Gold and Silver Plunge as Australia Trade Deal Strengthens Optimism for China, Canada: Oct. 21, 2025

Safe-haven demand is falling off a cliff today as optimism regarding trade relations drives the sharpest losses for gold and silver in years. A rare earths agreement between the US and Australia signed yesterday is bolstering confidence that cross-border commerce developments will maintain positive momentum. More goods news could certainly be on the way as anecdotal evidence suggests that US negotiations with Beijing and Ottawa are coming along, and deals with those two governments could be complete in the next few days. But there’s no sign to an end of Washington’s shutdown, which is raising economic slowdown risks, elevating probabilities of Fed rate cuts, and driving gains for Treasuries, with the yield curve sinking in bull-flattening fashion led by duration. On the other hand, however, corporate earnings and accompanied outlooks are signaling a healthy cycle alongside buoyant expectations, and that’s pushing stocks north after equities traded indecisively shortly after the opening bell. The dollar is strengthening. The commodity complex is bearish across the board though, and volatility protection instruments are experiencing lower prices due to offensive positioning amidst investors’ risk-on mindsets.

Fixed-Income Watchers Will Awaken on Friday

September’s Consumer Price Index (CPI) will be released this Friday despite the government shutdown, which is a rare deviation from the Bureau of Labor Statistics not publishing data when Washington is closed. But this time the numbers are needed for the Social Security Administration’s annual cost-of-living adjustments so that correct payment amounts could be delivered to recipients in timely fashion. Meanwhile, fixed-income watchers and US currency traders have been snoring in recent weeks, because their decision making relies heavily on their ability to gauge the temperature of growth, employment and inflation. That’s why they are set to awaken this Friday, as this release is poised to drive a disproportionate influence on Wall Street in light of a lack of other publications. Hot results could certainly take January off the table as far as Fed rate cuts are concerned and motivate some selling in equity and Treasury markets, while a cool print would generate robust advances in both asset classes. Finally, an in-line report is likely to produce a green day; however, figures that meet expectations would also be increasingly subject to the details under the hood.

 International Roundup

Canada Inflation Hotter than Expected

Price pressures in Canada strengthened during September and exceeded expectations with the Consumer Price Index climbing 0.1% month over month (m/m) and 2.4% year over year (y/y) following August’s monthly drop of 0.1% and annual increase of 1.9%, according to Statistics Canada. Economists expected another 0.1% m/m drop and a 2.4% ascent. With the m/m result, the following items and the amount of their changes increased the most:

• Transportation, 0.9%
• Recreation, education and reading, 0.6%
• Food, 0.5%
• Household operations, furnishings and equipment, 0.3%
• Health and personal care, 0.3%
• Alcoholic beverages, tobacco and recreational products, 0.3%

The clothing and footwear category was the only classification to decline, with a drop of 0.6%.

The Core CPI, which excludes items with volatile prices, ascended by 0.2% after recording no change in August. Relative to September 2024, it was up 2.8% compared to the 2.6% print in the preceding month.

Commercial Construction in UK Sinks Further

Third-quarter commercial real estate construction in the UK sank to its lowest level since 2014, according to CoStar. The commercial real estate firm says weakness extends to all three major categories, office, retail and industrial. When measured by the square footage under construction, third-quarter activity was down 21% y/y. High costs of labor and materials along with elevated interest rates, geopolitical uncertainty and vacant building spaces have contributed to the decline in construction.