HG MARKETS: 

Gold prices recovered modestly at the start of the US midterm election week, trading near $3,900 per ounce after suffering a decline of more than 3% during the previous week. The rebound reflects easing pressure from energy markets and renewed investor interest in safe-haven assets.

Crude oil prices came under significant pressure following renewed hopes of diplomatic engagement between the United States and Iran. Washington has indicated a preference for resolving tensions through diplomacy rather than resuming military operations, reducing concerns about prolonged disruptions to global energy supplies.

 WTI crude oil declined approximately 2% towards $100 per barrel after retreating from its recent five-month high of $104. Lower oil prices could help moderate inflation expectations, reducing concerns that major central banks may need to maintain restrictive monetary policies for an extended period.

 This development is potentially supportive for gold, as easing inflationary pressures may reduce expectations of higher interest rates. Since gold does not offer interest income, lower borrowing costs generally improve its attractiveness compared with interest-bearing assets.

 Investors are now closely monitoring the US midterm elections, which could influence the US dollar and broader financial market sentiment. Political uncertainty, concerns surrounding government policies, and potential fiscal disagreements may increase demand for defensive assets, including gold.

Attention is also shifting towards important US employment indicators, particularly the Nonfarm Payrolls (NFP) report scheduled for Friday. Before its release, investors will assess September JOLTS Job Openings and October ADP Employment Change data for further clues about labour-market conditions and the Federal Reserve’s interest rate outlook.

Gold remains under bearish pressure, trading below its descending trendline and facing resistance near $3,941. The RSI at 32.88 indicates near-oversold conditions, while the negative MACD confirms continued bearish momentum. A sustained break below $3,906 could expose the $3,845 support, whereas a recovery above $3,941 may trigger a short-term rebound towards $4,020.