On November 2, COMEX gold staged a rebound from the previous week's deep sell-off, surging in a straight line during intraday trading, though it failed to recover the prior day's losses, closing at $3,956.6 per ounce with a gain of 1.48%. Domestic SHFE gold fluctuated upward in the night session, closing at 849.06 yuan per gram with a gain of 1.18%. The most direct driver of the rebound came from the brief "loosening" of inflation expectations caused by the oil price plunge.
On Monday, news that Washington and Tehran had made progress in resuming negotiations pushed crude oil sharply lower — Brent crude fell 7.6% to $104.77 per barrel, while WTI dropped 7.4% to $96.46 per barrel, both marking the largest single-day declines since July. Iran's Supreme Leader was reportedly authorized the president to advance peace talks, and Trump also signaled a desire for a diplomatic resolution. The pullback in oil prices weakened the urgency of energy-driven inflation, providing gold with a breathing window that had been absent for weeks.
However, the other side of the rebound is that data and rate hike expectations are capping upside room. The U.S. October ISM Manufacturing PMI released the same day rose to 55.5, above September's 54.5 and the market expectation of 54.7, marking the tenth consecutive month in expansion territory, with the production index hitting its highest level since November 2021. This set of data continues the tone of economic resilience and stubborn inflation jointly outlined by third-quarter GDP growth of 3.4% and September core PCE at 3.1% year-on-year. CME FedWatch shows that traders are still pricing in about a 75% chance of a December rate hike, only slightly down from 80% a week earlier.
Looking ahead, gold is in the near term caught in a narrow tug-of-war between the rebound window provided by easing oil prices and the upper constraint posed by rate hike expectations. This week carries a high density of variables: the November 3 U.S. midterm elections, JOLTS job openings, and Friday's nonfarm payrolls report will successively test economic resilience and the interest rate path. If employment data weakens notably and December rate hike pricing falls further from around 75%, gold prices may have room to test higher; if the data remains strong, Monday's rebound is more likely to be viewed by the market as a position for bears to re-enter. Data source: Wind, Everbright Futures Research Institute. Author: Shi Yueming. Qualifications: F03097365. Trading advisory qualification: Z0017563. Disclaimer: The information in this report is sourced from publicly available materials. Our company makes no guarantee regarding the accuracy, reliability, and completeness of such information, nor does it guarantee that the information and suggestions contained herein will not undergo any changes. We have strived to make the report objective and fair, but the views, conclusions, and suggestions herein are for reference only and do not constitute recommendations for any specific products or businesses, nor operational basis and suggestions for related instruments. Investors who make investment decisions based on this bear their own profits and losses, which are unrelated to our company and the author. Sina partner platform Everbright Futures account opening — safe, fast, and secure.
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