After posting its largest weekly drop since June, gold prices have stabilized as traders weigh persistently high energy costs ahead of the upcoming Federal Reserve policy meeting. Gold fluctuated around $4,000 per ounce after falling more than 4% last week to its lowest level since July.
Over the past month, shifting market expectations regarding the Fed’s interest rate path have heightened uncertainty over gold’s near-term outlook. Initially, stronger-than-expected inflation data led traders to anticipate a rate hike in October, but subsequent comments from central bank officials dampened that expectation.
According to survey results released on Friday, the University of Michigan’s final consumer sentiment index dipped slightly to 48 from 48.1 in September. Consumers expect prices to rise by 4.7% over the next year—up from 4.6% the previous month—and forecast annual inflation of 3.5% over the next five to ten years. Both figures represent the highest levels since May.
Currently, markets assign about a 10% probability to a Fed rate hike at this week’s meeting, while the likelihood of a hike in December now exceeds 70%.
Tech giants with a combined market value exceeding $10 trillion are set to release earnings reports, including major players in artificial intelligence such as Alphabet, Microsoft, and Amazon. All three companies are expected to report double-digit revenue growth for the quarter. However, investors are most focused on how much these firms plan to invest in AI and whether those investments will generate profits.
Traders have also flocked to relatively safe U.S. Treasury markets, pushing the 10-year yield below 5% for the first time in a month. Compounding the challenges, ongoing tensions in Iran and the crucial U.S. midterm elections next week add further uncertainty to the current macroeconomic environment.
“This is a very critical earnings season,” said Kevin Shea, senior equity analyst at Bank of New York Wealth Management. “Markets are digesting growth expectations from large corporations, as uncertainty grows over whether this growth can be sustained.”
“We’re currently in an extremely risk-off mode,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “Investors are selling stocks related to data center capital expenditures, as well as broader tech and data center-related equities.”
Plugin Case Examples
Gold: Prices remain narrowly range-bound around the 4,000 level; a clear momentum signal is needed before considering intraday long positions. Focus on the 4030/35 area. Additionally, liquidity around the 3050/60 zone should be monitored.
(Gold 15-minute chart)
Nasdaq: After breaking below 29,000, the index has begun consolidating. Following a clean sweep of the yellow zone below, look for a potential V-shaped reversal. If the index reclaims 29,200, it could continue rebounding toward 29,400/29,500.
(Nasdaq 15-minute chart)
Crude Oil: Last week saw prices consolidate between 95 and 102. This week focus on the 98–105 range. Watch for liquidity signals around 100.50 during the day—after a pullback, look for bullish signals following the consolidation.
(Crude Oil 15-minute chart)
