General Market Analysis – 17/10/25

US Stocks Pull Back as Trade Tensions Increase – Dow down 0.65%

US stock indices fell in trading yesterday as trade tensions between the US and China continued to ratchet higher. The Dow fell 0.65% to 45,952, the S&P dropped 0.63% to 6,629, and the Nasdaq lost 0.47% to close at 22,562. Treasury yields dropped as Fed members talked up rate cuts, the 2-year down 7.3 basis points to 3.424%, and the benchmark 10-year fell 5.4 basis points to 3.974%. The dollar also lost ground against the majors, the DXY down 0.45% to 98.35. Oil prices dropped again to hit new multi-month lows, Brent off 1.45% to $61.01, and WTI down 1.39% to $54.46 a barrel. Gold again powered higher to record more record highs, up 2.83% on the day to close at $4,326.58.

Gold Continues to Fly Higher

Gold again powered higher in trading yesterday as the planets aligned to push the world’s favorite precious metal to record levels. It added another 2.8% in yesterday’s session to lock in a 15% rise this month and a near 25% appreciation since it broke the previous high on September 2nd. Its current high is $4,374.88, but investors now feel that it could hit the key $4,500 level in short order if the flows that it has seen recently continue. Traders are still trying to comprehend the epic move that we have seen in the last six weeks, with various theories being thrown out in the market—from currency debasement to haven flows and huge portfolio reallocations—but whatever the reason behind the move, the trend is clearly still higher. Support levels are moving further away due to the momentum of the move, with trendline support now on the daily chart down around the $4,050 level. While traders are wary of sharp pullbacks, it does seem that dips will be well supported as the move continues.

Quiet Calendar Day to Finish the Week

It is a very limited macroeconomic calendar today that closes out another busy week for traders. Investors are again expecting geopolitical updates to dominate flows today, and there is little scheduled that will distract traders’ attention from newswires. The Asian session is set to open on the back foot after a poor day on Wall Street as trade tensions between the US and China continue to simmer. The lack of US data continues to weigh on markets as we close out another week of the US government shutdown, with some commentators estimating that the closure is costing close to $15 billion a day. We do again hear from some senior central bankers over the course of the day, with the Bundesbank’s Joachim Nagel and the MPC’s Sarah Breedon speaking in Washington, which could affect the euro and pound; however, expect trade updates to dominate.

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