Gold prices rebounded to around 4180, supported by falling oil prices and a reduced likelihood of a Federal Reserve rate hike at the October meeting, following comments from Fed’s vice chairman John Williams.
Middle East crude supply has returned to near pre-conflict levels after Saudi Arabia increased output through key oil pipelines, keeping oil prices under pressure. This move offset earlier gains driven by the standoff in the Strait of Hormuz, which had pushed prices higher earlier this week.
On Tuesday, New York Fed President John Williams said another rate hike later this year might be appropriate, prompting investors to lower their odds of a Fed rate increase at the late-October meeting—just ahead of U.S. midterm elections—from 70% to about 50%.
The dollar index stabilized, posting its best single-month performance since June, as the Fed refocused on curbing inflation, boosting interest rate expectations and U.S. Treasury yields.
“U.S. economic data continues to guide the dollar’s direction,” said Jayati Baldevraj, head of foreign exchange strategy at TD Securities. “Unexpected moves in U.S. data serve as short-term signals for dollar movement and determine whether the Fed can deliver rate hikes as expected by the market.”
Traders are closely watching Friday’s September jobs report, which will test market expectations for aggressive monetary tightening. Additionally, the U.S. will release the August Personal Consumption Expenditures (PCE) price index on Wednesday—the Fed’s preferred inflation gauge.
Plugin Case Examples
Gold: After breaking above 4161 yesterday, the price retraced as expected into the blue zone highlighted by our plugin, then rose back toward 4180. With two major risk data releases—ADP and PCE—today, we recommend staying mostly neutral during daytime trading or considering a defensive liquidity sweep opportunity near 4150.
(Gold 15-minute chart)
Nasdaq: Following yesterday’s breakout above 30325, the index retraced into the blue zone indicated by our plugin before continuing upward to 30460. As long as prices hold above 30250 today, we prioritize direct buy-stop opportunities based on momentum breakouts.
(Nasdaq 15-minute chart)
Crude Oil: Prices dropped sharply overnight, hitting our target of 92. Today, we expect the price to continue moving toward 90 after clearing liquidity around 93.50.
(Crude Oil 15-minute chart)
Key Economic Data and Events Today:
20:15 U.S. September ADP Private Sector Employment
20:30 U.S. August PCE
