US stock indices showed mixed performance on Monday, with gold continuing to hover near $4,000 and the euro hitting a three-month low.
AI investments remained a key market focus. OpenAI announced a $38 billion computing power partnership with Amazon (+4%), pushing the latter's stock to a record high. Meanwhile, Microsoft (-0.15%) secured a five-year agreement with data center operator IREN (+11.52%) to lock in additional computing resources amid surging cloud demand. The Nasdaq and S&P 500 edged higher, while the Dow Jones closed lower.
US ISM Manufacturing PMI data revealed an eighth consecutive month of contraction, with new orders and exports remaining weak. Despite this, the US dollar index extended its four-day rally, nearing the 100 mark. Market-implied odds of a December rate cut held steady at around 65%, significantly lower than the 90% seen before the Fed meeting.
Gold traded flat at $4,001 with reduced volatility, while silver dipped to around $48. WTI crude edged up to $60.97 after OPEC+ decided against increasing output in Q1 2026, though the rebound momentum weakened.
Non-US currencies remained under pressure as the dollar strengthened. The euro fell for a fourth straight day to 1.1520, its lowest since August, while the pound broke below key support at 1.3150, signaling further downside. USD/JPY climbed to 154.24, and BTC dropped below $107,000 overnight.
The US government shutdown has now lasted 34 days, potentially surpassing the 35-day record set during the Trump administration. Separately, the Supreme Court will hold a hearing on November 5 regarding the Trump-era "reciprocal tariffs."
Attention turns to the RBA’s rate decision on Tuesday, with markets widely expecting no change.
**Gold (XAU/USD) 1-Hour Chart** Gold remains unable to break above the critical resistance zone of $4,020–$4,030, keeping sell-on-rally strategies viable. Near-term, bulls aim to hold $4,000; failure could see a retest of trendline support near $3,965. With macro stability and declining volatility, gold may continue consolidating narrowly, though dollar strength weighs on prices.
**China’s Gold Tax Reform Shakes Jewelers** Beyond global gold price movements, China’s newly implemented tax reforms are drawing attention from investors. Effective November 1, 2025, the policy reclassifies gold traded on the Shanghai Gold Exchange and Shanghai Futures Exchange into "investment" and "non-investment" categories, eliminating VAT deductions for resold investment gold (e.g., bars, ingots) and slashing deduction rates for jewelry/industrial gold from 13% to 6%.
For example, a jewelry firm processing ¥10M of gold into ¥13.5M worth of products would see tax liabilities surge from ¥605,000 to ¥1.155M under the new rules. Wall Street analysts project net profit declines of 15%, 26%, and 6% for major jewelers like Lao Miao, Chow Tai Fook, and Luk Fook in FY2026. Industry-wide price hikes are likely to offset costs, potentially benefiting larger players. Questions remain whether the reform aims to curb gold bar investments or also suppress jewelry demand—further policy clarifications are expected soon.
Comments