Group 1 - The Federal Reserve is facing a dilemma due to the lack of macroeconomic data, which undermines its confidence in decision-making [1][4] - Fitch Ratings predicts at least one interest rate cut by the end of the year, with a significant inflation pressure expected to push core inflation to 3.5% [2][6] - The ongoing government shutdown is disrupting key economic indicators, complicating the Federal Reserve's policy decisions [3][4] Group 2 - The impact of tariffs on inflation is expected to accelerate, with predictions of core inflation rising to 3.5% by year-end [6][7] - The U.S. economy is projected to grow between 1.5% and 2% this year, a significant slowdown from previous growth rates [10] - Emerging markets have shown resilience, with less-than-expected impacts from tariffs and progress in controlling inflation [11] Group 3 - The bond market is likely to face upward pressure on yields due to ongoing fiscal deficits, with 10-year Treasury yields expected to be around 4.4% to 4.5% in the coming years [9] - The global economic outlook remains challenging, with a projected growth rate of approximately 2.4% for the year, below historical trends [10][12] - There is a concern that the current positive sentiment may be overly optimistic, with potential negative trade data expected in the second half of the year [12]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - Since 2025, the cumulative increases of the London Gold and Shanghai Gold indices were 57.25% and 51.89% respectively, but last week they decreased by 2.94% and 6.17% [4][21]. - The long - term bullish logic for gold remains intact, including a weakening US dollar and central bank gold purchases due to global political and economic instability [6]. - Short - term advice is to take profits on long gold positions, and for options, take profits on purchased call options [1][6]. Summary by Directory Fundamental Viewpoints - **Price Trends**: Since 2025, the London Gold and Shanghai Gold indices had significant increases, but declined last week [4][21]. - **Inflation**: CPI reached a peak of 9.1% in June 2022 and then declined. Since February 2024, CPI rebounded, and core inflation showed signs of slowing decline or rising. In September 2025, CPI slightly increased, while core CPI slightly decreased [4][24]. - **Interest Rates**: US medium - term Treasury yields declined from mid - October 2023 to January 2025, rebounded since February 2024, and fell below the 2024 low since September [4][28]. - **Supply and Demand**: When the gold market is in a tight supply - demand balance, it is conducive to price increases. In 2024, the global gold supply - demand situation became less loose, mainly due to increased investment demand. The domestic gold market remained in a tight balance in 2024 and 2025, with significant increases in investment demand and central bank gold purchases [4][41]. - **US Economy**: In August 2025, US non - farm employment data was much weaker than expected, and the unemployment rate remained at 4.3%. The average hourly wage of non - farm employees increased by 0.4% [4][37]. Strategy Viewpoints and Outlook - **Outlook**: Gold prices opened high and closed low last Friday, with a slight decline. After a significant increase due to risk - aversion sentiment, gold prices dropped on the evening of October 21st, mainly due to a decline in risk - aversion sentiment and profit - taking from overbought technical conditions. However, the long - term upward trend of gold remains [6]. - **Strategy**: For long gold positions, consider reducing positions in the medium term and setting stop - profit levels. For call options, take profits [6]. Gold Supply and Demand - **Global and Domestic Supply - Demand Tables**: When the gold market is in a tight supply - demand balance, it is beneficial for price increases. In 2024, the global gold supply - demand situation became less loose, and the domestic market remained in a tight balance [38][41]. - **Central Bank Gold Purchases**: In the second quarter of 2025, global central bank gold purchases continued to decline. The Chinese central bank has been purchasing gold since 2022, with different purchase volumes in each quarter of 2025 [45]. - **ETF Demand**: In 2023 and 2024, gold holdings in ETFs decreased. As of October 24, 2025, gold holdings in ETFs increased by 265.07 tons, but last week there was a reduction of 3.91 tons [46]. Other Market Indicators - **Exchange Rates and Dollar Index**: The report presents trends in the RMB exchange rate, the US dollar index, and exchange rates between the US dollar and other major currencies [53]. - **Gold Price Differences**: The price difference between domestic and international gold markets fluctuated significantly [69][70]. - **Precious Metal and Oil Ratios**: The report shows trends in the gold - silver ratio and the gold - oil ratio [72].

Core Insights - The core consumer price index (CPI) in the U.S. rose by 0.2% in September, marking the slowest increase in three months, which supports the Federal Reserve's path towards interest rate cuts [2][3] - The report indicates that housing costs have recorded the smallest increase since early 2021, contributing to the lower-than-expected inflation readings [2][3] - The market has fully priced in two 25 basis point rate cuts by the end of the year, with expectations for further cuts in December [5][6] Economic Data Summary - The month-over-month CPI increased by 0.3%, while the core CPI rose by 0.2%, both lower than estimates of 0.4% and 0.3% respectively [3] - Year-over-year CPI and core CPI both stood at 3.0%, slightly below the expected 3.1% [3] - The report's release was delayed due to the federal government shutdown, which has also impacted data collection for future reports [3][7] Market Reactions - Following the data release, U.S. stock markets surged, while bond yields and the dollar declined, indicating increased investor confidence in potential rate cuts [5] - Analysts believe the CPI report will keep the Federal Reserve on track for rate cuts, as it aligns with the central bank's focus on softening employment data [8] Inflation Concerns - Despite concerns about tariffs impacting inflation, the actual effects have been less severe than previously feared, with some companies warning of potential price increases due to tariffs [6] - The Federal Reserve's latest Beige Book indicated that businesses across the country reported rising input costs due to tariffs, but the impact on consumers has been uneven [6]

Core Insights - The U.S. government shutdown has led to a suspension of most official economic data releases, with the only significant hard data expected from the Federal Reserve being the September CPI, which will be released on October 24 [1] - The CPI data is anticipated to be a key anchor for market and policy expectations, with a monthly increase rate close to 0.2% potentially reinforcing "soft landing" expectations and boosting Bitcoin performance [1] - Gold has experienced a significant pullback due to a stronger dollar and profit-taking from recent highs, while Bitcoin briefly rose to approximately $114,000 before retreating to the $108,000 range, indicating high market volatility ahead of the CPI release [1]

Core Viewpoint - The precious metals market experienced a significant downturn after a period of record highs, with gold and silver prices plummeting to their largest daily declines in years, raising concerns among investors about future price movements [1][4][7]. Price Movements - Gold reached a historical intraday high before falling approximately 6.3% to around $4,082, marking its largest daily drop since April 2013, with a closing price of $4,130.41 per ounce [1]. - Silver also saw a dramatic decline, dropping nearly 8.7% to below $47.90, the largest intraday drop since February 2021, with a closing price of $48.7050 per ounce [4]. Market Influences - Multiple factors contributed to the pressure on precious metal prices, including expectations of easing trade tensions, a strengthening dollar, and overbought technical indicators, which diminished the safe-haven demand for these metals [7][10]. - The ongoing U.S. government shutdown has led to a lack of critical positioning data, increasing uncertainty in the market and potentially allowing speculative long positions to accumulate excessively [10][12]. Technical Analysis - The relative strength index for gold indicated that prices had entered an overbought territory, prompting concerns about potential corrections and profit-taking among traders [8][11]. - Analysts noted that the absence of significant media catalysts on the day of the price drop suggested that the market was due for a correction due to extreme overbought conditions [11][12]. Investor Sentiment - Despite the sharp declines, some analysts believe that the fundamental factors supporting precious metals have not changed, and potential buying interest may limit the extent of any corrections [7][13]. - The recent lack of significant physical demand from India and the absence of key buyers in the Shanghai Gold Exchange were highlighted as notable factors contributing to the market's weakness [12][16]. Future Outlook - Analysts from various firms expressed differing views on the future of gold and silver prices, with some maintaining a bullish outlook while acknowledging the potential for a consolidation phase [10][13]. - The global largest gold ETF, GLD, saw unprecedented trading volumes, indicating heightened interest and activity in the market despite the recent downturn [14].

Key Insights - The article discusses the recent U.S. government shutdown, its unique aspects, and potential impacts on the U.S. economy and markets [8] - It highlights the historical context of government shutdowns, detailing previous instances and their durations, with the latest shutdown starting on October 1, 2025, and ongoing [8] - The article also provides insights into economic indicators, including profit growth in August and the September PMI, indicating a shift from traditional to new economic drivers [10][11] Group 1: Hot Topics - The U.S. government experienced a shutdown due to the failure to pass temporary funding, marking the first such event in nearly seven years [8] - The shutdown is characterized by a focus on extending ACA premium tax credits and disputes over healthcare funding, with both parties at an impasse [8] - Historical data on past government shutdowns is presented, showing various durations and political contexts, emphasizing the recurring nature of budgetary conflicts [8] Group 2: Economic Data Insights - August profit growth is attributed to a low base effect and other financial factors, despite ongoing cost pressures [10] - The September PMI data indicates a notable recovery in new economic drivers, suggesting a need to monitor the effectiveness of growth stabilization policies in key industries [11] - Consumer behavior during the National Day holiday is analyzed, revealing trends such as a decrease in traditional tourist site popularity and an increase in cross-border travel [13]

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion revolves around the impact of the U.S. government shutdown on various sectors, including employment, economic indicators, and financial markets. Core Points and Arguments - **Government Shutdown Causes**: The shutdown is primarily due to the failure of bipartisan agreement on temporary spending bills or the budget for fiscal year 2026, leading to a halt in non-essential government operations [3][4][5] - **Impact on Employment**: Federal employees will face temporary furloughs, which may distort employment data. Temporary workers contracted by private companies may also face layoffs, increasing unemployment rates [8][9] - **Effect on Economic Indicators**: The shutdown could exert short-term pressure on GDP and PMI indicators. Historical data shows that economic losses from shutdowns are often recoverable, but not all losses are fully compensated [14] - **Federal Employee Wages**: Wages for federal employees will be paused during the shutdown but will be compensated later. This delay may negatively impact consumer spending and overall economic activity [6][7] - **Debt Obligations**: U.S. Treasury bonds will not default due to the shutdown, as interest payments are classified as necessary expenditures. The risk of a debt crisis remains low [9][10] - **Data Release Delays**: The shutdown may delay the release of key economic data, such as manufacturing PMI and non-farm payroll figures, particularly if the departments responsible are affected by the shutdown [10][11][12] - **Differences Between Shutdown and Debt Ceiling**: The government shutdown is distinct from debt ceiling issues, which involve the inability to issue new debt once the limit is reached. The former does not typically lead to long-term market disruptions [13] - **Market Reactions**: Risk assets tend to perform poorly before a shutdown but may rebound afterward. The current market sentiment is cautiously optimistic regarding the resolution of the shutdown [14][16][19] Other Important but Possibly Overlooked Content - **Political Dynamics**: The current political landscape is marked by significant divisions, particularly regarding healthcare spending, which complicates negotiations [14][15] - **Trump's Influence**: Former President Trump's personal agenda may uniquely affect the situation, potentially leading to unprecedented market reactions [15][18] - **Market Outlook**: If the shutdown persists, particularly influenced by Trump's actions, it could lead to a reevaluation of the dollar and Treasury bonds, with potential benefits for gold [17][18]

Group 1: Government Shutdown Reasons and Duration - The primary reason for the government shutdown is the dispute over extending healthcare subsidies, particularly the tax credits under the Affordable Care Act, with Democrats advocating for extension and Republicans opposing it[2]. - The market predicts the shutdown could last over 15 days, with a 67% probability for this duration as of October 6[3]. - Historically, the U.S. government has experienced 11 shutdowns since 1980, averaging 8.6 days in duration, with October being a peak month for such events[5][19]. Group 2: Economic Impact - A government shutdown lasting one month is estimated to impact GDP by only 0.02%, based on past data from a 34-day shutdown in 2019, which resulted in a permanent GDP loss of approximately $30 billion[6][26]. - Employment effects are minimal, with temporary unemployment potentially rising by 0.1 percentage points during a shutdown, but typically returning to normal levels shortly after[7][31]. Group 3: Market Reactions - During past shutdowns, the S&P 500 index has shown an average increase of 2.91% with a 75% success rate of positive returns[8][34]. - U.S. Treasury yields tend to decline during shutdowns, with 10-year bonds averaging a drop of 2.25 basis points and 2-year bonds dropping by 8 basis points[8][34]. - The U.S. dollar generally weakens slightly during shutdowns, averaging a decline of 0.30%[8][34].

Group 1: Government Shutdown Reasons and Duration - The primary reason for the government shutdown is the dispute over extending healthcare subsidies, with Democrats advocating for the extension of the Affordable Care Act's tax credits and Republicans opposing this linkage[1][12]. - Market predictions indicate a shutdown duration of over 15 days has a 67% probability, with the House passing a temporary funding bill but the Senate failing to reach the required 60 votes[2][13]. Group 2: Impact on Government Operations and Economic Indicators - During the shutdown, non-essential government activities cease, affecting the release of key statistical data such as retail sales and employment figures, while essential services like military and social security continue[3][16]. - Historically, the U.S. government has experienced 11 shutdowns since 1980, averaging 8.6 days, with the longest lasting 34 days[4][20]. Group 3: Economic Impact of Shutdown - A one-month shutdown is estimated to impact GDP by only 0.02%, with the 2019 shutdown resulting in a permanent GDP loss of approximately $30 billion, also around 0.02% of that year's GDP[5][28]. - The unemployment rate may see a temporary increase of 0.1 percentage points during a shutdown, but typically returns to normal levels shortly after[6][34]. Group 4: Market Reactions to Shutdown - Historical data shows that the S&P 500 index has an average increase of 2.91% during shutdowns, with a 75% success rate of positive returns[7][38]. - U.S. Treasury yields tend to decline during shutdowns, with 10-year bonds averaging a drop of 2.25 basis points and 2-year bonds dropping 8 basis points[7][38].

Core Points - The U.S. government shutdown is expected to last at least until next week due to a failure to pass temporary funding bills in Congress [1] - The Senate rejected both Republican and Democratic proposals for short-term funding, marking the third failure to extend funding [1] - The House of Representatives is also in a state of suspension, with plans to reconvene only when the Senate allows the government to restart [1] Group 1 - The government shutdown has entered its sixth day and will extend into the second week [1] - The Senate's Republican-backed short-term funding bill was defeated by a vote of 54 to 44, with three Democrats voting in favor and one Republican opposing [1] - The House Speaker announced that the House will not reconvene as planned on October 7, indicating a delay in operations until the Senate reaches an agreement [1] Group 2 - The impact of the government shutdown is expanding, with the White House expected to announce layoffs and freeze billions in infrastructure project funding [1] - Since the funding expired on October 2, hundreds of thousands of federal employees have been forced into unpaid leave, and non-essential services have been halted [2] - There are currently no signs of a viable solution to restart the government, as both Congress leadership and the White House remain in a standoff [2]