Oil prices weigh conflicting signals, Fed officials cautious about rate cuts; Gold prices retreat from three-week high

Basic news

On Friday (November 14, Beijing time), spot gold was trading around US$4,180 per ounce, and the price of gold hit a three-week high of 42 on Wednesday. It fell back after 44.96 US dollars per ounce, giving up early gains that may have boosted expectations for an interest rate cut after the U.S. government reopened, although the market expected that after the U.S. government reopened, it would release economic data showing a weak labor market, which may push the Federal Reserve to cut interest rates in December. However, as Federal Reserve policymakers have recently expressed caution about further interest rate cuts, market sentiment has quickly turned; U.S. crude oil traded around $58.89 per barrel, and oil prices were stable on Wednesday as the market weighed continued concerns about global oversupply and possible supply disruptions caused by sanctions on Russia's Lukoil.

Stock Market

U.S. stocks suffered their biggest one-day drop in more than a month on Thursday, with all three major stock indexes closing lower. The share price of artificial intelligence giant Nvidia plunged 3.6%, and Tesla plunged 6.6%, dragging down the overall performance of the technology sector. The sell-off was mainly due to investors' continued concerns about inflation and disagreements within the Federal Reserve over the economic outlook, which led to a significant cooling of market expectations for interest rate cuts.

The S&P 500 Index fell 1.66% to close at 6737.49 points; the Nasdaq Index fell 2.29% to 22870.36 points; the Dow Jones Industrial Index fell 1.65% to close at 47457.22 points. The consumer discretionary and information technology sectors led the decline, with declines of 2.73% and 2.37% respectively.

With many Federal Reserve policymakers signaling caution about further easing policy, the market’s expected probability of a rate cut in December has plummeted to about 47% from 70% last week.The fundamental question, analysts say, is whether tariff inflation is only temporary, which is why some Fed governors are reluctant to cut interest rates.

There is obvious sector rotation in the market. The S&P 500 value stock index has risen by about 1% so far this week, while the growth stock index has fallen by 0.6%, reflecting that funds are moving from highly valued technology stocks to other sectors. Economists said: We are experiencing a small market correction in the field of artificial intelligence, and we are seeing the market rotate.

In terms of individual stocks, Disney fell 7.8%, while Cisco bucked the trend and rose 4.6% as it raised its performance forecast. Although the government's 43-day shutdown ended, ADP data showed that the labor market continued to weaken, with private xmxyly.companies laying off more than 11,000 people per week, casting a shadow on the market recovery.

Gold Market

Gold prices fell back from a three-week high hit early in the session on Thursday, with spot gold falling 1.1% to $4,151.86 an ounce, giving up early gains that may have boosted expectations for an interest rate cut after the U.S. government reopened. Spot silver fell 2.3% to $52.18, while platinum and palladium fell 2.8% and 3.7% respectively.

Gold prices surged to $4,244.96 in early trading, the highest level since October 21, as the market expected that the government would release economic data showing a weak labor market after reopening, which may prompt the Federal Reserve to cut interest rates in December. However, market sentiment has quickly turned as Federal Reserve policymakers have recently expressed caution about further interest rate cuts.

Traders pointed out: This is a typical buying news and selling facts market - after the U.S. government reopened, the market suffered a xmxyly.comprehensive sell-off. Although the Federal Reserve cut interest rates last month, Chairman Jerome Powell emphasized that further easing is not certain, and persistent concerns about inflation have prompted traders to reassess the outlook for interest rates.

Precious metals markets were caught up in a broad sell-off in stocks, bonds, the U.S. dollar and cryptocurrencies, analysts said. As market expectations for a rate cut by the Federal Reserve cool and investors take profits after the government shutdown ends, gold prices are likely to remain under pressure in the short term, but remain above key technical support at $4,150.

Oil market

Oil prices were stable on Thursday, with Brent crude oil futures rising slightly by 0.5% to US$63.01 per barrel; U.S. crude oil rose by 0.3% to US$58.69 per barrel, recovering some of the ground lost after falling 4.2% on Wednesday.

Markets are simultaneously weighing conflicting signals: ongoing concerns about a global supply glut, on the one hand, and potential supply disruptions from sanctions on Russia's Lukoil, on the other. Suvro Sarkar, head of the energy team at DBS Bank, pointed out: "Oil prices should have considerable support around $60/barrel, especially considering that Russian exports may experience short-term disruptions once stricter sanctions are implemented."

However, the pressure on fundamentals still cannot be ignored: U.S. Energy Information Administration data showed that crude oil inventories unexpectedly increased by 6.4 million barrels last week, far exceeding the expected 1.96 million barrels., both gasoline and distillate inventories fell less than expected. OPEC predicts that global oil supply will slightly exceed demand in 2026. The International Energy Agency raised its global oil supply growth forecast for this year and next in its latest monthly report. Although geopolitical factors provide some support, the worsening trend of supply and demand fundamentals still dominates market sentiment. Investors will continue to focus on the actual impact of upcoming Russian oil sanctions and whether OPEC+ will make output policy adjustments in response. Oil prices are currently in a technical consolidation stage, waiting for clearer directional guidance.

Foreign Market

As the U.S. government ended its historic shutdown, the U.S. dollar came under pressure and fell on Thursday. The U.S. dollar index fell 0.35% to 99.14, and the euro rose 0.4% to $1.1638 against the U.S. dollar, hitting a new high since October 29. Traders are assessing the long-term impact of the shutdown on the dollar's credibility while awaiting the release of a backlog of economic data.

Market expectations for the Federal Reserve to cut interest rates in December have dropped below 50%, but this shift has not boosted the dollar. Juan Perez, head of trading at MonexUSA, pointed out: "Although the shutdown is over, how long will it take for us to return to normal? How long will it take for us to see data? This is still unknown." White House economic adviser Hassett confirmed that the October employment report will be released, but the report will not include unemployment data.

There are clear differences within the Federal Reserve on the policy path: San Francisco Fed President Daley is open to December decision-making; Minneapolis Fed President Kashkari sees "mixed" economic signals; Cleveland Fed President Hammaker hinted against recent interest rate cuts, and St. Louis Fed President Musallem believes that there is limited room for further easing.

European officials are discussing establishing a U.S. dollar fund pool to replace the Federal Reserve to reduce dependence on the United States. The yen continues to weaken, falling to its lowest level against the euro since 1999. Despite the "verbal warning" from Japan's Finance Minister, traders expect the Bank of Japan to raise interest rates in December with only a 24% chance. Sterling unexpectedly rose against a backdrop of economic stagnation, while the Australian dollar gave up gains after boosting jobs data.

The short-term trend of the US dollar will depend on the quality of upcoming economic data and the clarity of the Federal Reserve's policy path. The statistical gaps caused by the government shutdown may continue to affect the market's judgment on the health of the U.S. economy and bring uncertainty to exchange rate fluctuations.

International News

The six-week U.S. government shutdown has ended, with permanent economic losses exceeding tens of billions of dollars

The six-week U.S. government shutdown has officially ended on Wednesday evening local time. Although the impasse has been temporarily resolved, its drag on the U.S. economy, which is already facing multiple challenges, will continue, and the full impact may take several months to be fully felt. According to estimates by the U.S. Congressional Budget Office (CBO), the shutdown is expected to reduce economic growth by about 1.5 percentage points in the fourth quarter of this year, which is equivalent to cutting the growth rate in half. Although economic growth may rebound by 2.2 percentage points in the first quarter of next year after the government restarts, it will stillApproximately $11 billion in economic activity has been permanently lost. For xmxyly.comparison, the longest government shutdown in history that lasted for 35 days from 2018 to 2019 (only affecting some institutions) had an impact on GDP of only 0.02%, which is much lower than the impact of this shutdown.

The EU is considering consolidating U.S. dollar reserves from non-U.S. countries in an effort to reduce its reliance on the Federal Reserve

Reports indicate that European financial stability officials are discussing establishing an alternative to the Federal Reserve’s liquidity support mechanism by consolidating U.S. dollar reserves held by central banks other than the United States. The move is aimed at reducing reliance on the United States during the Trump administration. According to reports, relevant consultations are still at the working group level, have not yet reached the decision-making level of the European Central Bank, and involve many central banks inside and outside the euro zone. White House spokesman Kush Desai said Trump "has repeatedly reiterated his xmxyly.commitment to maintaining the strength and influence of the U.S. dollar."

U.S. Agriculture Secretary: Most SNAP enrollees will receive November benefits by Monday at the latest

U.S. Agriculture Secretary Rollins said that after the government reopened, her department began to issue the full Supplemental Nutrition Assistance Program (SNAP) benefits for November last night. "Work is moving forward. Good news is xmxyly.coming for those who really depend on it," she said. Rollins added that enrollees can expect to receive benefits by the end of the week, and "most people will receive them as late as Monday." Rollins said last month that the USDA was unable to issue food stamps in November, leaving nearly 42 million Americans in dire straits. The decision set off lawsuits that led to a federal court requiring the agency to make partial payments and then to demand full funding before the Supreme Court suspended the ruling to provide full benefits.

Most Canadians believe that the U.S.-Canada trade agreement will be difficult to achieve within half a year

Most Canadians believe that it is unlikely to reach a trade agreement with the United States in the next six months. Previously, U.S. President Trump interrupted negotiations due to an anti-tariff advertising campaign launched by Ontario. According to a poll conducted by Nanos Research Group, about 67% of Canadians said it was "unlikely" to reach an agreement to reduce U.S. tariffs in the next six months, while 28% thought it was "likely" and 3% were unsure. Canadian Prime Minister Carney previously said that negotiations were originally moving towards reaching agreements in steel, aluminum and energy. Surveys suggest Canadians may understand why Carney has so far been unable to reach an agreement with the mercurial U.S. president. But as the trade stalemate continues and economic pressure intensifies, their patience may be wearing thin.

Interest rate derivatives contracts show that the probability of the Federal Reserve cutting interest rates in December is less than 50%

U.S. short-term interest rate derivatives contracts show that the market expects that the probability of the Federal Reserve cutting interest rates by 25 basis points in December is less than 50%. Fed funds futures and overnight index swap (OIS) contracts tied to the Fed's December 9-10 meeting indicate a slightly less than 50% chance of a 25 basis point rate cut.

The International Energy Agency (IEA) has raised its forecast for global oil supply surplus for the sixth consecutive month

As OPEC+ continues to restore supply and demand growth remains weak, the International Energy Agency (IEA) has raised its forecast for global oil surplus next year for the sixth consecutive month. The report said that global oil supply will exceed demand by about 4 million barrels per day in 2026, a slight increase from last month's forecast. The IEA noted that global oil "supply and demand balances are increasingly imbalanced" and it has raised its surplus forecast every month since June. Toril Bosoni, head of the IEA's oil markets and industry department, said in an interview with Bloomberg TV: "We see that global crude oil supply continues to increase, while demand growth is relatively moderate."

The British government abandons plans to increase income taxes

According to the Financial Times, British Prime Minister Starmer and Finance Minister Reeves have decided to abandon the previously proposed budget plan to increase income tax rates. This move marks an important adjustment in the direction of tax policy by the British government.

The United States has reached trade agreements with many countries to reduce tariffs on Latin American coffee and other products

Senior U.S. officials said on Thursday that it has signed trade agreements with a number of Latin American countries and will implement tariff reductions and exemptions on some imported goods such as coffee and fruits. In the current economic environment, coffee has become a symbol of the "affordability crisis" when people judge the Trump administration's economic policies, just like the role eggs have represented during the Biden administration. Data show that coffee price growth in September ranked first among all categories tracked by the Consumer Price Index (CPI). Finance Minister Bessant promised earlier this week that pressure on coffee prices would soon be eased. The agreement covers Argentina, Ecuador, El Salvador and Guatemala. The United States will reduce or reduce tariffs on some non-locally produced goods, such as coffee and bananas from Ecuador.

Domestic News

China’s first thousand-ton ultra-large single gold deposit has been discovered

The Ministry of Natural Resources announced today (November 14) a major prospecting result, led by Liaoning The Geological and Mining Group successfully discovered the Dadonggou Gold Mine, China's first kiloton-level, low-grade ultra-large gold deposit in Liaodong, with a total proven gold content of 1,444.49 tons, making it the largest single gold deposit discovered since the founding of the People's Republic of China. The Ministry of Natural Resources stated that a total of 2.586 billion tons of gold ore, 1,444.49 tons of gold metal, and an average grade of 0.56 g/ton were discovered in the Dadongou Gold Mine above an elevation of minus 720 meters. According to reports, the Dadongou Gold Mine is another ultra-large low-grade open-pit gold mine discovered in my country. It has passed the economic demonstration of development and utilization and is expected to have good benefits. During the exploration process, nearly a thousand staff worked together to shorten the exploration work time to 15 months, setting a precedent for "short-cycle, high-quality" gold mine exploration in China.

In the 10 months before the latest trading data of the futures market was released, the trading volume increased by nearly 22% year-on-year

Recently, the China Futures Association released the latest statistics on the trading situation of the national futures market.according to. Data show that on a unilateral basis, the national futures market trading volume in October was 603 million lots and the turnover was 61.22 trillion yuan, a year-on-year decrease of 13.26% and an increase of 4.54% respectively. From January to October, the cumulative trading volume of the national futures market was 7.347 billion lots, and the cumulative trading volume was 608.84 trillion yuan, a year-on-year increase of 14.86% and 21.82% respectively.

The above content is all about "[XM Group]: Oil prices weigh conflicting signals, Fed officials are cautious about cutting interest rates, and gold prices have fallen from a three-week high". It was carefully xmxyly.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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