Forex News
- USD/CHF rallies to 0.8325 after bouncing from session lows near 0.8290.
- Oil prices have bounced up amid reports of escalating tensions in the Middle East.
- Attacks from Russia on Ukrainian power plants are casting a shadow on the fate of the energy ceasefire announced by Trump.
The Swiss Franc (CHF) has turned lower on Monday and is retracing gains from the previous two trading days against the US Dollar, as tensions in the Middle East and a highly likely failure of the Russia-Ukraine ceasefire deal are dampening risk appetite. The USD/CHF pair trades at 0.8325 after bouncing from lows near 0.8290, approaching one-week highs, at the 0.8345 area.
Investors are wary of risk in a calm European trading session, which is providing some support to the US Dollar, although most USD crosses are trading within previous ranges, with trading volumes subdued amid a bank holiday in Japan and with US markets at half throttle due to the Columbus Day holiday.
Rising geopolitical tensions put a floor on Oil prices
In the absence of first-tier macroeconomic releases, gloomy news from the Middle East is driving markets and providing support to the safe-haven USD. The Iran-backed Houthis attacked Saudi Arabia’s King Khalid International Airport on Sunday, killing one person and injuring 11, after an alleged attack by Saudi forces on the Houthi-held airport of Sanaa in Yemen’s capital.
Meanwhile, news that Russia has attacked several power plants in Ukraine casts further doubts about a questionable energy ceasefire “agreement” announced by US President Donald Trump a few hours before. Brent Oil, which fell to a $100.66 low at the early Asian session, has retraced losses and returned to the $103.50 area, adding pressure on Oil-importing economies like Switzerland’s and dampening investors’ appetite for risk.
Looking ahead, Strategists at UOB Group maintain a steady medium-term stance on USD/CHF, reiterating assessing that the USD/CHF pair “has likely entered a range-trading phase between 0.8245 and 0.8365,” adding that they expect the pair to remain confined within this established consolidation band over the next 1–3 weeks.
Swiss Franc FAQs
The Swiss Franc (CHF) is Switzerland’s official currency. It is among the top ten most traded currencies globally, reaching volumes that well exceed the size of the Swiss economy. Its value is determined by the broad market sentiment, the country’s economic health or action taken by the Swiss National Bank (SNB), among other factors. Between 2011 and 2015, the Swiss Franc was pegged to the Euro (EUR). The peg was abruptly removed, resulting in a more than 20% increase in the Franc’s value, causing a turmoil in markets. Even though the peg isn’t in force anymore, CHF fortunes tend to be highly correlated with the Euro ones due to the high dependency of the Swiss economy on the neighboring Eurozone.
The Swiss Franc (CHF) is considered a safe-haven asset, or a currency that investors tend to buy in times of market stress. This is due to the perceived status of Switzerland in the world: a stable economy, a strong export sector, big central bank reserves or a longstanding political stance towards neutrality in global conflicts make the country’s currency a good choice for investors fleeing from risks. Turbulent times are likely to strengthen CHF value against other currencies that are seen as more risky to invest in.
The Swiss National Bank (SNB) meets four times a year – once every quarter, less than other major central banks – to decide on monetary policy. The bank aims for an annual inflation rate of less than 2%. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF.
Macroeconomic data releases in Switzerland are key to assessing the state of the economy and can impact the Swiss Franc’s (CHF) valuation. The Swiss economy is broadly stable, but any sudden change in economic growth, inflation, current account or the central bank’s currency reserves have the potential to trigger moves in CHF. Generally, high economic growth, low unemployment and high confidence are good for CHF. Conversely, if economic data points to weakening momentum, CHF is likely to depreciate.
As a small and open economy, Switzerland is heavily dependent on the health of the neighboring Eurozone economies. The broader European Union is Switzerland’s main economic partner and a key political ally, so macroeconomic and monetary policy stability in the Eurozone is essential for Switzerland and, thus, for the Swiss Franc (CHF). With such dependency, some models suggest that the correlation between the fortunes of the Euro (EUR) and the CHF is more than 90%, or close to perfect.
ING’s Frantisek Taborsky highlights a busy week for CEE with key inflation releases and IMF meetings, while regional FX remains driven mainly by global factors. ING keeps a broadly bearish stance on CEE currencies, expecting EUR/PLN to stay near 4.40 and the Forint exposed to higher energy prices and a stronger Dollar, while retaining a bullish view on the Koruna towards EUR/CZK 24.250.
Regional data under global FX headwinds
"This week’s focus is on regional inflation releases and speakers. Romania’s September inflation is due tomorrow; we expect it to rise from 6.2% to 6.4% and, consistent with the central bank’s guidance last week, increase further through year-end. In the Czech Republic, final data should confirm September inflation at 2.5%, while Czech National Bank core inflation is likely to edge up from 3.0% to 3.1-3.2%, above the central bank’s forecast."
"Poland’s headline inflation should be confirmed at 4.0% on Wednesday, followed by a likely drop in core inflation from 3.3% to 3.1% on Thursday, giving the National Bank of Poland more room to manoeuvre. Hungary releases wage data on Friday; wage growth remains high relative to the region and continues to pose inflationary risks."
"Beyond the data calendar, attention will turn to the IMF meetings in Bangkok, where CEE officials are expected to speak. Hungary may publish next year’s draft budget and medium-term fiscal outlook late in the week."
"CEE FX remains primarily driven by global factors, and our bearish regional bias is broadly unchanged. After the NBP meeting, EUR/PLN rose into our expected 4.380-4.400 range and is likely to stay near its upper end in the coming days."
"The forint is awaiting the government’s 2027 budget announcement but remains exposed to higher energy prices and a stronger US dollar. The koruna remains the outlier, supported by a wider interest-rate differential. We retain a bullish koruna view and expect EUR/CZK to move towards 24.250."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Silver prices (XAG/USD) fell on Monday, according to FXStreet data. Silver trades at $60.69 per troy ounce, down 0.22% from the $60.83 it cost on Friday.
Silver prices have decreased by 14.62% since the beginning of the year.
Unit measure | Silver Price Today in USD |
|---|---|
Troy Ounce | 60.69 |
1 Gram | 1.95 |
The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 68.83 on Monday, down from 68.96 on Friday.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
(An automation tool was used in creating this post.)
- EUR/JPY trades around 177.35 on Monday, posting a modest daily gain of 0.04%.
- Concerns over France's mounting debt and political instability weigh on the European currency.
- The Japanese Yen remains under pressure from Japan's expansionary fiscal policies.
EUR/JPY trades without a clear direction on Monday, hovering around 177.35 at the time of writing, posting a modest daily gain of 0.04%. The pair remains relatively stable as the Euro (EUR) faces pressure from political and fiscal uncertainty in France, while the Japanese Yen (JPY) struggles to regain strength amid concerns over Japan's public finances.
On the European side, the shared currency remains weighed down by growing concerns over France's public debt and the risk of contagion to other heavily indebted Eurozone economies. Political deadlock ahead of the 2027 presidential election, combined with rising social unrest, is undermining investor confidence and limiting the Euro's appeal.
France's fiscal difficulties are fueling concerns about the country's ability to stabilize its public finances amid ongoing political fragmentation. This situation could increase investor caution toward European assets and continue to weigh on the shared currency.
On the geopolitical front, markets are also monitoring developments surrounding the war between Russia and Ukraine. Ukrainian President Volodymyr Zelenskyy said on Monday that his country was ready to sign ceasefire guarantees, while calling on the United States (US) to ensure that Moscow complies with the agreement covering energy infrastructure.
The statement follows an announcement by US President Donald Trump that Russia and Ukraine have agreed to suspend attacks on energy facilities. A potential de-escalation of the conflict could help improve sentiment among European investors, although the effective implementation of the agreement remains uncertain.
In Japan, the Japanese Yen continues to struggle amid concerns over Prime Minister Sanae Takaichi's expansionary fiscal policies, against a backdrop of already elevated public debt. The prospect of increased government spending is fueling worries about Japan's fiscal outlook, limiting the Japanese currency's ability to strengthen.
However, expectations of further interest rate hikes by the Bank of Japan (BoJ) could provide some support for the Japanese currency. BoJ Governor Kazuo Ueda recently emphasized that monetary policy is shifting toward a more preemptive approach to inflation risks, rather than focusing solely on achieving the 2% inflation target.
Furthermore, Japanese real wages have increased for the eighth consecutive month, strengthening the case for continued monetary policy normalization. Sustained wage growth could support domestic consumption and allow the BoJ to consider additional interest rate hikes, helping to limit the Japanese Yen's losses.
Investors also remain attentive to the risk of intervention by Japanese authorities in the foreign exchange market in the event of excessive currency depreciation. This possibility could curb selling pressure on the Japanese Yen and limit the upside potential of EUR/JPY.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.09% | -0.01% | 0.10% | 0.06% | 0.17% | 0.20% | 0.28% | |
| EUR | -0.09% | -0.12% | -0.02% | -0.01% | 0.09% | 0.16% | 0.17% | |
| GBP | 0.01% | 0.12% | 0.13% | 0.05% | 0.17% | 0.27% | 0.28% | |
| JPY | -0.10% | 0.02% | -0.13% | -0.07% | 0.06% | 0.14% | 0.16% | |
| CAD | -0.06% | 0.00% | -0.05% | 0.07% | 0.13% | 0.16% | 0.22% | |
| AUD | -0.17% | -0.09% | -0.17% | -0.06% | -0.13% | 0.10% | 0.09% | |
| NZD | -0.20% | -0.16% | -0.27% | -0.14% | -0.16% | -0.10% | 0.02% | |
| CHF | -0.28% | -0.17% | -0.28% | -0.16% | -0.22% | -0.09% | -0.02% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
- USD/JPY gains some follow-through positive traction amid a combination of supporting factors.
- Japan’s fiscal woes undermine the JPY, while a hawkish Fed and Iran risks benefit the Greenback.
- Spot prices remain confined in a range ahead of US inflation data and Fed Chair Warsh’s speech.
The USD/JPY pair attracts buyers for the second straight day, though it lacks strong follow-through and trades below mid-158.00s during the first half of the European session on Monday. Moreover, spot prices remain confined in a familiar range held over the past two weeks or so, warranting caution before placing aggressive directional bets.
The selling bias surrounding the Japanese Yen (JPY) remains unabated due to growing market anxiety over Prime Minister Sanae Takaichi's expansionary fiscal policies and massive public debt. In fact, the government is reportedly considering another supplementary budget to be compiled by November and passed through parliament by the year-end. This, along with the underlying US Dollar (USD) bullish tone, acts as a tailwind for the USD/JPY pair and backs the case for additional gains.
Investors have been pricing out the possibility of a rate hike by the US Federal Reserve (Fed) at the late-October meeting, though expectations for a 25-basis-point (bps) increase in December remain firmly on the table. Moreover, the US-Iran standoff over the Strait of Hormuz, along with intensifying fighting between the Iran-backed Houthis in Yemen and Saudi Arabia, keeps the geopolitical risk premium in play. This further underpins the safe-haven USD and lends support to the USD/JPY pair.
Meanwhile, crude oil prices declined amid hopes that the Russian-Ukraine energy ceasefire will ease global fuel shortages, reducing inflationary risks. This comes on top of the recent minor pullback in US bond yields from multi-year highs and might hold back bulls from placing fresh bets on the USD/JPY pair. Traders might also opt to wait for this week's release of the latest US inflation figures and Fed Chair Kevin Warsh's speech at the annual meetings of the IMF and World Bank in Bangkok on Friday.
USD/JPY daily chart
Technical Analysis
The USD/JPY pair holds a mildly bearish near-term tone, though it remains capped beneath the 100-day Simple Moving Average (SMA) at 159.51. Spot prices hover just above the 50.0% Fibonacci retracement of the latest swing at 158.39, suggesting that while buyers are still defending this mid-range floor, the broader structure is pressured by the overhead 100-day SMA and higher Fibonacci retracements.
Meanwhile, initial resistance is located at the 100-day SMA at 159.51, followed closely by the 61.8% retracement at 159.69, forming a tight supply band, with further hurdles at the 78.6% level at 161.55 and the recent cycle high area near 163.90. On the downside, immediate support is seen at the 50.0% retracement at 158.39. A daily close below there would expose the 38.2% level at 157.09, ahead of deeper retracement supports at 155.48 and the base of the current Fibonacci leg around 152.88.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | -0.01% | 0.10% | 0.05% | 0.19% | 0.21% | 0.28% | |
| EUR | -0.08% | -0.11% | -0.04% | -0.04% | 0.08% | 0.17% | 0.18% | |
| GBP | 0.01% | 0.11% | 0.10% | 0.05% | 0.19% | 0.30% | 0.29% | |
| JPY | -0.10% | 0.04% | -0.10% | -0.06% | 0.09% | 0.15% | 0.17% | |
| CAD | -0.05% | 0.04% | -0.05% | 0.06% | 0.14% | 0.17% | 0.22% | |
| AUD | -0.19% | -0.08% | -0.19% | -0.09% | -0.14% | 0.09% | 0.08% | |
| NZD | -0.21% | -0.17% | -0.30% | -0.15% | -0.17% | -0.09% | 0.00% | |
| CHF | -0.28% | -0.18% | -0.29% | -0.17% | -0.22% | -0.08% | -0.01% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
HSBC Asset Management notes that global equities, including the S&P 500, have shown resilience as the index inches toward the 8000 level despite high Oil prices, a hawkish Federal Reserve and surging bond yields. The team highlights exceptional profit growth in 2026, but warns that EPS growth could cool in 2027 and remains concentrated in technology and commodities.
Equities climb despite yield pressures
"The Covid recovery was about huge doses of policy stimulus. The 2022 commodity shock dissipated as global economies rewired supply chains. And the post-Liberation Day experience has been a textbook example of fleeting geopolitical risk premiums."
"Markets have faced greater uncertainty over the past few years, contending with a once-in-a-century pandemic, commodity price spikes, and a breakdown in the established rules-based global order. Yet they have shown impressive resilience. This is being demonstrated once again as the S&P 500 inches toward the 8000 level despite the headwinds of high oil prices, a hawkish Fed, surging bond yields and an increasing focus on the existential risks posed by AI."
"What’s more, sticky bond yields pose a constant threat to the valuation arithmetic – the opportunity cost of buying stocks is now higher. We are seeing pockets of weakness in more rate sensitive parts of the market – the Russell 2000 is down by nearly 10% from its August highs, and lower-tier credit spreads have gapped out."
"This doesn’t necessarily mean the coast is clear. A market derating tells us that higher bond yields and geopolitics do matter. EPS growth might cool in 2027 and could be downgraded if the AI capex bonanza disappoints."
"But for the time being broader corporate fundamentals look robust enough to weather the storm."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The Euro weakens as France's political deadlock and rising yield spread spark fear of broader contagion.
- French political gridlock and widespread social unrest have severely dampened investor confidence, heavily depressing the Euro recently.
- Higher oil prices could strengthen the commodity-linked CAD, placing further downside pressure on the EUR/CAD cross.
EUR/CAD inches lower after posting modest gains in the previous day, trading around 1.5960 during European hours on Monday. The currency cross depreciated as the Euro remained subdued amid growing concerns that France’s spiraling debt crisis could spill over into other heavily indebted Eurozone nations. A toxic cocktail of political deadlock ahead of next year's presidential election and spreading social unrest in France has heavily weighed on investor sentiment, crushing the Euro over recent weeks.
France spread risk highlighted as OAT–Bund gap hits multi-year extreme
HSBC Asset Management points out that the 10-year OAT–Bund spread has now “widened to its highest level in 15 years,” underscoring how concerns over France’s fiscal trajectory and political backdrop are being reflected in sovereign bond pricing.
The EUR/CAD cross may further lose ground as the commodity-linked Canadian Dollar (CAD) may draw strength from bullish sentiment in the energy markets. Crude oil prices showed signs of regaining ground following a series of deadly attacks on Riyadh’s King Khalid International Airport by Houthi militants, including a Sunday strike that followed a previous attack leaving 12 dead and over 300 injured. The escalating violence has prompted US President Donald Trump to consider joining Saudi Arabia in retaliatory actions against the Iran-backed Houthis in Yemen.
Further heightening regional energy supply risks, a drone targeted an oil tanker near the Sohar anchorage off Oman over the weekend, just outside the strategic Strait of Hormuz. Despite recent signs of higher crude exports from the Persian Gulf, these persistent geopolitical threats highlight ongoing vulnerabilities in global oil shipping routes and continue to support crude prices.
Canada’s trade sovereignty stance weighs on exporters
Rabobank analysts highlight that Canada’s decision to prioritise “full sovereignty over trade decisions” is now feeding through to the real economy. They note that Canada “famously spurned the United States’ offer” of closer alignment, a move that has “come at a cost for Canadian exporters who had typically sent approximately two-thirds of their products into the US market.”
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- Gold scales higher for the third straight day amid a softer USD and the recent pullback in US bond yields.
- The Fed’s hawkish outlook and geopolitical uncertainties could help limit losses for the safe-haven buck.
- Traders also seem hesitant ahead of US inflation figures and Fed Chair Warsh’s speech later this week.
Gold (XAU/USD) extends its intraday retracement slide from a one-week high, hitting a fresh daily low around $4,170 during the early European session on Monday. The US Dollar (USD) attracts fresh buyers after a modest downtick amid the US Federal Reserve's (Fed) hawkish outlook, which, in turn, is seen as weighing on the non-yielding bullion.
Dollar upside risks linger as energy pullback cools bond rout
Brown Brothers Harriman’s Elias Haddad observes that a “modest pullback in energy prices eased the global bond sell-off and took some steam out of the USD rally.” However, he cautions that “US growth outperformance and strong foreign appetite for US securities keep USD risks skewed to the upside,” suggesting that any pause in Dollar strength may prove temporary.
Market participants have been pricing out the possibility of a rate hike at the late-October Fed meeting, though expectations for a 25-basis-point increase in December remain firmly on the table. According to CME Group's FedWatch Tool, traders are currently assigning around an 85% probability that the US central bank will raise borrowing costs again by the year-end. The bets were lifted by the September FOMC meeting minutes, released last Wednesday, which confirmed that policymakers still view inflation as the dominant threat to macroeconomic stability and back the case for further policy tightening.
In the Middle East, the Iran-backed Houthi group in Yemen escalated its campaign against Saudi Arabia, targeting Riyadh’s King Khalid International Airport with a mix of ballistic and cruise missiles, as well as drones over the weekend. The deadly attacks drew a Saudi vow of retaliation, with US President Donald Trump raising the possibility of joining strikes on the group and resuming attacks on Iran. Furthermore, Iran’s top security official declared Washington’s response to its proposal for reopening the strategic Strait of Hormuz insufficient. This keeps the geopolitical risk premium firmly in play.
The fundamental backdrop favors USD bulls and might continue to cap the Gold. Traders, however, might opt to wait on the sidelines ahead of the release of US inflation figures – Consumer Price Index (PPI) and Producer Price Index (CPI) on Wednesday and Thursday, respectively. Apart from this, Fed Chair Kevin Warsh's speech at the annual meetings of the IMF and World Bank in Bangkok on Friday would drive the USD and the non-yielding Gold. Nevertheless, the aforementioned factors suggest that the path of least resistance for the XAU/USD pair remains to the downside.
XAU/USD 4-hour chart
Technical Analysis
The precious metal currently trades near a confluence hurdle – comprising the 23.6% Fibonacci retracement and the 100-period Simple Moving Average (SMA) on the 4-hour chart. Despite this overhead supply, momentum is constructive, with the Relative Strength Index (RSI) at 63.9 edging toward overbought territory and the Moving Average Convergence Divergence (MACD) remaining positive and elevated. This, in turn, suggests that bulls are attempting to extend the rebound but still need a clean break above the immediate ceiling to regain firmer control.
Hence, a sustained move beyond the $4,215-$4,220 confluence would open the way toward the next Fibonacci resistance cluster at $4,303 and then $4,378, ahead of higher retracement barriers at $4,452, $4,558 and the cycle-high area near $4,693. On the downside, initial structural support emerges only much lower at the $4,100 mark ahead of the Fibonacci anchor around $4,063. A failure to defend that floor would signal that the broader downtrend is resuming and set the stage for a slide further below the $4,000 psychological mark.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
Ukrainian President Volodymyr Zelenskyy said during the European trading session on Monday that the nation wants the United States (US) to ensure that Russia honor the energy ceasefire announced over the weekend.
US President Trump announced through a post on Truth Social that both Russia and Ukraine have agreed to an energy ceasefire, a temporary agreement in which both parties agree to stop attacking energy facilities. Ukraine had been excessively attacking Moscow’s energy infrastructure to curtail its funding.
“Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine. Both parties have agreed. Do not break it!” Trump wrote.
Comments
If Russia rejects energy truce this winter, Ukraine will respond.
Russia must halt attacks on Ukraine energy infrastructure for us to stop refinery strikes.
Ukraine is prepared to honor energy ceasefire if Russia reciprocates.
Russian refineries did not catch fire last night.
Awaiting details of talks between Americans and Russians, this energy ceasefire could succeed.
Americans must ensure Russians honor energy ceasefire.
Ukraine ready to sign ceasefire guarantees.
Fewer internet bots active after Ukraine strikes on Yandex data centres.
We need American pressure on Russia, not sanctions relief so we can achieve an energy ceasefire.
Ready to discuss election if a full ceasefire is agreed.
Market reaction
While the comments from Ukrainian President Zelenskyy don't reflect any indication that he would be unwilling to cooperate on a ceasefire, there is a sharp recovery seen in oil prices. In European trade, the WTI Oil price has turned almost 1% positive to near $91.80 after recovery early losses.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
- US futures indices rise as oil prices may appreciate after deadly Houthi attacks on Riyadh’s airport prompt potential US action.
- Weak Consumer Sentiment and high Fed rate hike expectations for December keep investors cautious about economic growth.
- CME FedWatch tool suggests the probability of a Fed 25-basis-point rate hike this month is 19.4%.
Dow Jones futures advance by 0.21% to trade near 52,030 during European hours on Monday. S&P 500 futures gain 0.25% to around 7,880, while Nasdaq 100 futures rise 0.15% to near 31,150.
US stock futures post gains despite ongoing inflationary concerns, buoyed by expectations that crude oil prices could rise following deadly attacks on Riyadh’s King Khalid International Airport. The Houthi militants targeted the airport again on Sunday, just a day after an earlier strike left 12 people dead and over 300 injured. In response to the escalating violence, US President Donald Trump is considering joining Saudi Arabia in retaliatory actions against the Iran-backed Houthis in Yemen.
Economic data showed continued pressure on consumer sentiment, with the University of Michigan's Consumer Sentiment Index dropping to 46.3 in October, down from 48.1 in September and missing market expectations of 47.6. Meanwhile, expectations for Federal Reserve monetary policy shifted slightly: according to the CME FedWatch tool, the likelihood of a rate hike of at least 25 basis points this month fell to 19.4%, down from 24.4% the prior week. However, market participants remain confident in a year-end rate adjustment, pricing in an 86% probability of a rate increase at the Fed's December meeting.
These developments follow a strong performance on Wall Street last week, where all three major US stock indexes closed higher as a rally in technology shares helped offset anxieties surrounding rising bond yields and elevated oil prices.
Traders are bracing for a busy week as the third-quarter earnings season kicks off with reports from major financial institutions. JPMorgan, Goldman Sachs, Citigroup, and Wells Fargo are set to announce results on Tuesday, with Bank of America and Morgan Stanley following on Wednesday. In addition to corporate earnings, market participants will closely watch key inflation updates, with the September Consumer Price Index (CPI) and Producer Price Index (PPI) scheduled for release on Wednesday and Thursday, respectively.
Analysts at Rabobank highlight that the rally in US equities broadened out, with the S&P 500 closing “46 points higher at 7811” on Friday and posting “strong gains across the real estate, consumer discretionary, healthcare and financial sectors.”
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
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