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.

Higher Targets Depend on Breakout Confirmation

For now, a confirmed breakout above $3.396 and then $3.41, could see the 127.2% Fibonacci ABCD projection reached at $3.548. But the first more significance level is defined by the 127.2% Fibonacci extension of the prior decline near $3.61. A key concern now will be the characteristics of further consolidation or weakness before a new high breakout signals, if that is what occurs.

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Gold (XAU/USD) is currently trading at $4,133.61, after a bounce from the $4,073.63 area on the 2-hour time frame. I like to draw your attention to the fact that the price bounce has taken gold above the $4,107-$4,128 area, but is still below a descending trend line and a resistance area formed by the moving averages. Thus, the overall bearish trend is still intact, despite the current bounce.The first area of interest on the upside is at $4,161.46, above which $4,181.44 and $4,216.96 would come into play. On the other hand, the first support comes in at $4,127.56, below which $4,107.28, $4,088.10, and $4,073.63 would come into focus.

Wednesday’s high came before the number. A build near 73 Bcf gives buyers another shot at the market. A print near 77 Bcf leaves room for the sellers who hit the market late Wednesday.

Warm Weather Comes Back Next Week

Highs in the 80s and 90s are running from East Texas to the Mid-Atlantic Coast Thursday. A cold system is crossing the Midwest with highs in the 40s and 50s. It reaches the Great Lakes and Northeast this weekend, with lows in the teens to 30s.

NatGasWeather sees moderate demand from Friday through Sunday, then low demand next week. The Commodity Weather Group sees above-average temperatures spreading across the central third of the country from October 19 through October 23.

The cold is in the forecast. So is the warmth behind it.

LNG and TCO Are Holding the Bullish Side Together

Estimated LNG net flows to U.S. export terminals were 19.7 Bcf per day Wednesday, up 9.6% from the prior week, according to BNEF. European gas storage was 74% full as of October 12, compared with the five-year seasonal average of 89%.

The TCO pipeline outage has also put future storage builds back on the board. LNG demand, lower European storage and the outage are the three supply-side issues traders are carrying into the EIA report.

Lower-48 dry gas production was 111.2 Bcf per day Wednesday, up 2.9% from a year ago, according to BNEF. Lower-48 gas demand was 72.7 Bcf per day, up 3.8% from a year ago.

Production Is Not Getting Out of the Way

LNG is making the dips harder to sell, but the market is not short gas. The EIA still sees end-of-October storage at 3,985 Bcf, the highest level in 10 years and 5% above the five-year average. It also raised its 2027 dry gas production forecast to 116.0 Bcf per day from 115.3 Bcf per day.

Last week’s 85 Bcf build was a little above the 82 Bcf estimate, but still below the five-year average of 96 Bcf. Inventories are 2.0% above the seasonal average and 3.9% below last year. That is not a supply squeeze.

Baker Hughes took one gas rig out of the count, leaving 132. That is down from 135 two weeks ago. Meanwhile, Lower-48 output is running at 111.2 Bcf per day. One rig is not going to change that story.

What to Watch

The storage report is the first real answer after Wednesday’s break. A light injection gives the buyers another reason to stay with LNG demand and the TCO outage. A larger build brings the warm weather trade right back into the market. Next week is the harder problem. Demand fades, the central United States stays warm and production remains heavy.

Wednesday’s reversal top is still sitting on the chart. The main trend held up, but buyers have to take out Wednesday’s high to dismiss the reversal. Sellers need a break under Wednesday’s low to prove it. Until then, neither side has finished the job.

More Information in our Economic Calendar.

The GBPJPY pair remains stable below 210.40 level, forcing it to form some negative trading, approaching 208.10 support, to settle above it to confirm the previously suggested bullish trend.

The price needs a new bullish momentum, to surpass 209.45 level, then repeating the pressure on 210.40 level to find an exit for recording extra gains that might extend to 211.20.

The expected trading range for today is between 208.20 and 210.40

Trend forecast: Bullish

Platinum price kept forming strong negative trading, due to the stability below the extra barrier at $1740.00, holding near the second negative target by reaching $1595.00 level.

Stochastic attempt to settle near 20 level might increase the negative pressures on the price, to motivate it to resume the negative trend, to target $1555.00 level soon, then monitor its behavior due to the importance of this obstacle for detecting the expected trend in the upcoming trading.

The expected trading range for today is between $1555.00 and $1635.00

Trend forecast: Bearish