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News
Tuesday, October 07, 2025
What’s happening: Gold prices rose sharply on Monday, surging past the $3,950 mark to a record high.
What happened: Rising speculations of further rate cuts by the US Federal Reserve this month provided a boost to gold prices.
Rising economic and political concerns in the US, Japan and France also resulted in investors increasing safe-haven assets in their portfolios.
Why it matters: France’s new Prime Minister Sebastien Lecornu resigned on Monday, just weeks after taking office and hours after announcing his ministers, deepening the nation’s political crisis. Lecornu named his cabinet on Sunday but stepped down from his post hours later, which made it one of the shortest-lived governments in the history of France.
Meanwhile, the US government shutdown was extended this week after the Senate failed to advance plans to extend federal funding.
This has resulted in a delay of several major economic reports, including the non-farm payrolls (NFP) data. Investors depended on other economic releases, which indicated weakness in the labour market, leading to increasing speculations of further rate cuts by the Fed. A low-interest-rate environment typically boosts the demand for non-yielding precious metals like gold.
Strength in the US dollar weighed on gold prices, as a higher greenback makes metals more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained to 98.11 on Monday.
While Japan faces a flailing economy, rising inflation and a cost-of-living crisis, the country’s ruling party is gearing up to vote for another new leader in just over a year.
US gold for December delivery jumped 1.7% to close at $3,976.3 per ounce on Monday. The yellow metal had added around 50% year to date, driven by economic and geopolitical concerns, buying by central banks, weakness in the US dollar and prospects of interest rate cuts.
In other metals trading, silver prices surged to $48.448 an ounce, platinum rose to $1,659.3 and palladium climbed to $1,349.00.
What to watch: Investors will keep an eye on talks related to the US government slowdown and comments from the Federal Reserve.
Markets will also watch the developments in France and Japan.
Context: The CAD/USD forex pair fell this morning amid strength in the US dollar.
Details: Data released last week showed the S&P Global Canada services PMI declined to 46.3 in September, from 48.6 in the previous month. This marked the third consecutive month of contraction in services activity and was the weakest reading in three months.
The S&P Global Canada composite PMI also fell to 46.3 in September, from 48.4 in August, indicating contraction in private sector activity for the 10th month in a row.
Strength in the US dollar weighed on the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose 0.1% to 98.21 this morning.
Higher prices of crude oil, one of Canada’s major exports, lent some support to the loonie. WTI crude oil prices gained over 0.1% to $61.77 per barrel this morning.
The CAD/USD pair fell around 0.1% to 1.3950 this morning.
What to watch: Data on Canada’s balance of trade (1630 UAE Time) and Ivey PMI (1800 UAE Time) will be released today. Canada’s trade deficit, which narrowed to C$4.9 billion in July from C$6.0 billion in the previous month, is expected to widen to C$5.55 billion in August. Analysts expect the Ivey Purchasing Managers Index in Canada to rise to 51.2 in September, from 50.1 in August.
Investors will also keep an eye on key jobs data, scheduled for release on Friday, which will provide further insights into the Bank of Canada’s policy path ahead.
Other Markets: US trading indices closed mixed on Monday, with the S&P 500 and Nasdaq 100 up by 0.36% and 0.78%, respectively, and the Dow Jones index down by 0.14%.
Ukraine’s General Staff said Ukraine’s drones hit the Feodosia oil terminal in Russia’s occupied Crimea, which resulted in a widespread fire. The news sent the RUB/USD pair lower in forex trading this morning.
Philippines’ manufacturing production surged by 2.0% year-over-year in August, following a 1.9% decline in the previous month, which lent support to the PHP/USD forex pair.
Colombia’s exports declined 0.1% year-over-year to $3.84 billion in August. This being much smaller than the 4.1% contraction in the previous month sent the COP/USD pair slightly higher in forex trading this morning.
Mexico’s consumer confidence index declined 0.2 points to a reading of 46.5 in September, exerting pressure on the MXN/USD forex pair.
Australia’s Westpac-Melbourne Institute Consumer Sentiment Index fell 3.5% to 92.1 in October, following a 3.1% decline in September. However, the AUD/USD pair rose in forex trading this morning.
Spain’s 12-month Letras auction (1240 UAE Time) and 6-month Letras auction (1240 UAE Time), Singapore’s foreign exchange reserves (1300 UAE Time), UK’s Treasury Gilt 2028 Tender (1300 UAE Time), Germany’s 5-year Bobl auction (1330 UAE Time), Mexico’s auto exports (1600 UAE Time) and auto production (1600 UAE Time), US Redbook index (1655 UAE Time), RCM/TIPP economic optimism index (1810 UAE Time), consumer inflation expectations (1900 UAE Time), 3-year Note auction (2100 UAE Time) and consumer credit change (2300 UAE Time), Brazil’s car production (1700 UAE Time) and new car registrations (1700 UAE Time), Russia’s foreign exchange reserves (1700 UAE Time) as well as Turkey’s Treasury cash balance (1915 UAE Time).
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