Gold extended its decline on Thursday, edging closer to the $4,000 mark and marking its third consecutive day of losses. The pullback underscores growing investor caution as risk appetite tentatively returns to global markets. After weeks of haven driven flows, traders are reassessing exposure amid easing volatility in bond markets and renewed strength in the US dollar.
Oil Jumps After Washington Targets Russia’s Energy Giants
Crude oil prices surged nearly 3% overnight following Washington’s latest move to tighten sanctions on Russia’s largest producers a clear escalation in its effort to pressure President Vladimir Putin into ending the war in Ukraine. The move reignited supply concerns and underscored the geopolitical fragility of the global energy market. Analysts warn that extended sanctions could disrupt trade flows, heightening volatility in both crude and refined product markets.
Dollar Firm, Yen Weakens for Fifth Day
The Japanese yen weakened for a fifth straight session, pressured by widening yield differentials as US Treasury yields steadied. The 10-year Treasury yield held around 3.95% after a modest dip on Wednesday, supported by strong demand in a $13 billion auction of 20-year bonds. Meanwhile, the US dollar index edged 0.1% higher, buoyed by safe haven inflows and renewed confidence in the greenback’s carry advantage.
Beijing’s Fourth Plenum Readout in Focus
In China, investors are awaiting the outcome of the Communist Party’s Fourth Plenum a key policy setting meeting expected to outline Beijing’s next phase of economic strategy. The focus will likely fall on fiscal reform and growth stabilization measures amid soft domestic demand and lingering property sector stress. The results could set the tone for regional markets heading into November.
US-China Diplomacy Under the Microscope
Adding to the week’s geopolitical calendar, US Treasury Secretary Scott Bessent is scheduled to meet Chinese counterparts over the weekend ahead of the much anticipated Trump–Xi talks. Market participants remain uneasy, with traders noting that “this could be another temporary calm before the next trade flare up.” While short term volatility has moderated, investors remain sensitive to any signs of renewed tariff rhetoric or export restrictions.
Japan Unveils Fresh Stimulus to Cushion Inflation Pain
In Japan, newly appointed Prime Minister Sanae Takaichi unveiled another round of economic stimulus aimed at supporting households and small businesses struggling under persistent inflation. The measures signal Tokyo’s continued reliance on fiscal tools to stabilize domestic demand, even as the yen’s weakness complicates the inflation outlook. Analysts expect Japan’s policy mix a combination of targeted subsidies and accommodative monetary settings to remain in place well into 2026.
Market Outlook: Watching the Crosscurrents
With gold losing momentum, oil surging, and geopolitical risks multiplying, traders are entering a delicate phase of cross-asset repositioning. The interplay between energy sanctions, central bank policy expectations, and trade diplomacy will dictate short term sentiment. For now, market volatility remains elevated, making this week’s developments in Beijing, Washington, and Tokyo pivotal for traders calibrating exposure ahead of month-end.
Disclaimer: This report is for informational purposes only. It does not constitute investment advice or represent the official views of any central bank or regulatory body.