Gold rises over 1% from one-year low on softer oil prices; US midterms in focus

By Anushree Mukherjee

Nov 2 (Reuters) - Gold prices rose more than 1% on Monday, rebounding from a one-year low hit in the previous session, supported by a retreat in oil prices that tempered inflation worries, while investors awaited US midterm elections later this week.

Spot gold was up 1.74% to $3,942.57 per ounce at 0911 a.m. EDT (1411 GMT), having ended 3.6% lower and hit its lowest since October 2025 on Friday. US gold futures for December delivery gained 1.38% to $3,952.80.

"Weaker oil prices have provided some relief ... in terms of reducing inflation concerns. But the market is still expecting a December rate hike from the Fed, although those odds have lessened a little bit over the last couple of trading sessions," said Peter Grant, vice president and senior metals strategist at Zaner Metals, adding that the dollar was providing a little bit of a tailwind too.USD/

Oil prices fell more than 6% on Monday after Iran and Qatar held a third consecutive day of talks aimed at ending the US-Israeli war on Iran. Lower crude prices eased inflation concerns and reduced expectations that US interest rates would stay higher for longer, boosting the appeal of non-yielding bullion. O/R

Traders see a 76.6% chance of a US rate hike in December, down from 80% a week ago, according to CME Group's FedWatch Tool.

A selloff in technology and artificial intelligence-linked stocks spilled across markets on Friday, as margin calls led to sales of safe-haven assets such as gold, analysts said.

Gold's 14-day Relative Strength Index (RSI), an indicator used to gauge whether an asset is overbought or oversold, rose to about 37 on Monday from below 30 on Friday, indicating the metal had emerged from technically oversold territory.

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

"The fiscal backdrop in the US is unlikely to change significantly enough to make a difference for gold. Deficits should persist no matter the outcome of the midterms, suggesting that the US debt and interest burden should remain a longer-term supportive factor for gold," said Julius Baer analyst Carsten Menke.

Among other metals, spot silver climbed 3.4% to $50.77 after breaking below $50 for the first time since late November 2025 in the last session.

Spot platinum rose 1.04% to $1,446.10 and palladium dropped 0.63% to $970.25, after earlier bouncing from their lowest levels in 13 and 17 months, respectively, on Friday.