the efficiency of fund transfer and verification. Within the framework of existing laws and regulations, custodians and securities www.xmhouses.companies are guided to optimize service quality and operational efficiency, shorten the time for fund transfer, account entry, confirmation and other processes, and further improve the efficiency of intermediaries’ verification of funds arriving during trading days. Improve the efficiency of securities account operations. To better meet the demands of asset management institutions to optimize transaction execution and treat product investors fairly, it will provide technical support such as one-time collection and transfer of securities accounts for foreign investors using "Qualified Foreign Investor-Customer Funds", and simultaneously strengthen penetrating reporting on this account.Send request. Actively study and respond to reasonable demands of foreign investors such as appropriately expanding securities transfer situations. Improve the transparency of regulatory requirements for investment operations. The "Regulations on Issues Concerning the Implementation of the Measures for the Administration of Domestic Securities and Futures Investments by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors" were revised to implement measures such as improving account operation efficiency, optimizing cross-border investment model management methods, and enhancing the transparency and predictability of policies and rules.

He Lifeng attended the opening ceremony of the 2025 Financial Street Forum Annual Meeting and delivered a speech

The 2025 Financial Street Forum Annual Meeting opened in Beijing on the 27th. He Lifeng, member of the Political Bureau of the CPC Central www.xmhouses.committee and Vice Premier of the State Council, attended the opening ceremony and delivered a speech. Yin Li, member of the Political Bureau of the CPC Central www.xmhouses.committee and Secretary of the Beijing Municipal Party www.xmhouses.committee, attended the opening ceremony. He Lifeng pointed out that during the "14th Five-Year Plan" period, under the strong leadership of the Party Central www.xmhouses.committee, the development of the financial industry has achieved remarkable results. The "15th Five-Year Plan" is a critical period for China to basically realize socialist modernization. It will also be a critical period for promoting high-quality financial development and accelerating the construction of a financial power. The financial system must participate in the implementation of the country's "15th Five-Year Plan" with high quality, translate the strategic directions and major measures determined by the Party Central www.xmhouses.committee into concrete actions, unswervingly follow the path of financial development with Chinese characteristics, unswervingly promote risk prevention, strengthen supervision, promote high-quality development, and steadily promote a higher level of opening up in the financial field. The financial system must go all out to support the www.xmhouses.completion of the main goals and tasks of the "15th Five-Year Plan" and contribute more to the www.xmhouses.comprehensive advancement of building a strong country and national rejuvenation with Chinese-style modernization. He Lifeng emphasized that the world is currently undergoing major changes unseen in a century, and the global financial market is facing both challenges and opportunities. China is willing to work with all parties to actively participate in research on global financial governance, steadily promote new progress in global financial governance reform, and contribute Chinese wisdom and Chinese strength to maintaining a fair and just international economic and financial order and promoting the stable development of global finance. He Lifeng pointed out that Beijing has a profound economic and financial background and will actively support Beijing to further optimize the financial development ecology based on the strategic positioning of the "four centers" city, deepen financial reform and opening up, and promote high-quality financial development in the capital.

The above content is all about "[XM Group]: OPEC production increase plan limits oil price increase, thawing trade tensions weakens hedging demand, gold price falls below 4,000 mark", it is carefully www.xmhouses.compiled and edited by the XM foreign exchange editor, I hope it will be helpful to your trading! Thanks for the support!

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