On November 3, international gold prices declined as the rebound from the prior trading session, which had been driven by progress in U.S.-Iran peace talks, failed to carry forward, and the precious metals market once again faced a wave of selling.
As of the time of writing, spot gold was down 0.76% at $3,916.55 per ounce, while U.S. gold futures fell 1.11% to $3,924.79 per ounce. Spot silver dropped more than 3% to $49.12 per ounce, with platinum and palladium declining 1% and 1.6% respectively.
Earlier, spot gold had risen 1.9% on Monday, but it fell 6.8% cumulatively in October, briefly breaking below the $4,000 mark at month-end and touching a one-year low.
U.S. Military Reported to Have Struck Iran's Qeshm Island; Oil Price Rebound Adds Further Uncertainty to Inflation Outlook
Previously, Iranian President Pezeshkian stated that Iran's Supreme Leader had granted the government greater authority to advance peace negotiations, and Trump also indicated that related talks had made progress. Driven by expectations of easing diplomatic tensions, Brent crude oil briefly fell more than 7% on Monday, alleviating market concerns about rising energy prices and inflationary pressures.
However, on November 3, reports emerged that the U.S. military had launched limited military strikes the previous day on Iran's Qeshm Island in the Strait of Hormuz, reigniting market fears of supply disruptions in the Middle East, and international oil prices rebounded accordingly.
The nine-month-long U.S.-Iran conflict has significantly driven up energy prices, intensified global inflationary pressures, and prompted central banks to consider further interest rate hikes. Since gold itself generates no interest income, higher interest rates typically diminish its investment appeal.
With military actions and diplomatic negotiations proceeding simultaneously, energy prices and the future path of interest rates remain highly uncertain.
Tech Stock Selloff Continues to Spill Over into Gold; U.S. Midterm Elections Become Market Focus
Recent declines in technology stocks have also weighed on gold. Last week, AI-related stocks experienced a sharp pullback, with some investors selling gold to offset losses in other portfolio holdings. On Tuesday, Asian tech stocks extended their losses, keeping the precious metals market under continued selling pressure.
Meanwhile, U.S. midterm elections are scheduled for November 3, and the results could influence gold prices during Wednesday's Asian trading session. Investors are watching for potential fiscal policy adjustments arising from changes in the political landscape of Congress, as well as the resulting shifts in inflation and U.S. Treasury yields.
On the technical indicators front, gold's Relative Strength Index (RSI) entered oversold territory last week, indicating that the prior decline had been relatively severe. However, with selling pressure from tech stocks not yet abating, combined with uncertainties surrounding the Middle East military situation and U.S. election results, gold's short-term rebound still faces headwinds.
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