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

Gold prices rebounded from a one-year low on Monday 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 0.6% to $3,899.29 per ounce by 1101 GMT. It had slumped 3.6% to its lowest since October 2025 on Friday after a sharp selloff in technology and AI stocks triggered a dash for cash, analysts said. US gold futures for December delivery were up 0.3% at $3,908.70. "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 Federal Reserve will need to go with tightening, and that is facilitating a rebound," said Nikos Tzabouras, an independent financial markets analyst. "But the bounce may prove short-lived." Oil fell more than 4% on Monday as talks between Iranian and Qatari officials on a deal to end the US-Israeli war on Iran raised hopes that Middle East supply disruptions could ease. 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, geopolitics 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 2.3% to $50.24 after breaking below $50 for the first time since late November 2025 in the last session. Spot platinum was up 0.2% to $1,437.15 and palladium gained 0.3% to $979.00 after touching their lowest levels in 13 and 17 months, respectively, on Friday.