The September flash PMI report, showing the highest reading since July 2021, sent shockwaves through global markets. Manufacturing and services sectors both expanded significantly, while input costs hit their highest point in nearly two years. Consequently, the probability of an October rate increase climbed to roughly 70%, up from 53% earlier in the day. The 10-year Treasury yield surged to 5.106%, a level unseen since 2007, placing immense pressure on non-yielding assets like gold and silver.

Risk assets faced broad selling pressure, with the S&P 500 falling 0.8% and the Nasdaq Composite dropping 1.1%. European markets mirrored the decline, weighed down by rising bond yields and a rebound in oil prices. Brent crude climbed above $103 a barrel as investors reassessed supply risks in the Strait of Hormuz, complicating the inflation outlook. For gold, the technical picture remains precarious; bulls must reclaim the $4,369.00 to $4,400.00 resistance zone to regain momentum, while a break below $4,270.00 would likely invite further downside. Traders are now pivoting toward Thursday’s jobless claims and Friday’s consumer sentiment reports for further clarity on the economic trajectory.