Gold Rebounds Above $4,050 as Energy Prices Ease Inflation Fears

Market sentiment remains anchored by the Federal Reserve’s two-day meeting, with futures markets pricing in a 90.6% probability that officials will hold benchmark rates steady at 3.75% to 4.00%. While an October pause is widely expected, the focus has shifted to whether Chair Kevin Warsh will signal a permanent end to the current tightening cycle or leave the door open for further hikes in December. Recent economic indicators, including a sharp rise in October consumer confidence to 91.7 and steady durable goods orders, provide the central bank with a complicated backdrop for its policy pivot.

Energy markets offered support to bullion as diplomatic efforts involving Iran and regional powers eased immediate fears of a major escalation in the Strait of Hormuz. The cooling of crude oil prices—with WTI retreating toward $100 a barrel—helped mitigate fears of energy-driven inflation, even as a firm U.S. dollar acted as a cap on further gains. Meanwhile, equity markets mirrored this cautious optimism, with the Nasdaq Composite leading a broader rally in the technology sector as investors weigh corporate earnings against the restrictive interest rate environment.