International gold prices have climbed back above the $4,000 mark, gaining $118.25 in a single day and ending a previously sluggish trend.
This gold rebound is the result of multiple factors working together. First, the bottoming-out of the gold price has been confirmed, with a certain level of support forming in the $3,900-$4,000 range. Second, there are signs of repricing on the interest rate side, as the U.S. midterm election results are in, with the Democratic Party retaking both chambers of Congress, and stricter fiscal discipline is expected to help drive gold prices upward. At the same time, fundamental buying in gold remains solid, with global central banks continuing to purchase gold heavily in the third quarter, and official buying that "buys more as prices fall" providing a floor for gold prices.
Previously, gold prices had been steadily declining. Last Friday, London gold briefly fell below the $3,900 threshold, hitting a new low since July, but then quickly recovered its losses and regained a firm footing above $3,900 鈥?the market widely believes there may be some support in the $3,900-$4,000 range. As of 00:36 on November 5, international spot gold on the New York Exchange was quoted at $4,058.651 per ounce, up $118.25 from the previous trading day, a gain of 3.0%, with the gold price once again standing above the $4,000 round-number threshold.
Developments on the interest rate side have also been favorable for gold prices. The results of the U.S. midterm elections are out, with the Democratic Party defeating the Republican Party by an overwhelming margin and seizing control of Congress. The market expects future inflation trends to moderate. The Democratic Party regaining control of both chambers may marginally restore the increasingly unbalanced U.S. fiscal discipline, playing a positive role in alleviating concerns about the fiscal deficit, thereby forming a marginal positive for U.S. Treasuries, and in the process of pushing Treasury yields lower, providing upward support for gold prices.
Meanwhile, U.S. President Trump stated that he has no plans to immediately strike Iran after the midterm elections. On the evening of November 4, international oil prices moved lower during intraday trading. According to Wall Street CN, Brent crude fell 2.0% intraday at 20:29, quoted at $101.48 per barrel; WTI crude fell 3% intraday at 21:59, quoted at $93.21 per barrel. In addition, the U.S. midterm election results may also affect technology stocks by increasing the possibility of action at the state and federal levels to restrict AI construction, which is the most direct channel through which the midterm elections affect AI trading. Taking Texas as an example 鈥?data center developers are seeking to build dozens of AI computing parks in the state 鈥?State Representative James Talarico won the state's first Senate seat for the Democratic Party since 1994, and Gina Hinojosa was elected as the first Democratic governor in more than thirty years. These victories increase the possibility of tighter construction regulation, with Hinojosa repeatedly calling for a moratorium on data center development during the campaign. Texas matters because it accounts for about a quarter of total projected data center construction.
Falling oil prices and a possible slowdown in U.S. AI infrastructure investment may help ease pressure on the Federal Reserve in dealing with inflation, providing momentum for the upside in the gold market. At the same time, an important seller of gold 鈥?global central banks 鈥?continues to buy gold continuously, becoming another important support for gold prices. The World Gold Council released its Q3 2026 "Gold Demand Trends" report. According to the Council's statistics, total global gold demand (including over-the-counter transactions) in the third quarter was 1,369 tons, down 1% year-on-year; the total value of gold demand calculated at transaction prices rose 22% year-on-year to $188 billion. Year-to-date global gold demand totaled 3,881 tons, with demand value rising to $566 billion, a record high. In the third quarter, the gold reserves of global central banks and other official institutions increased by a net 321 tons, up 42% year-on-year, a single-quarter high since the fourth quarter of 2024, and far above the five-year quarterly average. Reserve diversification and risk management remain the core drivers of central bank gold purchases. Year-to-date in 2026, global central banks have purchased a cumulative 675 tons of gold, up 6% year-on-year. Global physical gold ETFs reversed the outflow trend of the second quarter in the third quarter, with total net inflows of 211 tons and inflow value reaching $31 billion, a single-quarter record high. This pushed total global gold ETF holdings up to 4,256 tons, setting a new all-time high.
Domestic brokerage institutions believe that the previous fall of gold below $4,000 was mainly due to rising expectations of a Fed rate hike in December, liquidity squeezes in U.S. Treasuries, and adjustments in precious metals positioning, but continued central bank gold purchases and low-level physical buying provide a buffer on the downside, and the short-term adjustment does not change the medium-to-long-term allocation logic. Overall, gold price volatility around $4,000 has increased, and going forward it is necessary to watch whether the dollar, real U.S. Treasury yields, the Middle East situation, and capital flows form a resonance; if risk sentiment further eases, gold prices may still see choppy back-and-forth movement.
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