Gold closes below $4,000 as oil climbs to its highest since May

Gold fell 0.70% to $3,999.79 on our feed, a close below $4,000, as FXStreet said the oil surge deepened its weekly rout; oil rose to its highest since May, investingLive said. The dollar won back ground against the Swiss franc and the pound, a day after losing to both, and USD/CAD posted a seventh lower close in a row.

What the data showed

• GBP · UK retail sales: −0.4% on the month in September, against a −0.1% forecast. The flash services PMI rose to 53.1 and manufacturing to 52.8, both against 51.8 expected, and Action Forex said the composite reached its highest in eight months.

• EUR · France's flash services PMI fell to 48.4 against 50.7 expected and manufacturing to 49.3 against 50.5, back in contraction, investingLive said. The eurozone composite slowed to 51.9, its lowest in four months, according to Action Forex.

• USD · Flash manufacturing PMI: 56.0 against 55.4, a 53-month high according to FXStreet; investingLive said selling prices rose at the sharpest rate since August 2022.

The havens and Europe

• USD/JPY fell to 156.075 at 00:39 UTC, a five-week low according to FXStreet, after Japan's September headline CPI rose 2.1% on the year, as expected, and 2.4% excluding fresh food and energy, against 2.3% expected. Action Forex said the pair breached 156.36 support but quickly recovered; on our feed it closed up 0.05% at 156.847, a second close below 157.50.

• USD/CHF rose 0.55% to 0.82500, the dollar's biggest gain of the seven, reversing Thursday's losses as the dollar regained ground alongside Treasury yields, FXStreet said.

• EUR/USD fell 0.11% to 1.12031, its third lower close in a row, after a low of 1.11846 at 08:36 UTC; FXStreet said the euro stayed depressed after unimpressive PMIs.

• The pound fell 0.18% to 1.33757. It traded above 1.3400 only in the session's first five hours, and it closed above 1.3341 for a fourth session in a row, with its low of 1.33609 above that line too. Brown Brothers Harriman said the PMI beat supported expectations of a 25 basis-point November Bank of England hike, though it argued swaps were overpricing further tightening.

Gold and oil

• Gold closed at $3,999.79 after a low of $3,975.49 at 14:30 UTC, and FXStreet said it had already slipped to $3,986 in Asian hours, its lowest since July. ING said gold had failed to benefit from Thursday's equity sell-off and lower Treasury yields because the market was focused on higher oil and its inflation implications.

• WTI rose above $100 and then out of the $95–$101 band it had held from Monday to Thursday, to a 22-week high, after what FXStreet described as two days of Houthi attacks in Saudi Arabia and strikes on ships leaving the Strait of Hormuz. Action Forex said Brent rose 2.6% on Thursday and another 1.4% on Friday morning, to its highest since early May. Late in the session, investingLive reported that Trump told a rally the US may do "another operation" against Iran. According to investingLive, the market was betting he would act soon, which was why oil had been so strongly bid.

The loonie and the Aussie

• USD/CAD fell 0.05% to 1.40026, its seventh lower close in a row. It dipped to 1.39684 at 12:56 UTC, below 1.3985, where Action Forex said a firm break would indicate that the rise from 1.3480 had completed, then closed back above 1.4000. FXStreet tied the streak to expectations that the Federal Reserve (Fed) and the Bank of Canada would take different paths next week.

• AUD/USD rose 0.23% to 0.70356, above each of its previous ten closes on our feed, although Australia's flash composite PMI fell to 47.7, its first contraction in five months. FXStreet tied the gains to Reserve Bank of Australia hike expectations. NZD/USD rose 0.31% to 0.57004.

Market gauges and what's next

Our proprietary metrics at the close of the session:

• Readings: an MRS of 74, unchanged. A CTS of 54 with its carry backdrop at 60 out of 100, and an FSI of 58, Neutral, from 57.

• Top of our strength table: the Swiss franc, first for 261 of the session's 1,437 minutes, 18% of them, a clear lead. The franc led on the same day it was the currency that lost the most to the dollar: the table counts minutes in each place, not the session's net move.

• Bottom: no currency clearly trailed.

• The dollar: it closed higher against the franc, the pound, the euro and the yen, and lower against the Canadian, Australian and New Zealand dollars.

• Last week's test: EUR/USD closed between 1.1111 and 1.1276, the two lines our weekly wrap set, in all five sessions of the week, and its low on Friday held more than 73 pips above the lower one. The tell is still open.

Next week: TD Securities expects the Federal Reserve to hold at 4.00% in October. The Bank of Canada decides on Wednesday: RBC sees a 25 basis-point hike as possible and TD Securities expects a hold at 2.25%.