On Thursday (October 24th), global market volatility intensified, accompanied by a series of macro data releases and rising expectations for the US election, presenting a complex multi product linkage situation in the market. The price trends of gold, the US dollar, and crude oil have attracted widespread market attention, while the volatility of the bond market has intensified, making investors nervous.

Gold market: Safe haven demand supports rebound

Although the strengthening of the US dollar has suppressed some of the gains, gold still maintains an upward trend. Spot gold rose 0.7% on Thursday, closing at around $2735. Previously, gold prices hit a historic high of $2758.37 on Wednesday. The demand for safe haven has become the main driving force behind the rise of gold, especially as tensions in the Middle East continue to escalate, exacerbating market concerns.

According to analysis by well-known institutions, the recent performance of gold prices has been excellent, driven not only by the uncertainty of the US presidential election, but also by the uncertainty of the global economic outlook and geopolitical risks. The expectation that former US President Trump may return to the White House has boosted market demand for safe haven, further pushing up gold prices. Sugandha Sachdeva, founder of SS WealthStreet based in New Delhi, said that it is expected that gold prices may climb to $2800 in the remaining time of 2024 and break through the $3000 mark by 2025. This bullish outlook is mainly driven by global central bank gold purchases and ongoing geopolitical instability factors.

However, despite the strong upward momentum shown by gold, the strengthening of the US dollar still exerts pressure on it. The US dollar index is hovering around a three-month high of 104.30, temporarily limiting further upward potential. This also means that investors holding other currencies may weaken their demand for gold, and the short-term upward momentum of gold prices may slow down.

Foreign exchange market: US dollar strengthens, Japanese yen under pressure

In terms of the foreign exchange market, the US dollar has benefited from the hawkish stance of the Federal Reserve and continues to maintain its strength. The USD/JPY surged 1.1% overnight, breaking through the key level of 153, before slightly rebounding and falling to 152.25. The recent speech by Bank of Japan Governor Kazuo Ueda indicates that it will still take time for the Bank of Japan to achieve its inflation target, which further puts pressure on the yen.

Deutsche Bank's implied currency volatility index rose to a three week high on Wednesday. Carol Kong, a monetary strategist at the Commonwealth Bank of Australia, said that the US dollar has been performing strongly recently, and the market expects the Federal Reserve to maintain high policy rates. The expectation of Trump's victory has further boosted this trend. The increase in implied volatility of foreign exchange is expected to continue until the end of the election, and the foreign exchange market may experience greater volatility due to the uncertainty of the election results.

The EUR/USD rebounded slightly by 0.2% on Thursday, reaching $1.0799, but overall it is still in a downward channel. Although the initial value of the Purchasing Managers' Index (PMI) for manufacturing in the Eurozone has rebounded to 45.9, the PMI for services has fallen to an eight month low of 51.2, indicating that economic activity in the Eurozone remains weak. This has further raised market expectations for future interest rate cuts by the European Central Bank, suppressing the rebound potential of the euro.

Energy market: Crude oil prices stop falling and rebound

The crude oil market is also full of volatility. The increase in US crude oil inventories has put some pressure on oil prices in the short term, but Brent crude oil futures prices rebounded on Thursday, rising 1.1% to $75.76 per barrel. This rebound is partly due to the market's continued concerns about the situation in the Middle East, particularly the increased supply risks posed by Israel's military actions in Syria.

Analysts point out that the crude oil market is still affected by global supply chain tensions and geopolitical risks in the Middle East. Although the increase in US crude oil inventories may suppress the rise in oil prices in the short term, if the situation in the Middle East worsens further, the risk of supply disruption will continue to support the rise in oil prices.

Meanwhile, internationally renowned institutions have pointed out that the uncertainty of the global economic outlook is also affecting the trend of oil prices. The strong US economic data has intensified market concerns about weak global demand, further suppressing the upward potential of oil prices.

Bond market: Increased volatility in yields, investors seeking safe assets

The performance of the US bond market has also attracted wide attention. The 10-year US Treasury yield fell 3 basis points to 4.2157% on Thursday, after hitting a three-month high of 4.26%. The recent rise in US bond yields is mainly due to strong economic data and less dovish remarks from Federal Reserve officials, which has weakened market expectations for aggressive interest rate cuts.

Analysts from Mizuho Securities stated that the sell-off in the bond and stock markets is not just about capital rotation, but actually a process of risk repricing. The main driving force for selling is the increase in yield, rather than a simple market clearance behavior. Although Tiffany Wilding, an economist at Pacific Investment Management, remains cautious about the rise in bond yields, historical data shows that short-term fluctuations in 10-year yields cannot effectively predict changes in future interest rate cuts.

In addition, in the European bond market, the yield of German 10-year treasury bond fell by 4 basis points to 2.273%, while the yield of Italian 10-year treasury bond fell to 3.484%. The market generally expects the European Central Bank to cut interest rates by 25 to 50 basis points at its December meeting, providing some support for the eurozone bond market.

Market Summary and Outlook

The main driving forces in the current market are the Federal Reserve's monetary policy stance and the uncertainty of the US presidential election. As the election approaches, market volatility is expected to further intensify, especially in the foreign exchange and bond markets, and investors should closely monitor further statements and policy changes from Federal Reserve officials. Meanwhile, the development of the Middle East situation and the release of global economic data will also have a profound impact on the gold and oil markets.

Overall, the global market presents a complex situation of long and short positions intertwined in the short term, with the strength of the US dollar and the increasing demand for safe haven becoming the dominant factors. For professional traders, the volatile market is both a challenge and an opportunity, and accurately grasping the trend changes of various varieties will be the key to winning the market.