Core Viewpoint - The rapid decline in gold and silver prices is attributed to multiple factors including policy expectations, technical breakdowns, a stronger dollar, and reduced geopolitical risks. Citigroup has turned bearish on gold prices, predicting a drop to $4,000 within the next three months. However, medium to long-term support for gold remains due to global recession risks and central bank gold purchases, which are expected to exceed 1,000 tons by 2025. Investors should closely monitor the October CPI data and the Federal Reserve's meeting statements to gauge market direction changes [3]. Price Movements - As of October 24, gold prices fell below $4,060 per ounce, with a daily decline of over 1.85%. Silver prices also dropped, touching $47 per ounce, down more than 2% [1]. - Current prices include: - London Gold: $4,050.228, down $76.262 (-1.85%) - London Silver: $47.850, down $0.996 (-2.04%) - COMEX Gold: $4,071.3, down $74.3 (-1.79%) - COMEX Silver: $47.615, down $1.089 (-2.24%) [2]. Market Reactions - U.S. gold stocks fell in pre-market trading, with notable declines including a drop of over 4% for Coeur Mining and declines exceeding 2% for both Kinross Gold and Harmony Gold [2].

Group 1 - The US dollar has shown a strong start in the foreign exchange market, supported by risk aversion due to the government shutdown and heightened attention on the upcoming September CPI data [1][2] - The government shutdown has led to a "data vacuum," increasing the appeal of the US dollar as a traditional global safe-haven asset, resulting in sustained buying support [2][6] - The September CPI data, set to be released soon, is crucial as it is one of the first significant data points post-shutdown and provides insight into the true inflation situation [4] Group 2 - Economists predict a year-on-year increase of 3.1% in the September CPI, which would be the highest level since May 2024, potentially impacting the Federal Reserve's policy path in 2026 [4][6] - There is an asymmetry in the market's response to the CPI data; if the data meets or falls below expectations, the dollar may only see minor fluctuations, but a higher-than-expected figure could drive the dollar significantly higher [6][8] - Recent Canadian inflation data exceeding expectations has raised caution among traders, suggesting that US inflation may also remain resilient [6] Group 3 - Despite a cumulative decline of about 7% in the Bloomberg Dollar Spot Index for 2025, most of the losses occurred in the first half of the year, with the dollar showing resilience in the latter half [7] - The options market indicates optimism, with traders favoring the purchase of bullish dollar options, reflecting a belief that the dollar will continue to strengthen in the next three months [7] - There is a growing perspective that the market may be underestimating the dollar's rebound potential, as the relative strength of the US economy could limit the Fed's rate-cutting capacity [8]

Group 1 - The US dollar index fell below 99.50, showing a slight decline after reaching a two-month high of 99.55, indicating a pause in its recent recovery trend [1][2] - The US government shutdown has entered its ninth day with no significant progress, as the Republican proposal to fund the government failed to secure enough votes in the Senate [1] - Trump's administration plans to use the government shutdown to permanently cut what he refers to as "Democratic projects," signaling a shift in focus towards reducing federal spending [1] Group 2 - The dollar index has shown strong performance this week, up 1.7% and on track for its best weekly performance in a year, despite the ongoing government shutdown [2] - The dollar index is expected to maintain a range between 99 and 99.5 ahead of employment data, with potential volatility depending on signals from Powell at the upcoming community bank meeting [2] - If Powell emphasizes "sticky inflation," it could push the index to break through the resistance level of 99.5 [2]

Core Insights - Gold prices have reached record highs, with futures touching $3,994.50 an ounce, indicating a strong upward trend towards the psychological level of $4,000 [1][5] - The rally in gold is attributed to five key factors: sticky inflation, geopolitical tensions, a weaker dollar, central bank demand, and investors hedging against market volatility [2] - The current market sentiment reflects a shift in confidence towards gold as a reliable asset, with commentary suggesting that it is reasserting its role as a fundamental store of value [3] Market Dynamics - Gold futures for December settled at $3,976.30 an ounce, marking the 42nd record-high finish of the year, with a notable increase of 1.7% on the day [5] - The advance in gold prices began prior to the current political climate but has been further propelled by recent events in Washington, including federal shutdown discussions [4] - The significant rise from $3,000 to nearly $4,000 demonstrates the rapid momentum that can build under favorable conditions in the market [2]

Core Viewpoint - Global central banks are entering a new phase of policy adjustment characterized by unprecedented divergence, with Japan initiating asset reduction, the Federal Reserve starting preventive rate cuts, while the European and UK central banks remain cautious amid persistent inflation pressures [1][18]. Central Bank Policy Summary Japan - The Bank of Japan (BOJ) maintained its policy rate at 0.50% while initiating a reduction plan for its large ETF and J-REITs holdings, starting with an annual reduction of approximately 620 billion yen (about 4.2 billion USD) [2][6]. - The decision reflects a significant step towards normalizing the ultra-loose monetary policy that has been in place for over a decade, despite the slow pace of asset reduction indicating a cautious approach [6][7]. United States - The Federal Reserve lowered the federal funds rate target range by 25 basis points to 4.00%-4.25%, citing economic slowdown and labor market cooling as key factors [3][4]. - Fed Chair Powell emphasized that the decision was a risk management measure, balancing the dual risks of a weakening labor market and persistent high inflation [3][4]. Europe - The European Central Bank (ECB) kept the deposit facility rate unchanged at 2%, indicating that current inflation is close to the medium-term target of 2% and that the eurozone economy shows resilience [9][10]. - There are internal divisions within the ECB regarding future actions, with some members advocating for rate cuts due to long-term deflation risks, while others believe current rates are sufficient to address multiple challenges [10][11]. United Kingdom - The Bank of England (BoE) maintained its rate at 4%, highlighting significant medium-term inflation pressures despite a slight GDP growth [11][12]. - The BoE plans to slow its quantitative tightening from £100 billion to £70 billion annually, reflecting concerns over long-term bond market pressures [12][13]. Canada and Australia - The Bank of Canada cut its benchmark overnight rate by 25 basis points to 2.50%, responding to economic shrinkage and employment declines due to U.S. tariffs [14][15]. - The Reserve Bank of Australia (RBA) has also reduced its cash rate to 3.60%, indicating a cautious shift towards easing while monitoring economic data closely [16][17]. Global Monetary Policy Landscape - The global monetary policy environment is marked by high uncertainty, with central banks facing complex challenges such as intricate inflation structures, external risks from trade policies, and political instability [18]. - The divergence in policy approaches among major central banks reflects a transition from a highly coordinated response during the pandemic to a more nuanced, differentiated strategy in response to evolving economic conditions [18].

Core Viewpoint - Neel Kashkari, President of the Minneapolis Federal Reserve, supports the Fed's recent interest rate cut and suggests two additional cuts of 25 basis points each within the year, given the current economic conditions [1][2]. Economic Conditions - Recent economic data indicates signs of weakness, with monthly job growth significantly slowing and the unemployment rate rising slightly to 4.3% [1]. - Kashkari emphasizes that the deterioration of the labor market is a primary concern for current policy decisions [1]. Inflation Outlook - Despite concerns about potential tariff re-implementation by the Trump administration, Kashkari believes the impact on overall inflation will be limited, estimating that inflation is "unlikely to exceed 3%" [1]. - He notes that the current neutral interest rate may have risen to 3.1%, suggesting that the Fed's policy stance is not as tight as previously thought [2]. Policy Flexibility - Kashkari indicates that the Fed has the flexibility to implement faster rate cuts if the labor market worsens beyond expectations [3]. - There are internal disagreements within the Fed regarding future rate paths, with some policymakers suggesting that only one more cut may be necessary this year, or potentially no further cuts at all [2].

Core Viewpoint - The article suggests that Powell's decision to cut interest rates, despite the absence of clear recession signals, represents a high-risk policy gamble aimed at demonstrating the Federal Reserve's independence and fulfilling its dual mandate [3][4]. Economic Context - Powell faces unprecedented political opposition and economic uncertainty as his term nears its end, making current policy decisions more complex and risky than ever [3][4]. - The significant slowdown in the job market is a key factor prompting the Fed's rate cut, with recent data showing a drastic reduction in average job growth from 150,000 to 29,000 [4][5]. Structural vs. Cyclical Concerns - There are concerns that the Fed may misinterpret structural changes in the economy as temporary cyclical slowdowns, influenced by policies from the Trump administration that could permanently alter production capabilities [5]. - Experts warn against the risks of excessive rate cuts, as persistent inflation concerns among consumers and businesses may lead to sustained higher inflation [5]. Political Pressures and Internal Consensus - Maintaining internal consensus within the Fed amidst political pressures is a significant challenge for Powell, who has managed to secure support for the rate cut despite differing views on the economic outlook [7]. - The division among Fed officials regarding future rate cuts indicates ongoing debates and potential challenges for Powell's leadership [7]. Market Reactions and Future Implications - The thriving stock market raises questions about consumer spending stability, as businesses invest heavily in AI infrastructure, but income growth may eventually lead to reduced spending [8]. - Powell's policy experiment could determine the future independence and effectiveness of the Fed, impacting not only the U.S. economy but also global monetary policy [8]. Historical Outcomes - The article outlines three potential historical outcomes of Powell's policy gamble: a successful "soft landing" akin to the mid-1990s, the risk of igniting inflation similar to the late 1960s, or the failure of rate cuts to prevent recession as seen in 1990, 2001, and 2007 [10].

Group 1 - The Federal Reserve lowered interest rates by 25 basis points, aligning with market expectations, with 11 out of 12 voting members supporting this decision [1] - Fed Chairman Powell emphasized that the rate cut was a "risk management" move, balancing "sticky inflation" and "employment downside risks," asserting that political pressure does not influence decisions [1] - The updated dot plot indicates that most officials expect an additional 50 basis points cut in 2025 and a further 25 basis points in 2026, suggesting a long-term easing direction that supports precious metals [1] Group 2 - Following the rate cut, gold and silver prices initially surged but later retreated due to Powell's cautious remarks, with gold dropping to $3689.4 per ounce and silver to $41.79 per ounce [2] - The short-term pullback is attributed to the market having partially priced in the rate cut expectations and profit-taking by bulls, but the long-term bullish outlook for precious metals remains intact [2] - Key technical support levels to watch are $3550 per ounce for gold and $40 per ounce for silver; as long as prices remain above these levels, the short-term upward trend is expected to continue [2]

Core Insights - The report highlights a positive outlook for the coal industry, anticipating a rebound in coal prices during the peak season, which is expected to lead to performance recovery for coking coal and elastic stocks [3][12] - The Federal Reserve's recent decision to lower interest rates by 25 basis points is seen as a precursor to further rate cuts, with projections indicating three potential cuts in 2025 [11][13] Coal Industry Analysis - Supply Side: Under the "anti-involution" policy, domestic coal production growth is expected to slow down in the second half of the year. In July and August, national raw coal production was 380 million tons and 390 million tons, respectively, showing year-on-year declines of 3.8% and 3.2%. Cumulative production from January to August reached 3.165 billion tons, up 2.8% year-on-year [3][12] - Demand Side: The profitability of the coking steel industry is expected to maintain high iron and steel production levels, which could support a rebound in coking coal prices. Additionally, with the winter heating season approaching, marginal improvements in thermal coal demand are anticipated, with price expectations set between 700-750 RMB per ton for the second half of the year [3][12] - Investment Recommendations: The report recommends undervalued elastic stocks such as Shanxi Coking Coal, Huaibei Mining, Lu'an Environmental Energy, and Yanzhou Coal Mining. It also suggests stable high-dividend stocks like China Shenhua, Shaanxi Coal, and China Coal Energy, while advising to pay attention to elastic stocks in thermal coal such as Jinkong Coal Industry, Huayang Co., Tebian Electric Apparatus, and Shanxi Coal International [3][12] Federal Reserve Insights - The Federal Reserve's recent meeting resulted in a 25 basis point rate cut, with an increased forecast for economic growth and inflation for 2026. The median dot plot indicates an increased likelihood of three rate cuts in 2025, while the space for cuts in 2026 has been reduced to one [11][13] - The Fed's focus on employment risks and inflation pressures suggests a cautious approach to future monetary policy, with the potential for further adjustments based on economic conditions [11][14]

Group 1 - The core viewpoint is that investors are betting on a potential interest rate cut by the Federal Reserve, which has led to fluctuations in gold and silver prices [1][2][3] - Spot gold first broke through $3700 per ounce but later experienced a short-term drop, ultimately closing up 0.29% at $3689.46 per ounce [1][2] - Spot silver closed down 0.38% at $42.50 per ounce, reflecting the overall market sentiment influenced by monetary policy expectations [1][2] Group 2 - The U.S. dollar index fell, while economic data showed that U.S. retail sales increased by 0.6% in August, exceeding expectations for three consecutive months, indicating strong consumer resilience [3] - The ongoing trade policy uncertainties, including agreements between the EU and Indonesia, proposed tariffs on auto parts by the U.S., and intensified trade negotiations between the U.S. and India, are supporting safe-haven demand for precious metals [3] - Market volatility is expected to increase around the Federal Reserve's policy statement, especially if the rate cut is accompanied by hawkish guidance or cautious signals regarding future policy [3] Group 3 - Overall, economic data has not changed the expectations for interest rate cuts, and ongoing trade tensions and policy uncertainties suggest that gold and silver prices will likely maintain a strong oscillating trend in the short to medium term [4] - Technically, gold is expected to find support at $3600, with potential to challenge the $3800 level, while silver could target $45 if it stabilizes around the $43 mark [4]