U.S.–China Trade Flare-Up and Shutdown Keep Markets on Edge

Daily Market Insights – October 13, 2025, Brought to you by Ultima Markets.

U.S.–China Trade Tensions Back in Focus

Market sentiment turned cautious at the start of the week as U.S.–China trade tensions resurfaced, injecting fresh uncertainty into the global macro landscape.

Last Friday, the Trump Administration announced plans to impose a 100% tariff on Chinese imports starting November 1, escalating the trade dispute between the world’s two largest economies.

In response, Beijing criticized Washington’s move, defending its rare earth export controls as “legitimate” and warning of “corresponding measures” to protect its interests. While no major counter-tariffs have been officially announced yet, markets are bracing for potential retaliation ahead of the implementation deadline.

This renewed friction has weighed on risk sentiment, supporting safe-haven demand in gold, while putting pressure on global equity markets and the U.S. dollar. On Friday, the three major U.S. indices and Chinese stock markets closed lower, while the dollar ended its four-day winning streak.

U.S. Shutdown Continues — CPI Postponed to October 24

Adding to market uncertainty, the U.S. government shutdown continues with no resolution in sight. With the Senate closed until Tuesday, no significant progress is expected early this week.

The shutdown has created a void in U.S. economic data releases, leaving markets with limited macro visibility at a time when Fed officials remain divided on the policy path.

According to the Bureau of Labor Statistics (BLS), the CPI inflation report has been postponed to Friday, October 24, from its original release date of October 15. With no key data scheduled this week, headline risk and geopolitical developments are expected to drive market sentiment and volatility.

US Dollar Index: Remain Indecisive

This week, the U.S. dollar is expected to be driven largely by risk sentiment, particularly surrounding the ongoing U.S. government shutdown and the escalating U.S.–China trade tensions.

USDX, Daily Chart | Source: Ultima Market MT5

Despite a sharp pullback late last week, the dollar remains firmly above the 98.50 breakout zone, allowing it to sustain its recent upward momentum. From a technical perspective, the bullish reversal structure remains intact as long as the index holds above 98.50.

Still, upside conviction is fragile, as trade uncertainty and the prolonged US Shutdown could weigh on the greenback and introduce short-term volatility.

Gold: Another Record High?

Gold briefly consolidated below the $4,000 level after last week’s sharp rejection from its record high of $4,059, but quickly regained its footing above $4,000 as market sentiment turned sour again amid trade and geopolitical risks.

Technically, the $4,000 zone now acts as a critical pivot for near-term direction.

XAU/USD, H4 | Source: Ultima Market MT5

A sustained hold above the $4,000–$3,995 support zone would keep gold’s uptrend structure intact, with prices now hovering close to the record high once again. A decisive breakout could set the stage for another rally, potentially extending gains to new highs.

However, if gold fails to hold above this key level, price action may remain in consolidation, with $4,056 (record high), $4,000–$3,995, and $3,945 standing out as critical levels to watch in the short term.

U.S. Shutdown, Trade and Geopolitical Risks

For now, the U.S. government shutdown, the re-escalation of U.S.–China trade tensions, and lingering geopolitical risks in the Middle East and Russia–Ukraine are expected to dominate market sentiment, not only on this quiet Monday but likely throughout the week.

These overlapping uncertainties are keeping risk appetite muted, supporting safe-haven demand while limiting upside momentum in risk assets.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.