Gold Back Above $4,100 | Oil Slide Fails to Hold | Critical Week for Global Markets Begins

Global markets opened the week volatile. Gold retreated after breaking above $4,200, while oil recovered much of its morning losses. Meanwhile, the release of US inflation data and the start of the corporate earnings season have put investors on the eve of a decisive week.

world economy; Daniyal Rahimi; Global markets started trading in the second week of October when two political developments have changed the expectations of energy market participants in opposite directions. Attacks on Riyadh airport and oil tankers in the region increased the concern of disruption of oil supply; On the other hand, Donald Trump's promise to stop attacks on the energy infrastructure of Russia and Ukraine and to supply more Russian diesel fuel strengthened the hope of reducing the pressure on fuel prices. The result of this conflict was the extreme volatility of oil in the first trading hours; The volatility that spread to the metal and stock market.

But what will determine the direction of the markets in the rest of the week, more than anything, is related to the US inflation and the next decision of the Federal Reserve. The minutes of the September meeting of the Federal Reserve Bank of America, which was published last Wednesday, showed that most policymakers consider another increase in interest rates necessary by the end of the year. Concerns about the sustainability of energy inflation and the pressure of large investments in artificial intelligence on the demand of the economy also played a role in this decision. Investors are now waiting to see how well the latest inflation data confirms these concerns.

gold; The rise above $4200 did not last

Global gold started Monday's trading with growth and advanced to the range of $4,210 per ounce in the early hours, but failed to maintain its position above the $4,200 mark and retreated to $4,177 by noon.

The initial drop in oil prices and bond yields helped support gold at the start of trading. However, investors' caution on the eve of the September US inflation release limited the upward trend.

The Wall Street Journal also pointed out the difficulty of stabilizing gold at levels above $4,200. The importance of Wednesday's inflation report comes from the fact that higher-than-expected increases in prices can strengthen the possibility of the continuation of the contractionary policy of the Federal Reserve; Conditions that are usually not favorable for gold.

On the other hand, lower-than-expected inflation releases may reduce the pressure on bond yields and the dollar, and provide the basis for a recovery in gold prices.

Silver sat back; Mes took a different path

Silver, along with gold, lost part of the initial growth. After crossing $61, the price of this metal returned to around $60.75 per ounce. The silver market continues to be influenced by US interest rate expectations and a change in the monetary policy outlook can affect its volatility.

But unlike precious metals, copper had positive transactions. Copper futures on Comex rose 0.61 percent to around $6.73 per pound.

Concerns about production disruptions in mines and hopes of strengthening Chinese demand have supported copper prices.

Meanwhile, a new Reuters report shows that the possibility of imposing tariffs on US refined copper imports has moved a significant amount of this metal's reserves to US warehouses over the past months and increased the price difference between the New York and London markets.

oil; From leaping with Riyadh's attacks to retreating with Trump's message

The oil market had the most volatile start to the week among major commodities. After an initial rise to $105.63, Brent fell to $102.33 on news of Russian supply, but later recovered most of its losses and returned to around $104.51 per barrel; The price was still 0.42% lower than the opening rate.

US West Texas Intermediate oil rose to $91.49 after touching the floor of $89.61, and its decline was limited to 0.37% compared to the beginning of trading.

According to Bloomberg, the attacks on Riyadh initially increased the market's concern about the security of infrastructure and energy transmission routes. However, the announcement of an agreement between Trump and Putin to facilitate Russian diesel exports, along with the return of some of the suspended production in the Gulf of Mexico, put new pressure on prices.

In the meantime, Trump's promise about the Russia-Ukraine energy ceasefire is still unclear. Moscow has not confirmed the announced agreement and Kiev has also expressed ignorance of its details. Continued attacks on oil tankers in the region have not allowed supply concerns to subside completely.

In its latest evaluation, Goldman Sachs has increased the price forecast of Brent oil in December from 85 to 90 dollars. However, analysts of this bank still expect the gradual improvement of Middle East supply to reduce some of the pressure on oil prices in the rest of the year.

The dollar strengthened again; The pressure on the euro and the yen continued

In the currency market, the initial drop of the dollar did not last long. The US dollar index (DXY) reached 102.316 units and at the same time, the euro retreated to $1.11910.

The dollar also strengthened against the Japanese currency and its parity rate reached 158.438 yen; A development that indicates the continued pressure on the Japanese currency.

According to Reuters, the aggravation of geopolitical risks in the Middle East, the expectation for the release of US inflation and French financial concerns have been the most important factors of investors' caution in currency transactions.

The release of inflation statistics on Wednesday can clarify the direction of the dollar; Especially if the outcome of the report changes the market's expectations about when the next interest rate hike will happen.

Wall Street; Positive futures, bond market closed

On the eve of the reopening of Wall Street, US stock futures showed limited gains. S&P 500 and Nasdaq 100 futures were up about 0.3 percent, according to Reuters' European update.

The S&P 500 index ended Friday trading at 7811.51 points and the Nasdaq at 27366.17 points. The American stock market will reopen today at 17:00 Tehran time.

On the other hand, cash transactions of US Treasury bonds will not be held on the occasion of the Columbus Day holiday. The yields of two-year and ten-year bonds were 4.80 and 5.24%, respectively, at the end of trading on Friday.

The market is still counting on the October pause

Data from the Fedwatch tool shows that traders have considered an 81.2 percent chance of interest rate stabilization for the October 28 meeting of the Federal Reserve. The probability of an increase of 25 basic units was also 18.8 percent.

For the December 9 meeting, the probability of the interest rate being higher than the current range is about 84.8%.

This difference between the two meetings shows that the market, despite the Federal Reserve's concern about inflation, expects policymakers to wait more in October to review economic data and postpone the next possible decision to December.

next week; Test of inflation and profitability of American companies

The economic calendar this week has several important events in front of investors. From Tuesday, the release of financial reports of major American banks will begin; Reports that will clarify the profitability of companies and the consequences of high interest rates.

The most important data of the week will be published on Wednesday, October 14, at 16:00 Tehran time.

Economists polled by Reuters expect the US consumer price index in September to have increased 0.6 percent from the previous month and 3.7 percent from a year ago.

On Friday, October 16, Kevin Warsh, the head of the Federal Reserve, will have a conversation with Kristalina Georgieva, the managing director of the International Monetary Fund, at 7:00 a.m. in Tehran.

Global markets have started the week reacting to political developments, but their continuation will largely depend on economic data. The outcome of US inflation could change interest rate expectations, and corporate financial reports will also show how well Wall Street can sustain growth amid high funding costs.