Gold Rebounds From One-Year Low as Oil Falls, a Day Before the Midterms

Gold bounced on Monday, Nov. 2, but it is still deep in a hole.

Spot gold was up 1.74% at $3,942.57 an ounce at 9:11 a.m. EDT, according to Reuters market data. That follows a 3.6% drop on Friday that took the metal to its lowest since October 2025. December futures gained 1.38% to $3,952.80.

The metal started 2026 with a run to a record above $5,500 an ounce. It now trades below $4,000, roughly 28% under that peak, and is down about 8% to 10% for the year depending on the measure used.

What moved gold on Monday

Oil did most of the work. Crude fell more than 6% after Iran and Qatar held a third straight day of talks aimed at ending the US-Israeli war on Iran.

Cheaper oil eased inflation worries. That cut expectations that U.S. interest rates stay high, which helps gold because bullion pays no yield.

"Weaker oil prices have provided some relief... in terms of reducing inflation concerns," said Peter Grant, vice president and senior metals strategist at Zaner Metals. He added that the market still expects a December Fed rate hike, though the odds have slipped.

CME Group's FedWatch tool put the chance of a December hike at 76.6%, down from 80% a week earlier. The Fed held rates at 3.75% to 4% in October, with two members voting for a hike.

Gold's 14-day Relative Strength Index climbed to about 37 from below 30 on Friday, which means the metal is no longer in technically oversold territory.

Friday's tech rout dragged gold down

Gold fell last week alongside stocks, not against them. Analysts told Reuters that margin calls during Friday's technology and AI-linked selloff forced sales of safe-haven assets, gold included.

The Nasdaq Composite dropped 2.86% on Friday, its steepest daily decline since June 5. October's loss came to 5.30%, the worst month since March 2025. The Philadelphia Semiconductor Index fell 7.2% on Friday and more than 15% for the month.

"AI is playing an increasingly influential role in gold trading, making it easier for selling to trigger further selling," said Jeff Toshima, a former Tokyo director of the World Gold Council and a Nikkei columnist.

Silver fell harder. It reached $120 at the start of the year and ended last week at $49.13, its lowest in 11 months, according to BullionVault. It rebounded to $50.77 in Reuters data on Monday morning. Indian MCX silver futures dropped nearly 20% in October, versus about 7% for gold.

The midterm question

Gold is heading for its worst annual loss in more than a decade, and investors are weighing whether a shift in Washington could restore its appeal as a haven, Bloomberg reported.

The record is mixed before the vote. BullionVault found no consistent pattern in gold across the 40 trading sessions before the last four midterms: it rose twice and fell twice. This time gold lost 11.0% over the eight weeks before Tuesday, the steepest pre-midterm drop in the five cycles it charted.

After the vote, the pattern is cleaner. Gold rose over the following 40 sessions every time: 2.8% after 2010, 0.5% after 2014, 3.9% after 2018 and 11.9% after 2022. That is four data points.

Not everyone expects the election to matter. Julius Baer analyst Carsten Menke said the U.S. fiscal backdrop "is unlikely to change significantly enough to make a difference for gold." Deficits should persist whatever the outcome, he said, leaving the debt and interest burden as a longer-term support for the metal.

Polls point to Democrats winning the House, while the Senate remains too close to call, according to BullionVault. Overall control of Congress could take days to settle if key races are tight.

The campaign backdrop

Prices and the war are central to the closing pitches. At a Wednesday rally in Georgia for Senate candidate Jon Ossoff and gubernatorial candidate Keisha Lance Bottoms, former President Barack Obama said the administration was prioritizing distractions over inflation. He also said tariffs were contributing to higher costs for families.

"He is literally doing arts and crafts while we are fighting a war and trying to deal with out of control prices," Obama said, referring to White House renovations.

President Donald Trump, speaking at a rally in Ohio that night, defended the renovations. He called the White House "the number one symbol of our country" and said it needed repairs. He also pointed to Obama's record campaigning for Hillary Clinton and Kamala Harris, who both lost to Trump.

What comes next

Results from Tuesday's voting begin arriving late Tuesday evening, with more due overnight into Wednesday.

The larger test for gold may be the Fed's December meeting. With a hike priced at roughly three-in-four odds, and oil and war headlines swinging inflation expectations, the open question is whether the post-midterm gains seen in 2010, 2014, 2018 and 2022 can repeat in a year when rates, not politics, have driven the metal.