Breakout Triggers Define the Bullish Case

A move above the 20-day moving average would provide an initial sign of strength and could attract additional bullish momentum. However, a decisive advance above the recent lower swing high of $4,226 is needed to trigger a bullish reversal signal in the daily trend structure. Another earlier sign of strength would be seen on a rise above this week’s high of $4,217, as a rise above it would signal renewed strength in the weekly advance. A sustained move above the relevant swing high would also reinforce the potential for a new advance from the $4,066 support area, following the initial recovery from the early-August consolidation low.

ABCD Pattern Points Toward $4,821

An upside breakout would open the way toward a measured-move target near $4,821 (D), projected by the rising ABCD pattern on the chart. Price symmetry for the two upswings converges at that level, making it a potential resistance zone. A decisive breakout above this target, however, would signal continued strength and expose the next upside resistance zone. Until gold clears those near-term resistance levels, the ability to hold support above $4,066 remains central to the potential recovery.

Iran continues to attack vessels in the Strait of Hormuz. The country is not ready for serious discussions on its nuclear program, which was the key reason for the military operation against Iran. In turn, the U.S. is not ready for concessions and continues to put maximum economic pressure on Iran, using sanctions and  naval blockade.

It looks that both sides of the conflict see escalation as a way out of the current situation. I’d note that Iran may strike oil facilities in the region in case the U.S. resumes the military operation, which is the key threat for oil markets.

Warsh said broader economic conditions were in line with expectations set at the Fed’s September rate increase. He acknowledged persistent price pressure and higher global prices, but he did not give traders a signal on the October 28 meeting.

That changed the short-term rate trade. The probability of an October increase fell from around 27% to roughly 15% after his remarks. The U.S. dollar slipped against a basket of major currencies, while S&P 500 futures moved higher.

Gold got a lift from that shift because a weaker dollar makes bullion cheaper for overseas buyers. But Warsh did not remove the Fed from the trade. He only refused to make October the decision.

At 05:54 GMT, Spot Gold is trading $4,173.76, up $3.06 or +0.07%. December Comex Gold is trading $4,194.40, up $24.30 or +0.58%.

Winter Baseline

The EIA’s October 6 Short-Term Energy Outlook supplies a separate winter baseline. It projects end-of-October inventories around 3,850 billion cubic feet, roughly 2% above the 5-year average. This model assumes winter heating degree days near last winter’s national level, and inputs were closed October 1. Later weather and operational developments therefore require further assessment.

Supply Growth

Supply growth and export demand remain a competing structural influence, with the EIA forecasting U.S. dry production averaging 112.2 billion cubic feet daily in 2026 and 116.3 billion cubic feet daily in 2027, while LNG exports average 17.6 and 18.6 billion cubic feet daily. These are annual projections, not current daily production or terminal feed gas measurements. Sustained production growth would create more room to accommodate exports and domestic demand. However, a forecast of additional supply is less useful for near-term pricing than evidence that gas is actually being produced or delivered. The distinction applies to LNG capacity, capability, and realized demand on the pipeline system; they are different issues.

The GBPJPY pair renewed its bullish corrective attempts, taking advantage of its repeated stability above the additional support level at 208.10, alongside the positive momentum provided by the Stochastic indicator. The pair is currently trading near its previously anticipated target at 210.40.

Note that the current divergence among the main indicators may push the price into mixed sideways trading, with a possibility of forming bearish waves that could target 209.60 and 209.00. However, a successful break above 210.40 and stability above this level would enable the pair to resume its corrective advance and attempt to test the main resistance barrier near 211.20.

The expected trading range for today is between 209.00 and 210.55.

Trend forecast: Sideways

Higher-than-expected PPI report did not have any impact on the Treasury market today as traders rushed to buy safe-haven bonds amid AI uncertainty. PPI increased by +1.3% month-over-month in September, highlighting growing inflationary pressure.

FedWatch Tool indicates that the probability for a rate hike at the next Fed meeting in October declined to 29.3%. Traders believe that Fed will not raise rates despite inflation data. The falling probability of a rate hike provided additional support to gold markets.

U.S. dollar pulled back against a broad basket of currencies as traders reacted to the rally in U.S. bond markets. Weaker dollar served as an additional positive catalyst for gold.

Currently, gold is trying to settle back above the resistance level at $4160 – $4180. In case gold manages to settle above the $4180 level, it will head towards the resistance, which is located in the $4300 – $4320 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.