Gold rebounded after a 3.7% decline that drove prices to a one-year low. The recovery remains exposed to the threat of renewed US strikes on Iran and to selling in equity markets.
Gold rebounded after a 3.7% decline in the previous session, which drove prices to a one-year low and resulted in the metal's weakest October performance since 2008. Bullion rose as much as 1.7%, $3,976 an ounce, as investors capitalized on lower price levels.
Iran tensions keep strike risk alive
Oil prices declined for a second consecutive session ahead of Tuesday's U.S. midterm elections. Secretary of State Marco Rubio said President Donald Trump preferred a diplomatic resolution to the conflict with Iran, which raised hopes of a settlement and eased concerns about further energy supply disruptions and inflationary pressures.
However, the threat of renewed military escalation remains. Trump has repeatedly warned that Washington could resume strikes against Iran after the midterm elections, while Tehran has threatened a broader retaliatory response. Reuters cited four unnamed European officials as saying the US has amassed enough forces and military assets in the region to attack Iran at short notice, possibly as soon as this week.
Separately, Iranian President Masoud Pezeshkian said Iran will not surrender in the face of war threats. State media reported that he said Supreme Leader Ayatollah Mojtaba Khamenei has granted "certain authorities" to the government regarding peace talks.
Equity selloff adds pressure on bullion
Gold also remains vulnerable to broader equity-market liquidations. Recent declines in technology shares have prompted investors to sell bullion to cover losses elsewhere in their portfolios. U.S. stocks were poised to extend their declines on Monday, tracking a Wall Street selloff driven by renewed concerns about the artificial intelligence investment trade.
On the daily chart, gold futures opened at $3,907.07 and traded at $3,965.35, trying to hold above key resistance at $3,955.19. The analyst wrote that if futures fail to hold above that level for the next hour, they could lose the day's gain and pierce key support at $3,889.90. A breakdown there could push futures to test the next key support at $3,838 this week.
Source: Investing.com
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