Weekend Reading
Good Morning,
Happy Sunday, here is a quick weekend reading edition you can read while enjoying your morning coffee!
The Current Push for Metals in the USA
The U.S. metals sector is undergoing a seismic transition driven by national security and industrial policy. In September, domestic raw steel production reached 1,749,000 net tons, reflecting a 5.9% year-over-year increase and a capacity utilization rate of 77.2%. However, this robust supply-side effort is met with volatile demand: ferrous scrap prices, for instance, are down 3.6% month-on-month, largely due to declining mill demand and macroeconomic headwinds. Meanwhile, U.S. steel imports have fallen nearly 32% in 2025, intensifying efforts to bolster self-sufficiency in metals critical for defense and energy.
Policy momentum also centers on rare earths, critical for clean energy and defense technologies, as the U.S. accelerates investment in mining and processing projects. The government’s latest contracts and incentives signal a strategic pivot from dependence on Chinese imports toward a homegrown mining-to-manufacturing ecosystem. This drive is likely to be a key legacy of the current administration, with industry observers noting the extraordinary alignment between regulatory, fiscal, and industrial trends in the metals space.
The Rise of Gold Price
Gold’s climb in October 2025 is unprecedented: spot prices hit an all-time high of $4,059 per ounce on October 8, with gold up more than 50% year-to-date and nearly 100% since early 2024. Over the past month alone, gold gained 10.56%. These gains eclipse the 2008-2011 run post-financial crisis and stand out for sheer trading volume, with CME Group metals futures volumes breaking all-time daily records on October 9. Macro drivers include surging central bank purchases, persistent inflation (core CPI running nearly double Fed targets), and a sharp shift in investor sentiment toward hard assets as the U.S. dollar continues its longer-term structural weakening.
Heightened global risks, such as banking turmoil and geopolitical instability, have made gold the safe-haven asset of choice. Notably, technical patterns underpin the rally: a multi-year ascending triangle breakout in September triggered the current move, with the $4,000-to-$4,300 range viewed as a likely band for further price action this quarter. Analyst consensus suggests that, absent a major macro reversal, gold could maintain or even extend these gains into 2026 as fiscal and political uncertainty persists around the globe.
U.S. Policy, Growth, and Fed Cuts
While the U.S. economy entered Q4 2025 with respectable momentum, cracks are appearing beneath the surface. GDP growth is expected to slow to just 1.0–1.5% this quarter, following above-trend expansion in 2024, as consumer spending growth has moderated and housing activity softened despite substantial AI-driven capital expenditure. The labor market remains resilient by historical standards, but new job creation has plateaued, and real disposable incomes are at cyclical lows, thanks in part to resumed student loan payments and higher borrowing costs.
On the policy front, the Federal Reserve’s recent cut to a 4.00–4.25% target rate seeks to balance sluggish growth against inflation that remains stubbornly above the 2% mark. Fiscal maneuvering, including renewed tariffs, has added to cost pressures and created a highly segmented sentiment landscape: while business AI investment is surging and fueling growth (adding 0.8 percentage points to GDP), consumer confidence is wavering, and market watchers are divided on the near-term outlook. As a result, expectations for further rate cuts remain, but the scope and timing will hinge on labor market data and the evolving inflation trajectory in the months ahead.