Gold Holds at $3,950 After Strongest Jump in Two Months

Gold held steady after its strongest jump in two months. On Monday, the precious metal rose by 1.9% to approximately $3,950 per ounce, and on Tuesday it traded without significant changes: the spot price was $3,944.23 per ounce at 10:22 Singapore time. Oil stabilized after falling more than 7% on Monday.

The reason is hopes for a breakthrough in US-Iran negotiations. The Iranian president stated that the supreme leader has given the government more authority for negotiations, and US President Donald Trump hinted at progress. The Middle East conflict has been ongoing for nine months: it has driven up energy prices and inflation, forcing central banks to raise rates, which is negative for gold as it does not yield interest.

Why gold is vulnerable

In October, the metal fell by 6.8%, confidently breaking the $4,000 threshold and reaching a yearly low. Last week, it was caught in an AI asset sell-off: investors sold gold to cover losses elsewhere. This left the metal vulnerable to further declines – on Tuesday, Asian tech stocks were bracing for more losses following the deepening sell-off of American chipmakers.

On Tuesday, the US is holding midterm elections. According to Noah Holdings, it is important for gold how the result will affect the fiscal picture. The metal is sensitive to US Treasury interventions in the bond market, the government's reliance on short-term debt, and the Fed's ability to maintain short-term rates, as stated in the company's investment division commentary. Whether the election results will affect these scenarios could indirectly influence the price of gold.

Other metals

Silver fell by 0.8% to $50.23 after rising more than 3% on Monday. Platinum rose slightly, while palladium decreased slightly. The Bloomberg Dollar Index was stable after falling 0.3% over the previous two sessions.