Gold Movement Overview
Gold extended its recovery from a one-year low in early Asian trade on Tuesday. A sharp drop in oil prices eased inflation concerns, and investors awaited the US midterm elections.
Spot gold rose 0.3% to $3,956.32 an ounce as of 08:29 UTC+8 on 3 November 2026. That built on a strong rebound in the previous session, which followed a steep sell-off on Friday.
Key Driver Behind The Move
The main support came from the oil market. Crude prices fell sharply on Monday after Iranian and Qatari officials discussed a deal to end the US-Israeli war with Iran.
Iranian President Masoud Pezeshkian said his government had received greater authority from the country’s supreme leader to pursue peace negotiations. US President Donald Trump indicated progress in the discussions.
Lower energy prices can soften the inflation outlook, which may ease pressure on the Federal Reserve to tighten further.
Market Data And Reaction
Rate-hike expectations remain elevated. Traders were pricing a 77% chance of a Fed rate hike in December on Monday, based on CME FedWatch. That was slightly lower than a week earlier.
Not all analysts are convinced. Independent financial markets analyst Nikos Tzabouras said the bounce “may prove short-lived.”
Broader Market Implications
Gold’s recent weakness has been linked to concerns that higher energy costs would keep inflation sticky and push the Fed towards further tightening. The pullback in oil has eased some of that pressure. However, the peace talks are still in progress, and a renewed outbreak of fighting in the Middle East remains a risk.
The midterm vote adds a separate layer of uncertainty. Investors are watching for possible effects on fiscal policy, geopolitics and market sentiment. Carsten Menke, an analyst at Julius Baer, said the US fiscal backdrop is unlikely to change enough to make a difference for gold.
What Gold Traders Should Watch
- US midterm election results, which could sway gold as early as Wednesday’s Asian session.
- US-Iran peace negotiations, and whether diplomatic progress keeps oil prices contained.
- US October nonfarm payrolls, due on 6 November 2026, for signals on the Fed’s next move.
- The Fed’s December policy decision, where markets are still leaning towards a hike.
