Oil prices hit a 5-month low, the U.S. Senate failed to pass the 11th government shutdown vote, and gold prices rebounded and approached 4,400 again

Basic news

On Tuesday (October 21, Beijing time), spot gold was trading around US$4,362 per ounce. Gold prices rebounded on Monday and once again hit a record high of US$4,381.29 per ounce. Aided by expectations of further U.S. interest rate cuts and continued demand for safe havens, the U.S. Senate voted for the 11th time. The appropriation bill has still not been passed and the government "shutdown" continues. At the same time, investors await upcoming trade negotiations and U.S. inflation data released this week; U.S. crude oil traded around $56.92 per barrel. Oil prices closed at the lowest level since early May on Monday as investors weighed the possibility of global oversupply, plus trade tensions heightened concerns about an economic slowdown and weak energy demand.

Focus on Canada’s CPI data during the day

Stock Markets

U.S. stocks jumped on Monday, with financial and technology stocks providing much of the momentum, as upbeat quarterly earnings results revived risk appetite and investors' concerns about the credit quality of regional banks eased.

The broad rally saw all three major U.S. stock indexes close sharply higher. The small-cap Russell 2000 index outperformed large-cap stocks, rising 2.0%.

Paul Nolte, senior wealth advisor and market strategist at Murphy & Sylvest, said that this is a good, stable, and xmaccount.comprehensive trend. There are not many negative factors in the market. Financial stocks have seen relief gains, and investors believe that last week's downward reaction may have been overreacted. As far as the market is concerned, things are looking great again.

Apple stock hits all-time high, while Meta, Netflix and Alphabet rose between 1.3% and 3.3%. The Philadelphia Semiconductor Index broke through its all-time high and closed up 1.6%.

The third quarter earnings season has reached its climax. Earnings worth watching this week include Tesla, Netflix, IBM, Intel, General Motors and Ford, as well as a host of other high-profile industrial xmaccount.companies, including aerospace, transportation and diversified manufacturers.

Upcoming earnings reports from U.S. regional banks are expected to provide a closer look at the industry, following last week's sharp selloff on concerns about systemic credit stress.

Analysts currently expect S&P 500 third-quarter earnings to rise 9.3% year-over-year, an improvement from the 8.8% forecast on October 1.

Matthew Keator, managing partner of KeatorGroup, said: "Many of the uncertainties that businesses were worried about earlier this year, such as tax legislation and tariffs, have temporarily subsided, which has allowed xmaccount.companies to focus on profits and profitability."

White House economic adviser Hassett said that the federal government shutdown is likely to end this week, which has given an additional boost to market sentiment.

As the federal government shutdown enters its 20th day, investors and policymakers are having to navigate their way through the resulting data blackout. But on Friday, the U.S. Labor Department will make an exception and release the Consumer Price Index (CPI) for September, which will give the data-reliant Federal Reserve an understanding of inflation and may also shed light on the extent to which President Trump's tariffs have affected price growth.

The Dow Jones Industrial Average rose 1.12% to 46,706.58 points; the S&P 500 Index rose 1.07% to 6,735.13 points; the Nasdaq Index rose 1.37% to 22,990.54 points.

Of the 11 major S&P 500 sectors, xmaccount.communications services posted the largest gains, while consumer staples and utilities were lower.

In other stock movements, Boeing rose 1.8% after the xmaccount.company received approval from the Federal Aviation Administration to increase monthly production of 737 MAX to 42 aircraft.

WeightWatchers rose 9.3% after the xmaccount.company announced that it would cooperate with Amazon to launch a weight loss drug delivery business.

Gold Market

Gold prices rose more than 2% on Monday, helped by expectations of further U.S. interest rate cuts and continued safe-haven demand, while investors awaited upcoming trade negotiations and U.S. inflation data this week.

Spot gold once again hit a record high of $4,381.29 per ounce. U.S. gold futures for December delivery closed up 3.5% at $4,359.40 an ounce.

Jeffrey Christian, managing partner of CPMGroup, said that political and economic worries pushed gold prices to rebound after last Friday's sharp decline. We expect gold prices to rise further in the xmaccount.coming weeks and monthsIt would not be surprising if it rises to $4,500 an ounce soon.

The U.S. government shutdown has continued into its 20th day, and the Senate failed in its tenth attempt to break the deadlock last week. The government shutdown has also delayed the release of key economic data, leaving investors and policymakers in a data vacuum ahead of next week's Federal Reserve policy meeting.

U.S. consumer price index (CPI) data, delayed due to the government shutdown, is expected to be released on Friday. Meanwhile, traders are betting on a 99% chance of the Fed cutting interest rates next week and predicting another rate cut in December.

Investors are also paying attention to further progress in trade negotiations. Christian said he would not be surprised to see gold prices rise to $5,000 an ounce sometime next year. It will depend on the political issues continuing or even worsening, which is what we are currently facing. Spot silver rose 0.6% to $52.17 an ounce. It hit an intraday record high of $54.47 on Friday, but ended up down 4.4%. In terms of other precious metals, platinum rose 1.9% to US$1,640.90 per ounce; palladium rose 1.5% to US$1,496.59 per ounce.

Oil Market

Oil prices closed at their lowest level since early May on Monday as investors weighed the possibility of a global supply glut and trade tensions fueling concerns about an economic slowdown and weak energy demand.

Brent crude oil futures closed down 0.46% at $61.01 a barrel. U.S. crude oil futures ended down 0.03% at $57.52 a barrel. The two major crude oil benchmarks once fell by more than $1 during the session, and both ended at their lowest levels since early May.

Judging from the futures structure of the global benchmark Brent crude oil, traders' concerns have shifted from insufficient supply to oversupply.

The six-month spreads for both Brent and U.S. crude futures show that contracts for near-term delivery are priced lower than those for further delivery, a so-called "contango structure" that encourages traders to store oil in order to sell it at a higher price when supply tightens in the future. Brent crude oil showed a futures premium structure last Thursday for the first time since its brief appearance in May. The current premium is the highest since December 2023. The premium structure of U.S. crude oil futures appeared last Friday for the first time since January 2024.

John Kilduff, partner at Again Capital, said: "Oversupply concerns are sweeping the market, especially looking forward to 2026. We will see floating storage rising and inland storage tanks filling up. This is a truly bearish narrative that we have not seen in a long time," he added.

One piece of news that has limited the decline in oil prices to a certain extent is that a lobbying group whose board members include Oracle, Amazon and Exxon Mobil are urging the Trump administration to immediately suspend the implementation of "related party rules", saying that the rules have caused billions of dollars in U.S. exports to stall and may prompt other countries to exclude U.S. xmaccount.companies from their supply chains.

A preliminary survey on Monday showed that U.S. crude oil inventories may have increased last week, further pressure on oil prices.

Forex Markets

The U.S. dollar edged higher against the yen on Monday as investors turned their attention to political developments in Japan and the euro zone, while U.S. credit risks continued to raise concerns.

The yen edged lower as hardline conservative Sanae Takaichi was all but certain to win a parliamentary vote and become Japan's first female prime minister.

The expectation that Sanae will take over as the new prime minister has triggered market concerns about potential fiscal expansion, which may further depress the yen. Lee Hardman, senior foreign exchange economist at Mitsubishi UFJ Financial Group (MUFG), said that market participants will pay close attention to what fiscal plans the new coalition government will propose. The dollar against the yen was at 150.710 yen, up 0.08%.

Bank of Japan review member Hajime Takada reiterated his support for resuming interest rate hikes on Monday. He voted against keeping interest rates unchanged in September, a move that provided some support for the yen. Japan's benchmark Nikkei closed up more than 3%, hitting a record high.

The Bank of Japan will hold a policy meeting on October 30. Data from the London Stock Exchange Group (LSEG) shows that the market’s implied probability of raising interest rates by 25 basis points is 23%.

The euro edged higher against the dollar as political tensions in France eased, but investors remained cautious. Markets have not yet fully priced in France's political risk, with the government's decision to freeze pension reform providing only temporary breathing space. The euro was at $1.164 against the dollar, down 0.06%.

The U.S. dollar index, which measures the U.S. dollar against a basket of major currencies, rose 0.053% to 98.587. The index hit 98.025 last Friday, the lowest since October 6. TradeNation senior market analyst David Morrison said in a report that the immediate danger seems to have passed, and investors believe that bankruptcies, bad debts and fraud charges are just isolated incidents and not systemic problems in the banking industry. Economists pointed out that the resilience of the US dollar will be tested in multiple aspects.

Klaus Baader, global chief economist at Societe Generale, said that first of all, the government shutdown is directly and indirectly damaging economic activity, and trade tensions are the second biggest concern. Third, the impact of enacted (import) tariffs continues to be felt, dragging down real household income growth and squeezing corporate profit margins.

Barclays Bank pointed out that since there are no obvious catalysts for the federal government shutdown to end in the next few weeks, the shutdown is likely to continue into November, when political and economic pressure will intensify.

The Australian dollar rose 0.48% against the U.S. dollar on Monday to US$0.652 as data showed that the Asian giant's economy is resilient to tariffs, boosting market sentiment.

International News

The U.S. Senate’s 11th vote on appropriation bill still failed to pass the government “shutdown”Continue

On October 20, local time, the U.S. Senate voted for the 11th time on the government funding bill, but it still failed to pass. Therefore, the "shutdown" of the U.S. government that began on October 1 continues. The bill originally planned to extend government funding until November 21, but ultimately failed to reach the 60-vote threshold required for passage with 50 votes in favor and 43 votes against.

The U.S. Nuclear Safety Administration begins a mandatory vacation

The "shutdown" of the U.S. federal government will soon be three weeks old. On October 20, local time, the U.S. National Nuclear Security Administration, a key agency responsible for the management of U.S. nuclear weapons storage, began to furlough most employees. This is the first time the agency has encountered such a situation since its establishment.

Federal Reserve mouthpiece: U.S. bank reserves have fallen to critical levels

"Fed mouthpiece" Nick Timiraos said that as the U.S. Treasury restructures its cash balance, bank reserves as a proportion of bank assets have recently fallen below 13%. New York Fed President Williams has previously viewed this level as the tipping point for "adequate" reserves.

The EU has not reached a new consensus on issues such as sanctions against Russia

The EU Council meeting was held in Luxembourg on the 20th, mainly discussing the latest situation of the Russia-Ukraine conflict. Regarding key issues such as a new round of sanctions against Russia and how to use Russia's frozen assets to support Ukraine, the parties have not reached a new consensus. In addition, some EU member states expressed dissatisfaction with the meeting between US and Russian leaders in Budapest, the capital of Hungary, and considered it "unbelievable" to invite Russian leaders to Europe. On the same day, Hungarian Prime Minister Viktor Orban stated on social media that a meeting between the leaders of the United States and Russia in Budapest was in Hungary’s interests. But he stressed that Hungary would not invite EU leaders who are "mainly fighting" to participate.

The United States is reportedly delaying the G7's plan to expand the use of Russian assets, and the EU's plan to aid Ukraine has been frustrated

According to people familiar with the situation, the United States has reservations about the EU's plan to expand the use of frozen Russian assets to support Ukraine. U.S. officials told their European counterparts during an International Monetary Fund (IMF) meeting in Washington last week that the U.S. would not join the initiative for the time being, people familiar with the matter said. One of the people familiar with the matter said that the United States was hesitant, citing risks to market stability; another person familiar with the matter said that the United States was just non-committal at this stage. The move represents a setback for the EU. The EU has been trying to push other G7 members to join its plan to raise up to 140 billion euros ($160 billion) in loans to Ukraine using frozen Russian central bank assets. The European xmaccount.commission is working on detailed plans for such a mechanism but will not publish it until EU leaders approve it, possibly at a summit in Brussels later this week. The U.S.'s hesitant stance xmaccount.comes as the White House renews its push to end the Russia-Ukraine conflict. U.S. President Trump met with Ukrainian President Zelensky in Washington last week and announced after a phone call with Russian President Vladimir Putin that he would soonPlans to meet Putin later in Budapest.

The House of Representatives and the Senate of the Japanese Parliament will hold nomination elections for the Prime Minister

On the 21st local time, the House of Representatives and the Senate of the Japanese Parliament will hold the nomination elections for the Prime Minister. Given that the Liberal Democratic Party and the Japan Reform Association have reached an agreement on a joint governance, and the opposition parties have not formed a unified candidate, there is a high probability that Sanae Takaichi, president of the Liberal Democratic Party, will serve as Japan's new prime minister and form a cabinet.

France has lost two international sovereign ratings in a row, and there is still a risk of downgrades in its AA rating in the future

On October 17, S&P Global Ratings downgraded France's long-term and short-term foreign and local currency sovereign credit ratings from "AA-/A-1+" to "A+/A-1", with a stable outlook. This is the second sovereign international rating agency to downgrade France in recent times. On September 12, Fitch also downgraded France's sovereign rating to "A+" with a stable outlook. Bloomberg analysis said that France's loss of double-A ratings from two major international credit rating xmaccount.companies may force some funds with extremely strict investment standards to sell French bonds.

Trump adviser: Tougher measures may be taken if the government shutdown does not end this week

As the U.S. federal government shutdown enters its 20th day, one of President Donald Trump's top economic advisers said that if the government shutdown does not end this week, "tougher measures" may be introduced. Kevin Hassett, director of the White House's National Economic Council, told xmaccount.comBC on Monday that "the White House is going to have to seriously consider" taking "tougher measures" unless Democrats shelve their demands on health care and support a federal spending package. Following weekend "No King" demonstrations, Hassett also said the shutdown could end this week and predicted moderate Democrats would now be more likely to agree to fund the government. He offered no evidence that the standoff was about to end.

Domestic News

National Bureau of Statistics: The main tone of stable economic operation has not changed

When answering reporters’ questions about the performance of the national economy in the first three quarters of 2025, a spokesman for the National Bureau of Statistics said that the main tone of stable economic operation has not changed. Economic growth, employment, prices and balance of payments are the most important macro indicators for observing economic operations. In terms of economic growth, the gross domestic product (GDP) in the first three quarters increased by 5.2% year-on-year, 0.2 and 0.4 percentage points faster than the whole year and the same period last year respectively; economic increment reached 3.9679 billion yuan, an increase of 136.8 billion yuan year-on-year. For an economy as large as ours, it is not easy to maintain stable development, and it is even more valuable in the context of various risks and challenges. Looking at employment prices, in the first three quarters, the national average urban surveyed unemployment rate was 5.2%, the same as in the first half of the year; the consumer price index (CPI) fell slightly by 0.1% year-on-year, but the core CPI excluding food and energy rose by 0.6%, including an increase of 1.0% in September. The increase has expanded for five consecutive months, reflecting the effectiveness of policies to expand domestic demand and promote consumption. From the countryLooking at the international balance of payments, foreign trade has shown strong resilience. The scale of imports and exports of goods has hit a record high for the same period in history, and the growth rate has picked up quarter by quarter. At the end of September, foreign exchange reserves continued to remain above 3.3 trillion US dollars, and the RMB exchange rate rose steadily. Major physical volume indicators also maintained steady growth. In the first three quarters, industrial power generation above designated size increased by 1.6% year-on-year, and cargo turnover and passenger turnover increased by 4.8% and 4.4% respectively.

The above content is all about "[XM Foreign Exchange Decision Analysis]: Oil prices hit a 5-month low, the 11th U.S. Senate government shutdown vote failed, and the gold price rebounded and approached 4400 again". It was carefully xmaccount.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

After doing something, there will always be experiences and lessons learned. In order to facilitate future work, the experience and lessons from past work must be analyzed, researched, summarized, concentrated, and understood at a theoretical level.