Hello everyone! Royal Capital has shown remarkable accuracy in predicting the Federal Reserve's decisions and gold price movements. In September, the Fed lowered the federal funds rate target range to 4.75%-5.00%, a significant move since 2020. Fed Chair Powell emphasized that large rate cuts are not the norm and the inflation battle is ongoing. The market saw mixed reactions with stock indexes fluctuating, gold prices retreating after a rise, and the dollar weakening.
 
There are speculations that Powell's rate cut might be to aid the Biden administration in gaining votes. The market has diverse views on this action. In the coming week, Powell and Yellen's speeches will be closely watched for hints on future rate cuts. A softening US PCE could support gold prices. However, excessive speculation on a US recession needs to be cautious as it may differ from the views of the White House and the Fed.
 
The gap between the Federal Reserve's dot plot results and swap market expectations adds to market uncertainty. The swap market's more optimistic view may reflect concerns about a potential US recession.
 
For gold, attention should be on non-US currencies. With no major Fed actions in October, good news could lead to profit-taking in gold prices. Non-US central bank actions will likely influence the dollar. If the Bank of England and the Bank of Japan maintain hawkish stances, it could pressure the dollar and support gold prices.
 
The Japanese Liberal Democratic Party leadership election on September 27 is a major focus. Candidates like Shigeru Ishiba, Sanae Takaichi, and Shinjiro Koizumi have different stances on the yen.
 
Shigeru Ishiba: Has a relatively high support rate among Liberal Democratic Party supporters and leads the "Suigetsu-kai" faction. He is a representative who supports a strong yen.

Sanae Takaichi: Known for her conservative stance. As she is regarded as the ideological successor of Shinzo Abe, she may be inclined to a weaker yen.

Shinjiro Koizumi: Once had a relatively high support rate. As the son of former prime minister Junichiro Koizumi, although regarded as a representative of free currency, due to doubts about his governing ability, the market may speculate that Koizumi is unfavorable for Japan's future economy and is bearish on the yen.
 
The new leader's monetary policy inclination will be crucial. Yen movements, as a major non-US currency, affect gold prices.
 
In the energy sector, the ASEAN Energy Ministers Meeting is significant. Past meetings have had potential impacts on oil prices. With oil prices at a new low this year, this meeting could bring surprises. Attention should be on energy transition initiatives, renewable energy development, and oil reserve trends.
 
Geopolitical tensions, especially in the Middle East, continue to affect global markets. In this US presidential election year, political factors add more uncertainties. Investors are closely watching candidates' policies and their potential economic impacts. Overall, the global financial and energy landscapes are filled with uncertainties and opportunities that require close attention.
 
By Wayne Lai
 
A senior financial practitioner in Hong Kong. He has served well-known financial public relations firms, financial media, and investment banks. Past service targets include Societe Generale, CMC Markets, KVB Kunlun, etc. At the same time, he is a part-time lecturer at colleges and universities, a regular guest of financial media, and an author of financial readings. He has represented Hong Kong to attend world financial forums many times. Currently, he is the research and marketing director of Royal Capital. Over the years, he has won multiple industry awards for service institutions.
 
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