Everbright Futures: Bulls and bears battle ahead of the rate decision night, gold short-term volatility intensifies.

Overnight, London spot precious metals fluctuated upward. Last night, Iran's conciliatory remarks pushed oil prices lower; the pullback in oil prices repaired inflation expectations, and the decline in inflation expectations drove long-end yields down, allowing gold prices to complete their recovery of the $4,000 mark. Key focus tonight will be the wording of the FOMC statement and Warsh's press conference, as well as tomorrow's actual core PCE reading. The meeting will most likely keep the interest rate unchanged at 3.75%4.00%; the key lies in the degree to which the policy statement and Warsh's press conference hint at a December rate hike. However, high oil prices and high inflation expectations are offsetting slowing economic growth, leaving Fed policy effectively in a dilemma. This combination provides some support in the medium term for gold's credit-hedge and stagflation-resistant attributes, but before the election window and the December meeting are settled, geopolitical risks are unlikely to generate trend-following buying and are more likely to manifest as pulse-like volatility. Ahead of the major meeting, funds are relatively cautious, and short-term gold volatility may intensify. On the funding side, the world's largest gold ETF, SPDR, reduced holdings by 0.855 tonnes to 1,040.798 tonnes on October 27, then restored 0.855 tonnes to 1,041.653 tonnes on October 28, indicating that the pace of reduction has clearly slowed; World Gold Council data show that global gold ETFs attracted $31 billion in Q3, a record high, with holdings increasing by 67 tonnes to 4,256 tonnes. In addition, attention should be paid to: first, the risk of escalation in the Middle East situation after the midterm electionsif the U.S. side actually uses force, a second oil price shock would restart the tightening narrative and disturb gold prices; second, supply pressure in long-end U.S. Treasuries and whether the strong demand at the 5-year auction can continue; third, whether the liquidity squeeze caused by market sentiment has been fully cleared.