Gold Rebounds Toward $4,200 as Market Sentiment Sours

The University of Michigan’s preliminary October consumer sentiment index dipped to 46.3, down from 48.1 in September, while long-run inflation expectations nudged up to 3.5%. This economic backdrop creates a complex environment for the Federal Reserve, as traders currently price in a 19% chance of an October rate hike and an 84% probability of tightening by December. Payroll growth slowed to 29,000 in September, with significant downward revisions for July and August, adding weight to the growth-slowdown narrative.

Energy markets continue to exert pressure on the broader trade, with Brent crude settling at $104.72 and WTI at $91.85. Tensions in the Strait of Hormuz and ongoing supply constraints, exacerbated by Hurricane Isaias, maintain a floor under inflation expectations. While immediate strike fears regarding Iran have subsided, the combination of high oil prices and diesel tightness keeps defensive demand for precious metals alive. Technically, bulls are now eyeing a push back above the $4,225.81 resistance zone, while bears look for a break below $4,183.83 to signal further downside.