September 22 Financial Morning Briefing: United Nations General Assembly Diplomacy Expectations Rise, Gold Price Under Pressure at 4360, US Crude Oil Faces Test at 90 Level

Fxstreet, September 22nd—— In early Asian trading on September 22nd, spot gold was trading near $4,360/oz as the market expects progress in the US-Iran situation during the United Nations General Assembly, coupled with easing inflation fears, putting pressure on gold prices.

On Tuesday (Asia/Beijing time, September 22), during early Asian trading, spot gold was trading near $4,360/oz, as markets anticipated progress in US-Iran relations during the UN General Assembly, inflation concerns receded, and gold prices came under pressure; oil prices slumped nearly 4% on Tuesday, with markets hoping that this week's UN meeting could lead to diplomatic progress in the Iran war, while focus was also on partial restoration of Saudi oil shipments. US crude is now trading near $92.18/barrel, possibly testing the $90/barrel mark intraday.

Key Events to Watch Today

Stock Markets

US equities surged on Monday as AI optimism revived. The Nasdaq soared 2.26% to 27,122.09 points, marking the first record close since June 2nd. The S&P 500 rose 1.49% to 7,764.70, and the Dow Jones Industrial Average climbed 0.71% to 52,048.83.

AMD jumped about 10%, reaching a market cap above $1 trillion for the first time. Intel surged 12.2%, Arm leapt 17%, and the Philadelphia Semiconductor Index advanced 4.3%. Meta spiked 11.4% after Wells Fargo raised its price target. Meanwhile, the US 10-year Treasury yield fell below the 5% threshold, and Brent crude dropped below $100/barrel to the lowest since September 9th, as markets speculated on possible Middle East breakthroughs at this week's UN meeting.

After the Federal Reserve's first rate hike in three years last Wednesday, traders see a 50% probability of another hike next month. At least 10 Fed policymakers are scheduled to speak this week.

Greenland-related US stocks climbed on progress in US-Denmark diplomatic talks, while Paramount Global fell nearly 3% on news that it reached a settlement with California and 12 other states over the $110 billion Warner Bros. Discovery merger. Eight out of eleven S&P 500 sectors advanced, led by Communication Services up 4.16% and Information Technology up 2.4%.

Gold Markets

Gold prices declined on Monday, with spot gold down 0.78% to close at $4,343.70/oz, as expectations for further Fed tightening this year and hawkish signals from other major central banks strengthened the dollar.



The dollar index against six major currencies edged higher, extending last week's over 1% gain after the Fed rate hike, raising the cost of buying gold for holders of other currencies. Jim Wyckoff, market analyst at the US Gold Exchange, said bulls remain concerned over the Fed's tightening, pushing the dollar index to its highest level in over two months last Friday, putting pressure on the precious metals market.

CME's FedWatch tool shows traders currently price an 88% likelihood of a Fed rate hike in December. Gold is traditionally seen as an inflation hedge but is less attractive compared to interest-bearing assets when rates are high.

TD Securities analysts said any short-term weakness in the precious metals market would likely be limited and mainly due to moderate selling by Commodity Trading Advisors (CTAs) and would increasingly be seen as a good buying opportunity for gold.

Spot silver fell 0.35% to close at $66.02/oz, platinum rose 0.3% to $1,805.83/oz, and palladium gained 0.4% to $1,307.33/oz.

Crude Oil Markets

Crude prices fell to a 12-day low on Monday. US oil fell 3.67% to close at $91.97/barrel, while Brent dropped 3.06% to $100.03/barrel, both benchmarks hitting the lowest since September 9, as investors hope that the UN General Assembly this week could lead to diplomatic progress in the Iran conflict, while monitoring partial resumption of Saudi crude shipments.



US President Trump expressed willingness to meet Iranian President Pezeh Kizyan, who is expected to attend the UN General Assembly in New York this week. Al Jazeera reported that Iran has conveyed its conditions to restart negotiations through mediators. Tamas Varga, analyst at PVM Oil Associates, said investors hope this week's peace talks will achieve breakthroughs. Bob Yawger, head of energy futures at Mizuho Securities, stated, "Just days ago, this seemed a very far-fetched idea," and, "This is a step in the right direction."

Middle East conflict continues; the Houthi rebels claim to have attacked facilities in Riyadh and at Saudi Aramco in Yanbu.

Tanker tracking data showed that on Sunday, Saudi Aramco loaded about 14 million barrels of crude onto seven supertankers in the Middle Eastern Gulf. Satellite data shows that over the past six days, Saudi crude shipped through the Strait of Hormuz averaged 2.9 million barrels/day, up from 700,000 barrels/day in August.

Foreign Exchange Markets

The US dollar index climbed 0.2% on Monday, finishing at 100.41. CME FedWatch shows traders see a 55.4% likelihood of the Fed hiking at least 25 basis points in October, up from 43.5% a week ago. Chicago Fed President Austan Goolsbee and St. Louis Fed President Musalem both said further or faster hikes might be needed to counter inflation caused by strong demand and rising energy prices.



USD/JPY rose 0.32% on Monday to close at 157.37 as the Bank of Japan refrained from hawkish signals after last week's rate hike and Japanese markets saw lower liquidity due to a three-day holiday, with investors closely watching for signs of possible Tokyo intervention. Marc Chandler, chief market strategist at Bannockburn Capital Markets, said intervention around the 157 or 157.5 level is unlikely, but the market remains a bit tense.

EUR/USD fell 0.19% to close at 1.1463 as the far-right "Alternative for Germany" won the northeastern state parliament election, delivering the worst regional loss in post-war history for Chancellor Merz’s conservative party.

International News

According to US and several Middle East officials, the Trump administration has proposed injecting $5 billion into a new fund to help Middle Eastern countries rebuild energy infrastructure damaged in the Iran war and reduce their dependence on oil and gas shipments through the Strait of Hormuz. This effectively acknowledges that the seven-month-long conflict has already disrupted the global energy market and destroyed pipelines and refineries in the region, with rebuilding set to be costly. According to Trump's plan, the US will seek matching funds from eight Middle Eastern partner countries—Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, Oman, Iraq, and Jordan—for a total investment fund of $10 billion. The fund will be named "Allied Trust and Construction Partnership" (Pact). US officials say that discussions are ongoing and terms may change. It is not clear when, or if, other countries will join officially.



On the 21st local time, after lengthy negotiations, EU member states agreed to extend sanctions against Russia for three years. According to the agreement, the EU will prolong sanctions against over 3,000 Russian individuals and entities for 36 months while removing two Russian entrepreneurs from the list. The extension is significantly longer than the usual 6 or 12 months. The EU hopes the longer extension will avoid future deadlock due to member disagreements over renewal. (CCTV News)



According to foreign media reports, the UK is close to agreeing to support Saudi military operations against the Houthis. Multiple sources say Prime Minister Burnham is inclined to provide what the UK considers defensive aid and will lobby other countries to take similar measures. Some suggest the UK may offer aerial refueling support to Saudi Arabia. One source noted that Burnham’s government believes assisting the Saudi military to repel the Houthis will help stabilize the region and reduce the threat to Malacca Strait shipping.



Over the past weekend, monitoring showed that Saudi Arabia’s oil shipments in the Persian Gulf rose sharply, the clearest sign yet that after a key transnational pipeline was shut down, the country has shifted exports back to the Strait of Hormuz. According to EU "Sentinel 2" satellite data, supertankers able to carry 14 million barrels were observed near Saudi export terminals on the Gulf coast, the highest since at least June. Earlier this month, Saudi's crucial "east-west pipeline" was attacked and forced to close, and traders are scrambling for information about Saudi crude exports. Previously, Saudi Arabia used the pipeline to bypass the Strait of Hormuz, but after the shutdown, the kingdom has sought to resume crude shipments via the strait.



Latest official data from Iran show that the country's GDP for the quarter from late March to late June fell more than 10% year-on-year. According to media including AFP, the Statistical Center of Iran released economic figures for the country's first Persian calendar quarter (March 21 to June 20) on the 20th. The data showed that during this period, including the oil and gas sector, Iran’s GDP shrank 10.1% year-on-year; excluding oil and gas, GDP was down 4.6%. By sector, oil and gas output dropped the most—down 26.4% year-on-year, while industrial and mining output fell 14.7%. (Xinhua News Agency)



Hossein Mohebbi, spokesperson for Iran’s Islamic Revolutionary Guard Corps, said if the US launches another attack, Iran's armed forces will use new weapons and target new US objectives not previously attacked. Fars News Agency quoted Mohebbi as saying: "Our targets will no longer be what they were before. We now have new targets that we have never attacked." He stressed that changes would include the geographic scope of war, weapons used, and military equipment. "We will introduce new weapons with entirely new capabilities to the battlefield. The world will be shocked."



US retail diesel prices broke above $6.50/gallon for the first time, continuing a war-driven uptrend impacting many economic sectors. AAA data showed that as of Saturday, the national average reached $6.505/gallon, less than ten days after surpassing the $6 threshold. Since September, US diesel prices have surged over 87 cents, rising almost daily and far surpassing the peak set in 2022.

Domestic News

On September 20th local time, the Chinese leader of the China-US economic and trade consultations, Vice Premier He Lifeng, met with US counterparts, Treasury Secretary Bessent and Trade Representative Greer, in New York. Guided by important consensus reached by both heads of state and upholding principles of mutual respect, peaceful coexistence, and win-win cooperation, both sides held frank, in-depth, and constructive exchanges on implementing previous consultation consensuses, promoting bilateral trade and investment, and other key economic and trade topics of mutual concern. They also held discussions on artificial intelligence. (Xinhua News Agency)