Gold rebounds from one-year low as oil slides ahead of US midterms

By Sherin Sans

Nov 2 (Reuters) - Gold prices rebounded on Monday after hitting a one-year low in the previous session, as a drop in oil prices eased some inflation concerns, while investors turned their focus to this week's US midterm elections and their broader impact on fiscal policies.

Spot gold rose 0.7% to $3,900.14 per ounce by 0940 GMT, having ended 3.6% lower and hit its lowest since October 2025 on Friday. US gold futures for December delivery gained 0.3% to $3,909.20.

A sharp selloff in technology and AI stocks triggered a dash for cash and forced investors to liquidate safe-haven assets like gold on Friday, analysts said.

"Optimism around a US-Iran diplomatic breakthrough and renewed concerns over the viability of the AI boom are allowing some doubts to creep in over how far the Fed will need to go with tightening, and that is facilitating a rebound. But the bounce may prove short-lived," said Nikos Tzabouras, an independent financial markets analyst.

Oil prices slipped more than 3% on Monday after Iranian and Qatari officials held a third straight day of talks aimed at pushing for a deal to end the US-Israeli war on Iran. O/R

Lower oil prices can ease inflationary pressures and reduce expectations of interest rates staying higher for longer, lowering the opportunity cost of holding non-yielding bullion.

Attention is now shifting to the November 3 US midterm elections to assess the potential impact on fiscal policy and broader market sentiment.

"Markets are likely to tread carefully into the US midterms, which could mark a turning point for the Middle East conflict, while the tech selloff that forced investors to liquidate gold to cover losses elsewhere could continue to pressure bullion," Tzabouras said.

Among other metals, spot silver climbed 2.5% to $50.35 after breaking below $50 for the first time in 11 months on Friday. Spot platinum nudged up 0.01% to $1,431.07 and palladium gained 0.3% to $979.25 after touching their lowest levels in 13 and 17 months, respectively, on Friday.