Gold Trades Below $3,975 as US Voters Head to the Polls
Spot gold is trading near $3,926 an ounce and silver near $49.43 as investors await the outcome of the US midterm elections. Cheaper oil eased inflation concerns on Monday, giving bullion some support, Reuters reported.
Gold: The Oil Link Is Still in Charge
Cheaper oil lifted gold out of technically oversold territory on Monday, Reuters said, with the 14-day RSI climbing to about 37 from below 30 on Friday. Friday’s sell-off had been driven partly by margin calls after a rout in tech and AI stocks. A margin call is a demand from a broker for more cash when a leveraged trade loses money, so investors sold gold to raise it.
Independent analyst Nikos Tzabouras linked the rebound to “optimism around a US-Iran diplomatic breakthrough” and “renewed concerns over the viability of the AI boom,” which are adding doubt about “how far the Federal Reserve will need to go with tightening.” He also warned the recovery “may prove short-lived.” Traders still favor a Fed rate hike in December, Reuters reported, based on CME FedWatch, which turns futures prices into rate odds.
That oil relief may already be fading. A reported US strike on Iran’s Qeshm Island put some risk premium back into crude on Tuesday. A US strike on Iran would normally draw safe-haven buying into gold, but this time gold fell. In my view, that shows the oil-to-rate-hike link still matters more than fear: higher oil keeps inflation and Fed hike bets alive, and gold pays no interest, so it suffers when rates are expected to rise.
US data also complicated the picture. The ISM manufacturing index, a monthly survey of factory purchasing managers where readings above 50 signal growth, rose to 55.5 in October from 54.5, beating forecasts. Its production gauge hit 59.0, the highest since November 2021. The prices index eased to 75.2 from 77.9, but a reading that high still means most factories are paying more.
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Beyond the election, “the fiscal backdrop in the US is unlikely to change significantly enough to make a difference for gold,” said Carsten Menke of Julius Baer. Saxo Bank’s Ole Hansen sees liquidity concerns and technical selling overshadowing gold’s longer-term investment appeal for now, Bloomberg reported. He said gold would need to climb back above $4,000 to restore a more neutral short-term outlook.
Silver: India Issues Import Permits
Silver is trading near $49.43 an ounce. On the physical side, Heraeus said India has issued permits for about 6,500 tonnes of silver imports over the next six months, around 90% of what it imported in all of 2025. That could add physical demand over the coming months, although Heraeus noted much of the allocation may go unused if Indian demand stays weak.
Friday’s October jobs report is the next major test for both metals. A strong number would support hike bets and weigh on gold and silver.
Gold Technical Analysis: XAU/USD Rejected Below $3,975 as $3,871 Comes Into Focus
Gold is trading near $3,926 an ounce on the 4-hour chart. Sellers stepped in just below $3,975. That level was a floor, or support, through October and now acts as a ceiling, or resistance. Two falling trendlines, lines connecting the lower highs, still cap every rally.
Below $3,871, the next support is $3,797. Above $3,975, resistance waits at $4,084. RSI, a 0 to 100 gauge of buying and selling strength, is near 40, so sellers still have a slight edge. I stay bearish while gold holds below $3,975. A close below $3,871 would open $3,797, while a move above $3,975 would ease the pressure.
Silver Technical Analysis: XAG/USD Tests $48.85 Support Below $51.27 Resistance
Silver is trading near $49.43 an ounce on the 4-hour chart. Sellers stepped in at $51.27 on Monday. A falling trendline from October 21 has capped every rally.
The first support is $48.85, then $47.06. Resistance is $51.27, then $53.28. RSI is near 31, close to oversold, meaning prices have fallen very fast and a bounce can come at any time. Even so, the bias stays bearish while silver trades below $51.27, and a close below $48.85 would open $47.06.