《Market Pulse》On Friday last week (October 2), the U.S. employment report for September showed overall poor performance. The much-watched non-farm payroll increased by only 29,000 jobs, far below the expected 89,000 and revised down from the previous 162,000 to 133,000. The unemployment rate rose to 4.4%, up 0.1 percentage point from both the forecast and prior value of 4.3%. The monthly increase in average hourly earnings slowed to 0.1%, also below the expected and previous figure of 0.3%. All these figures indicate a clear slowdown in U.S. economic growth. On Wednesday last week (September 30), the U.S. PCE price index rose only 3% year-on-year (lower than the expected 3.3%), indicating inflationary pressures have not worsened. Combined with dovish signals recently sent by Federal Reserve officials, market expectations for a rate hike this month have significantly cooled. The probability of a rate hike on October 28 has plunged to just 22%, down from 64% a week earlier.
In normal circumstances, slowing economic growth and reduced rate hike expectations would be major bearish factors for the dollar. However, the U.S. Dollar Index has risen instead of falling. The core driver behind this move is the sharp surge in U.S. bond yields. Last week, the yield on the 10-year U.S. Treasury briefly hit 5.345%, a 24-year high. With long-term bond yields remaining elevated, the U.S. dollar is likely to maintain its strength in the short term, while gold prices and non-U.S. currencies face downward pressure this week. It can be said that the strong rise in U.S. Treasury yields has become the biggest obstacle to further gains in gold prices.
Under repeated pressure from Trump, the Group of Seven (G7) announced a consensus late on Friday last week, planning to release up to 100 million barrels of strategic oil reserves over the next four months to ease the current tight global energy supply. However, this intervention failed to calm market concerns over supply. After the news was released, New York crude futures briefly dropped from $93 per barrel to $88, but quickly recovered and eventually closed at $91.26, reflecting market views that the release of 100 million barrels will have limited effect on lowering oil prices.
Recently, Trump has also been pressuring several European countries to release their crude oil reserves, with the core motive being to salvage his electoral prospects in the November midterm elections. His previous hardline stance toward Iran caused international oil prices and domestic U.S. fuel prices to surge, sharply increasing living costs and triggering strong public dissatisfaction toward the Republican Party. Trump's approval rating has also fallen to a new low. Judging from the current situation, the risk of the Republican Party losing control of both the Senate and House of Representatives is extremely high.
Although Trump has ordered three aircraft carrier strike groups to assemble in the Persian Gulf, signaling a large-scale military strike against Iran, the author believes this is more of a bluff before negotiations, and it is expected that both sides will eventually reach an agreement. The main reasons are not only high anti-war sentiment within the United States, but also the tight inventory of U.S. military offensive and defensive missiles, making it difficult to sustain a prolonged large-scale military conflict.
If this reasoning holds, once the U.S. and Iran reach an agreement, oil prices will drop significantly. The easing of inflationary pressure will reduce rate hike expectations, thereby triggering a pullback in the U.S. dollar. The U.S. Treasury yields, which have been most troubling to the U.S. Treasury Department, would also decline accordingly. At that time, gold prices, which have been under pressure for a long time, are expected to resume their upward trajectory.
*Gold Price Technical Analysis*
Gold prices have broken below the 200-day moving average (approximately $4,248), and the RSI is around 39.5, in a neutral-to-weak zone, indicating short-term downward pressure on gold prices. Upward resistance levels are sequentially at $4,235, $4,316, $4,371, and $4,399, while support levels below are at $4,110, $3,995, and $3,944.
*Key Events This Week*
Monday (5th)
22:00: U.S. ISM September Services PMI, forecast monthly rise to 55.7, previous value was 55.4.
Tuesday (6th)
14:35: Speech by Bank of Japan Governor Kazuo Ueda
Thursday (8th)
01:00: U.S. 10-year Treasury auction, last auction stop-out yield was 4.834%.
02:00: Federal Reserve releases September FOMC meeting minutes
Friday (9th)
01:00: U.S. 30-year Treasury auction, last auction stop-out yield was 5.308%.
*This article was written at 11:05 a.m. on October 5, 2026
By Mao Wai-Lin, Head of Futures Business and Market Analysis Department, High Song
*Articles published in ETNet, signed or unsigned, represent the authors' personal opinions and do not necessarily reflect ETNet's stance. ETNet's role is to provide a free platform for expression.
In normal circumstances, slowing economic growth and reduced rate hike expectations would be major bearish factors for the dollar. However, the U.S. Dollar Index has risen instead of falling. The core driver behind this move is the sharp surge in U.S. bond yields. Last week, the yield on the 10-year U.S. Treasury briefly hit 5.345%, a 24-year high. With long-term bond yields remaining elevated, the U.S. dollar is likely to maintain its strength in the short term, while gold prices and non-U.S. currencies face downward pressure this week. It can be said that the strong rise in U.S. Treasury yields has become the biggest obstacle to further gains in gold prices.
Under repeated pressure from Trump, the Group of Seven (G7) announced a consensus late on Friday last week, planning to release up to 100 million barrels of strategic oil reserves over the next four months to ease the current tight global energy supply. However, this intervention failed to calm market concerns over supply. After the news was released, New York crude futures briefly dropped from $93 per barrel to $88, but quickly recovered and eventually closed at $91.26, reflecting market views that the release of 100 million barrels will have limited effect on lowering oil prices.
Recently, Trump has also been pressuring several European countries to release their crude oil reserves, with the core motive being to salvage his electoral prospects in the November midterm elections. His previous hardline stance toward Iran caused international oil prices and domestic U.S. fuel prices to surge, sharply increasing living costs and triggering strong public dissatisfaction toward the Republican Party. Trump's approval rating has also fallen to a new low. Judging from the current situation, the risk of the Republican Party losing control of both the Senate and House of Representatives is extremely high.
Although Trump has ordered three aircraft carrier strike groups to assemble in the Persian Gulf, signaling a large-scale military strike against Iran, the author believes this is more of a bluff before negotiations, and it is expected that both sides will eventually reach an agreement. The main reasons are not only high anti-war sentiment within the United States, but also the tight inventory of U.S. military offensive and defensive missiles, making it difficult to sustain a prolonged large-scale military conflict.
If this reasoning holds, once the U.S. and Iran reach an agreement, oil prices will drop significantly. The easing of inflationary pressure will reduce rate hike expectations, thereby triggering a pullback in the U.S. dollar. The U.S. Treasury yields, which have been most troubling to the U.S. Treasury Department, would also decline accordingly. At that time, gold prices, which have been under pressure for a long time, are expected to resume their upward trajectory.
*Gold Price Technical Analysis*
Gold prices have broken below the 200-day moving average (approximately $4,248), and the RSI is around 39.5, in a neutral-to-weak zone, indicating short-term downward pressure on gold prices. Upward resistance levels are sequentially at $4,235, $4,316, $4,371, and $4,399, while support levels below are at $4,110, $3,995, and $3,944.
*Key Events This Week*
Monday (5th)
22:00: U.S. ISM September Services PMI, forecast monthly rise to 55.7, previous value was 55.4.
Tuesday (6th)
14:35: Speech by Bank of Japan Governor Kazuo Ueda
Thursday (8th)
01:00: U.S. 10-year Treasury auction, last auction stop-out yield was 4.834%.
02:00: Federal Reserve releases September FOMC meeting minutes
Friday (9th)
01:00: U.S. 30-year Treasury auction, last auction stop-out yield was 5.308%.
*This article was written at 11:05 a.m. on October 5, 2026
By Mao Wai-Lin, Head of Futures Business and Market Analysis Department, High Song
*Articles published in ETNet, signed or unsigned, represent the authors' personal opinions and do not necessarily reflect ETNet's stance. ETNet's role is to provide a free platform for expression.
