Early Session-20261022
Precious Metals: Oil Prices Remain Elevated; Precious Metals Trade Weakly in a Narrow Range
[Market Review]
Precious metals: In overseas markets, precious metals weakened in the short term. As of 8 a.m. today, London gold was trading around $4,125.31; London silver around $57.45; London platinum around $1,613.93; and London palladium around $1,083.01.
[Key News]
1. The U.S. is sending a third aircraft carrier and about 10k troops to the Middle East, while Israel steps up plans for strikes against Iran and Iran’s foreign minister warns that a new round of war could break out. Although Trump opposes restarting hostilities before the midterm elections, Israel continues military drills and preparations. As tensions among the U.S., Israel, and Iran escalate, the risk of regional conflict intensifying is rising. Brent crude has broken above $110 and WTI has topped $100, delivering a new shock to energy markets.
2. Trump makes another move to push down oil prices ahead of the midterms: the U.S. plans to lend out one-third of its heating oil reserves. The Department of Energy plans to lend out up to 315k barrels of heating oil, about one-third of the Northeast’s emergency heating oil reserves, with delivery expected to be completed by November 13. Department of Energy officials said the government will assess whether further use of the reserves is necessary.
3. Macron’s Middle East trip secures diesel supplies, with France receiving nearly 300k additional tonnes per month and Saudi Arabia pledging to supply for as long as needed. Saudi Arabia agreed to provide France with an additional 95k tonnes of diesel per month, while the UAE and Bahrain will each provide an additional 100k tonnes of oil monthly, with French energy giant TotalEnergies involved in implementing the arrangement; the duration of the additional supplies remains unclear. Macron said in September that France needed to be prepared to use “military means” to respond to international crises, stressing that it would do everything possible to reopen the Strait of Hormuz and would not rule out lowering fuel taxes to curb a surge in oil prices.
[Analysis]
Oil prices remain elevated, and the risk of U.S. reflation persists, while hawkish signals weigh on the valuation of non-yielding assets. Geopolitically, progress in U.S.-Iran ceasefire negotiations has been uneven. If tensions ease, oil prices will fall and inflation expectations will cool, reducing macroeconomic pressure on gold; if the conflict escalates again, a surge in oil prices will reinforce expectations of tighter policy.
Current inflation data are highly correlated with oil prices. As a result, in the absence of new data-driven catalysts, the market is showing a “gold-oil seesaw” in capital allocation. Attention should be paid to the risk of inflation spillover from persistently high oil prices, as well as the risk of endogenous inflation driven by AI demand. U.S. Treasury yields are currently under considerable pressure, mainly due to the risk of inflation reigniting.
[Strategy Recommendations]
1. Directional: Keep positions light. Current macroeconomic pressure is high, and CPI has been stronger than expected, weighing on prices in the short term. Until oil prices fall significantly and stabilize, favor testing long positions at lower levels and trading within a range; chasing the rally carries considerable risk. Fundamental support for silver, platinum, and palladium is relatively limited, so generally use gold as the basis for high-volatility trading.
2. Arbitrage: Go long the gold-silver ratio;
3. Options: Wait and see.
The above views are for reference only
Precious Metals: Oil Prices Remain Elevated; Precious Metals Trade Weakly in a Narrow Range
[Market Review]
Precious metals: In overseas markets, precious metals weakened in the short term. As of 8 a.m. today, London gold was trading around $4,125.31; London silver around $57.45; London platinum around $1,613.93; and London palladium around $1,083.01.
[Key News]
1. The U.S. is sending a third aircraft carrier and about 10k troops to the Middle East, while Israel steps up plans for strikes against Iran and Iran’s foreign minister warns that a new round of war could break out. Although Trump opposes restarting hostilities before the midterm elections, Israel continues military drills and preparations. As tensions among the U.S., Israel, and Iran escalate, the risk of regional conflict intensifying is rising. Brent crude has broken above $110 and WTI has topped $100, delivering a new shock to energy markets.
2. Trump makes another move to push down oil prices ahead of the midterms: the U.S. plans to lend out one-third of its heating oil reserves. The Department of Energy plans to lend out up to 315k barrels of heating oil, about one-third of the Northeast’s emergency heating oil reserves, with delivery expected to be completed by November 13. Department of Energy officials said the government will assess whether further use of the reserves is necessary.
3. Macron’s Middle East trip secures diesel supplies, with France receiving nearly 300k additional tonnes per month and Saudi Arabia pledging to supply for as long as needed. Saudi Arabia agreed to provide France with an additional 95k tonnes of diesel per month, while the UAE and Bahrain will each provide an additional 100k tonnes of oil monthly, with French energy giant TotalEnergies involved in implementing the arrangement; the duration of the additional supplies remains unclear. Macron said in September that France needed to be prepared to use “military means” to respond to international crises, stressing that it would do everything possible to reopen the Strait of Hormuz and would not rule out lowering fuel taxes to curb a surge in oil prices.
[Analysis]
Oil prices remain elevated, and the risk of U.S. reflation persists, while hawkish signals weigh on the valuation of non-yielding assets. Geopolitically, progress in U.S.-Iran ceasefire negotiations has been uneven. If tensions ease, oil prices will fall and inflation expectations will cool, reducing macroeconomic pressure on gold; if the conflict escalates again, a surge in oil prices will reinforce expectations of tighter policy.
Current inflation data are highly correlated with oil prices. As a result, in the absence of new data-driven catalysts, the market is showing a “gold-oil seesaw” in capital allocation. Attention should be paid to the risk of inflation spillover from persistently high oil prices, as well as the risk of endogenous inflation driven by AI demand. U.S. Treasury yields are currently under considerable pressure, mainly due to the risk of inflation reigniting.
[Strategy Recommendations]
1. Directional: Keep positions light. Current macroeconomic pressure is high, and CPI has been stronger than expected, weighing on prices in the short term. Until oil prices fall significantly and stabilize, favor testing long positions at lower levels and trading within a range; chasing the rally carries considerable risk. Fundamental support for silver, platinum, and palladium is relatively limited, so generally use gold as the basis for high-volatility trading.
2. Arbitrage: Go long the gold-silver ratio;
3. Options: Wait and see.
The above views are for reference only