I. International Gold Market and Core Fundamental News

During Asian trading hours on October 6 (Beijing Time), spot gold in London plunged sharply at one point, falling to $4,104 per ounce and nearing the key psychological level of $4,100 per ounce. Subsequent short-covering capital triggered a modest rebound. By the mid-session, spot gold traded around $4,122 per ounce, down 0.38% on the day. The front-month COMEX gold futures contract in New York also faced concurrent downward pressure, quoted near $4,150, tracking the price action of spot gold. Silver outperformed gold; spot silver remained above $60 per ounce with mild fluctuations. The gold-silver ratio stayed elevated, reflecting diverging capital preferences in the market.
 

At present, the core anchor for gold pricing remains Federal Reserve interest rate expectations. The latest CME FedWatch data shows the market prices in a 77.3% probability that the Federal Reserve will hold benchmark interest rates unchanged at its October policy meeting, while a 22.7% probability is priced in for a 25-basis-point rate hike this month. Forward-looking expectations, however, remain hawkish: the market assigns a 67.8% probability of a 25-basis-point hike at the December meeting, and 18.8% of market participants have priced in a potential 50-basis-point hike in December. This expectation structure fuels the bull-bear standoff for gold. While near-term risks of an October rate hike have eased and offered partial support to gold prices, the market has not fully ruled out the possibility of further monetary tightening by the Fed within the year. Long-dated US Treasury yields stay at relatively high levels, and the US Dollar Index remains firm, lifting the opportunity cost of holding gold and capping upside potential. Gold itself generates no interest income. When real US Treasury yields rise, institutional capital tends to exit precious metals and rotate into fixed-income assets such as US Treasuries. This constitutes one of the root causes behind the repeated pullbacks after gold rallies in recent periods.
 

Labor market and inflation data are critical variables shaping the Fed’s policy judgment. The previously released US September non-farm payrolls significantly missed market estimates, with new job additions far below forecasts, a modest rise in the unemployment rate, higher labor force participation, and slower month-on-month wage growth. This weak jobs report temporarily spurred a gold rebound as markets began pricing in a US economic slowdown. Nevertheless, markets quickly realized that labor deterioration does not guarantee a rapid decline in inflation. The Fed’s current policy focus centers on sticky inflation. Unless core PCE inflation falls sustainably to the target range, the Fed will keep the option of additional rate hikes on the table. Should CPI and PCE inflation data rebound again, rate-hike expectations will surge rapidly, and gold will face renewed selling pressure.
 

From a medium-to-long-term perspective, sustained gold purchases by central banks worldwide form key support for gold’s downside. Global central banks have maintained a net buying trend for many years. To diversify foreign exchange reserves, reduce reliance on dollar-denominated assets and hedge geopolitical risks, central banks keep accumulating gold. This long-term buying interest limits deep declines in gold prices. That said, short-term speculative capital is dominated by rate expectations, and the durability of safe-haven buying is weak. Only when geopolitical conflicts suddenly escalate will short-term safe-haven capital flood into gold. While tensions persist in the Middle East, a full-scale large-scale conflict has not erupted. Safe-haven sentiment only sees intermittent, short-lived spikes, making it difficult to drive a sustained unilateral rally for gold. The market mostly trades within a range, featuring repeated sharp rallies and crashes.
 

Institutional views from multiple major investment banks suggest gold will keep fluctuating within a high range in the short run amid intensifying bull-bear confrontation. Should real US Treasury yields climb further, gold may test lower support levels. Conversely, if upcoming US inflation data cools markedly, markets will reprice rate-cut expectations and unlock upside room for gold. Current market sentiment among investors is cautious; long positions have declined while short positions have increased, pointing toward further widening of short-term volatility.
 

II. International Crude Oil Market and Fundamental News

In the crude oil market, during Asian trading hours on October 6, NYMEX WTI light crude oil futures climbed to $90 per barrel at one point, rising 0.64% intraday. On the prior trading day (October 5), oil prices posted a notable correction: WTI crude closed at $89.43 per barrel, down 1.84%. The front-month Brent crude futures contract settled at $100.32 per barrel, a 1.89% drop. Benchmark oil benchmarks rallied then retreated, as market expectations for crude supply underwent substantial shifts.
 

The biggest variables in the crude oil market are Middle Eastern geopolitical risks and the global release of strategic petroleum reserves. The Strait of Hormuz serves as a chokepoint for global oil transportation, handling roughly one-third of global seaborne crude exports. Ongoing US-Iran confrontation creates uncertainty over shipping safety in the strait, permanently embedding a geopolitical risk premium into oil prices. Should shipping through the strait be materially disrupted, global crude supply would contract rapidly and oil prices would surge. However, recent market observations show Middle Eastern crude exports have recovered. During parts of late September, export volumes returned to pre-conflict levels, easing fears of supply disruption and compressing the geopolitical premium.
 

The G7 reached an agreement to release a total of 100 million barrels of crude oil and gasoil from strategic reserves in batches over the next four months. The measure aims to ease tightness in global oil product supply and curb energy prices. Institutions including Goldman Sachs analyze that this large-scale reserve release will directly boost near-term market supply, compress crude’s risk premium and place sustained downward pressure on oil prices in the short term. Meanwhile, Saudi Aramco cut its official selling price for November crude to Asian customers, marking the steepest reduction in six years. This signals Saudi Arabia does not want an unrestrained spike in oil prices, eroding confidence among crude bulls. Still, senior Saudi Aramco executives warned that supply deficits will remain in the global crude market over the medium to long term. Once reserve releases end and oil-producing nations maintain production cuts, the supply-demand balance will tighten again, and medium-to-long-term downside support for oil prices remains intact.
 

In its monthly report, the International Energy Agency (IEA) warned that continued disruption to Middle Eastern seaborne oil trade would expose the global oil market to supply shortfalls of millions of barrels per day, depleting inventory buffers and amplifying oil price volatility risks. Global crude inventories are generally low at present, lacking adequate safety buffers. Any sudden supply outage will trigger an immediate price response. For now, however, the US continues releasing strategic petroleum reserves, and domestic US crude output remains high, partially offsetting potential supply risks from the Middle East.
 

On the demand side, the global economic recovery is uneven. Manufacturing recovery in Europe and the US lacks momentum, leading to subdued energy consumption growth. By contrast, crude demand in Asia remains resilient. Major emerging economies such as China and India maintain high crude import volumes, underpinning oil consumption. Markets worry that sustained Fed rate hikes will suppress aggregate global demand, trigger an economic slowdown and weigh on crude consumption. This represents the biggest medium-to-long-term bearish factor for crude bulls.
 

According to comprehensive institutional outlooks, the crude oil market has entered a short-term bull-bear equilibrium phase. On one hand, Middle Eastern conflicts carry perpetual escalation risks that can trigger oil price rallies. On the other hand, G7 reserve releases, recovering Middle Eastern exports and Saudi price cuts constitute clear bearish drivers. Crude oil is expected to trade mostly in a wide range, with news exerting an outsized impact on pricing. Sudden events can easily trigger sharp intraday price gaps, and trading risks are substantially higher than normal periods.
 

III. Gold-Crude Correlation Logic and Overall Market Outlook

Under conventional market logic, gold and crude oil typically rise simultaneously when Middle Eastern geopolitical tensions escalate: crude benefits from supply contraction expectations, while gold attracts safe-haven capital inflows. Recently, however, the two assets have diverged. The fundamental reason lies in a changed transmission pathway for inflation and rate expectations. Higher oil prices lift global inflation expectations, which in turn reinforce market bets on additional Fed rate hikes. Rising US Treasury yields then weigh negatively on gold. This forms the current special market dynamic: a “rising oil, falling gold” decoupling trend, the most notable feature in today’s commodity markets.
 

Going forward, global capital will closely monitor three categories of data and events. First, US inflation and employment economic indicators, which directly shape Fed policy expectations and form the core driver for gold prices. Second, developments in the Middle East and shipping conditions in the Strait of Hormuz, which determine the strength of crude’s geopolitical premium and intermittently affect safe-haven demand for gold. Third, progress of the G7 strategic oil reserve release and OPEC+ producers’ compliance with production cuts, which dominate crude supply-demand fundamentals.
 

Overall, volatility across global commodity markets has risen. Both gold and crude oil are news-driven markets without stable unilateral trends; bullish and bearish sentiment shifts rapidly. Geopolitical news and macroeconomic indicators can easily trigger violent intraday swings. Market risk appetite is generally cautious, and capital trading rhythms have clearly accelerated. Investors must continuously track the US Dollar Index, US Treasury yields, speeches by Fed officials and real-time developments in the Middle East to capture phased shifts in strength and weakness across the two assets.