Gold Takes Breather After Selloff, Stocks on Edge: Markets Wrap
(Bloomberg) — Gold and silver recovered from their steepest selloffs in years, while stocks trended lower after a rally on Wall Street lost steam.
Gold gained 0.3% after its worst intraday drop in more than a dozen years in the previous session. Silver also rose following Tuesday’s 7.1% fall.
The Euro Stoxx 50 futures dropped 0.4%, while a gauge of Asian equities trimmed an earlier decline to shed 0.1%. The weakness in Asia partially stemmed from selling in precious-metal shares from Australia to Indonesia and China. US futures were a tad higher after the S&P 500 Index closed little changed.
The dollar and Treasuries were largely steady. Oil jumped following a report that the US and India are nearing a trade deal that could see the South Asian nation gradually reducing imports of Russian crude.
“The metals’ selloff looks more like a positioning purge than a macro shock,” said Charu Chanana, chief investment strategist at Saxo Markets. Traders remain on guard for “signs of systematic selling across assets” that could include wider credit spreads and a rising dollar, she added.
The heightened focus on precious metals follows a rapid rally earlier this year that was fueled by central banks-led buying and worries about fiscal woes in developed countries. The slumps also came after technical indicators showed the recent scorching rallies were likely overstretched.
Despite recent de-risking amid concerns over trade and credit, stock exposure among global macro hedge funds and long-only strategies remains at the highest in over a year, according to Barclays Plc.
“Our near-term technical outlook is for equities to consolidate/pull back over the next few weeks,” said Craig Johnson at Piper Sandler. “We view pullbacks as healthy and necessary.”
While the US government shutdown has caused an economic data vacuum, drawdowns in equities have been short-lived as investors see them as opportunities to add risk to their portfolios. The closure has also left commodity traders without one of their most valuable tools: a weekly report from the Commodity Futures Trading Commission that indicates how hedge funds and other money managers are positioned in US gold and silver futures.
“We assume such positioning had built to substantial levels and ultimately triggered the selloff,” ANZ Group Holdings Ltd. analysts Brian Martin and Daniel Hynes said in a note. “Despite this pullback, we still see long-term drivers in place and providing support to prices.”
US Shutdown
The ongoing US government shutdown is on the cusp of becoming the second-longest on record. The shutdown has delayed the publication of official data, including September’s inflation figures which the government plans to release on Friday.
Trade tensions remain in focus, after Donald Trump predicted an upcoming meeting with his Chinese counterpart, Xi Jinping, would yield a “good deal” on trade. However, the US president also conceded that the highly anticipated talks may not happen.
Elsewhere, Japanese Prime Minister Sanae Takaichi has ordered a fresh package of economic measures aimed at easing the burden of inflation on households and companies. Meanwhile, the country’s exports rose for the first time in five months as shipments of chips and electronic parts advanced, while goods destined for the US continued to decline.
In the credit world, Indonesia is planning its first offshore yuan denominated bond sale, adding to a rush of offerings that have pushed dim sum bond issuance to a record high so far this year.
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Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 2:35 p.m. Tokyo time Japan’s Topix rose 0.6% Hong Kong’s Hang Seng fell 0.9% The Shanghai Composite was little changed Euro Stoxx 50 futures fell 0.3% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1615 The Japanese yen was little changed at 151.78 per dollar The offshore yuan was little changed at 7.1259 per dollar Cryptocurrencies
Bitcoin fell 2.5% to $108,050.26 Ether fell 2.6% to $3,855.32 Bonds
The yield on 10-year Treasuries was little changed at 3.96% Japan’s 10-year yield was little changed at 1.650% Australia’s 10-year yield was little changed at 4.11% Commodities
West Texas Intermediate crude rose 1.8% to $58.29 a barrel Spot gold rose 0.2% to $4,134.15 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Hsu.
©2025 Bloomberg L.P.
