【Evening session】Loose Expectations Are Optimistic Gold Prices Adjust High

Gold:

The U.S. government shutdown is expected to push up risk aversion in the market on Wednesday, when the U.S. Senate is expected to vote again on a temporary funding bill to extend federal funding. If the bill fails, the U.S. government will shut down until next week, according to U.S. media reports.

With initial claims for U.S. unemployment benefits, factory orders and durable goods orders all delayed through the week ended Sept. 27 due to the government shutdown, it remains unclear whether tonight's nonfarm payrolls data will be released as scheduled.

The poor ADP employment data, which fell far short of expectations, combined with the Fed's forecast that the unemployment rate will rise slightly, means that the weakness in the US job market will support the Fed to cut interest rates in the future.

Plotio good special wisdom rise research senior analyst Chen Yu think： the U.S. job market will continue to provide support for interest rate cuts, combined with the lack of credit in the dollar, gold prices are likely to remain strong.

Technical Analysis: On the daily chart, gold retreated from its previous session's high and closed in bearish territory, forming a bearish engulfing pattern. Short-term traders should remain cautious about potential further price declines. Technical indicators show the market remains above the 20-day moving average, with bullish momentum holding. Key support lies at $3,815 while resistance is observed around $3,862.

Crude oil:

Crude oil prices have recently remained sluggish, primarily due to OPEC+ increasing production since April this year. As OPEC prepares for its upcoming meeting, the group's current strategy has shifted from stabilizing oil prices to reclaiming market share. Investors are concerned that OPEC+ may further boost production during the meeting, which could significantly heighten the risk of oversupply in the crude oil market and put downward pressure on oil prices.

However, recent geopolitical tensions have slightly escalated as Europe and the United States reinstated previously revoked UN Security Council sanctions against Iran, with the risk of further sanctions looming. Iranian Foreign Ministry spokesperson condemned the G7's statement on the nuclear issue, while U.S. President Trump has shifted his stance on the Russia-Ukraine conflict. These heightened geopolitical frictions are expected to moderate oil price declines to some extent.

Technical Analysis: On the daily chart, the market has extended its downward trend for five consecutive sessions with bearish closes, indicating persistent weakness. Technical indicators show the price has broken below both the 20-day and 62-day moving averages, signaling strong bearish momentum. The 4-hour chart reveals the price remains below the 62-day moving average, though with a relatively high deviation rate, prompting investors to remain cautious about short-term oil price rebound risks. Key technical levels to watch today include resistance at $63 and support at $60.

Dollar index:

Fed officials currently share a consensus on implementing rate cuts to ease pressures in the U.S. labor market, though disagreements persist regarding the magnitude of reductions. Federal Reserve Governor Lael Logan stated that a slight increase in the unemployment rate would warrant cautious approach to easing measures. Board Member Charles Goolsbee cautioned against premature rate cuts, emphasizing that the Fed would base decisions on available data rather than official unemployment statistics. However, employment indicators such as the ADP (Association for Economic Advisers) employment report have painted a relatively optimistic outlook for future rate cuts.

According to CME's "FedWatch" data, the probability of the Federal Reserve keeping interest rates unchanged in October stands at 2.7%, while the likelihood of a 25-basis-point rate cut is 97.3%. The odds of maintaining rates in December are 0.2%, with an 8.8% chance of cumulative 25-basis-point cuts and 91.1% probability of 50-basis-point reductions. This indicates that market participants have essentially priced in rate cuts for both remaining policy meetings this year.

Technical Analysis: On the daily chart, the market pattern from the previous session showed a downward initial move followed by a rebound, closing with a long lower shadow bullish candlestick, indicating short-term dollar strength. Technical indicators suggest the price is advancing above the 20-day moving average, suggesting strong potential for the short-term dollar index to maintain its upward trend. Investors should closely monitor support levels at the 20-day moving average during any pullback tests.

Nikkei 225:

In the daily chart, after several trading days of pullbacks, the market has closed bullish with a Morning Star pattern, signaling that this round of correction may be nearing its end. Following the Morning Star formation, today's price action showed strong momentum as it rallied from lower levels. In the short term, watch for potential pullbacks testing support at the 45,350 level.

Copper:

The daily chart shows the market has maintained upward momentum over the past two sessions, closing with small bullish candles that indicate strong resilience. Technically, the breakout from the previous consolidation range suggests potential for further gains. The 20-day and 62-day moving averages have formed a golden cross, creating favorable conditions for continued upside. Key support levels to watch today include the $4.83 area.

October 3rd Market Snapshot:

1. The U.S. Department of Agriculture will stop issuing all reports during the government shutdown.
2. U.S. Treasury Secretary Timothy Beasley said the first interview with the candidate for Federal Reserve chair will be completed next week.
3. U.S. media speculated that the September non-farm data may be ready for release, and Senator Warren called on the government to release it "as scheduled" on Friday.
4. US President Donald Trump has hinted at possible job cuts and program cuts if the government shutdown continues.

October 3rd Key Data/Events Preview:

1. 18:05 Fed's Williams speaks.
2. 20:30 U.S. Unemployment Rate for September.
3. 20:30 US non-farm payrolls for September quarter adjusted.

[Important Notice: The above content and views are provided by the third-party cooperative platform Zhisheng for reference only, and do not constitute any investment advice. Investors who operate according to this will bear the risks.]

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