On Wednesday, November 4, London spot gold and silver spiked higher overnight before pulling back. Geopolitical signals were dense but pointed in a consistent direction, with tensions in the Middle East cooling for now, while crude oil first fell and then rebounded.
On the political front, vote counting for the midterm elections is underway. Before tonight's ADP report, ISM non-manufacturing data and Friday's nonfarm payrolls are released, gold prices are expected to remain in a narrow trading range as midterm election vote counting progresses.
On the macroeconomic side, US September JOLTS job openings rose to 7.523 million, above the expected 7.164 million, while layoffs and discharges fell to their lowest level since March 2025, underscoring continued resilience in the labor market.
On the geopolitical front, Iran stated that the US must fully respond to the seven conditions proposed by Iran and implement them before the Strait of Hormuz can be opened; Trump acknowledged launching a small-scale attack.
On central bank gold buying, World Gold Council data showed that global central banks made net gold purchases of 321 tonnes in the third quarter, up 42% year-on-year. Oil prices continued to decline, and through the "oil price - inflation - interest rate" transmission chain, market risk aversion weakened.
In addition, midterm election voting is underway, and US stocks have rebounded after a pullback, with attention on whether market sentiment can continue to recover.
In my view, if Middle East geopolitical tensions continue to ease as expected, combined with the conclusion of the midterm elections and the December rate path, gold prices are likely to bottom out and rebound. First, the uncertainty of election results itself will bring a temporary safe-haven premium. Second, the market has already priced in the December rate path to some extent, but the rebound is more based on a repair of risk premium, making it a pulse-like move with potentially limited upside.
Meanwhile, the World Gold Council said on November 3 that weaker gold prices in the third quarter may have prompted some central banks to increase purchases, and the rebound in the US dollar also pushed some central banks to convert foreign exchange reserves into gold, leading it to raise its full-year central bank gold purchase forecast.
Author: Li Qi
Qualification: F3046227
Trading Advisory Qualification: Z0016145
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