Gold and silver recover somewhat from Friday's drops

OUTSIDE MARKET DEVELOPMENTS: Markets begin the week with a tentative rebound from last week’s tech-driven sell-off as investors brace for two pivotal catalysts that could set the tone for the rest of the year: Tuesday’s U.S. midterm elections and the upcoming jobs report. With control of Congress hanging in the balance and fresh labor-market data expected to shape Fed expectations, the week ahead promises heightened volatility as traders weigh political outcomes against economic resilience.

If Democrats take only the House, they gain powerful oversight tools – committee chairs, subpoenas, and investigations into the administration – while also complicating the passage of spending bills and forcing more negotiations on appropriations. However, President Trump would retain the ability to advance most of his agenda through the Republican-controlled Senate and his veto power.

Prediction markets put the probability of Democrats winning both chambers at ~74%. If that happens, the constraints on the Trump administration tighten significantly: new legislation becomes far harder to pass, judicial and executive nominations are likely to be blocked, funding for key priorities can be restricted, and Trump is left relying almost entirely on executive actions amid sustained Democratic investigations and gridlock.

Michael Hartnett of Bank of America warns that a Democratic sweep would mark “an electoral shift from populist capitalism to populist socialism,” with U.S. stocks potentially falling more than 10%. Hartnett and others fear a Democrat-controlled Congress could throttle AI and data-center investment, weighing on economic growth. However, historically, the S&P 500 has risen in the 12 months after every midterm since the post-World War II era, and the removal of election uncertainty itself often supports markets.

Oil prices dropped more than 6% on Monday as renewed diplomatic efforts between Iranian and Qatari officials raised hopes of progress toward ending the Iran conflict. The talks, including circulation of a draft proposal, eased immediate concerns over further Middle East supply disruptions, particularly through the Strait of Hormuz. Brent crude fell to an eleven-session low below $109, and WTI probed below $100, reversing some of the recent gains that had pushed prices to six-month highs amid fears of post-midterm escalation.

The probability of a Fed rate hike in December has rebounded to 76.8%, versus 70.7% on Friday, 72.8% a week ago, and 67.3% a month ago. The October jobs report on Friday will hopefully provide some clarity going into year-end after the Fed delivered a hawkish hold last week. The market is expecting a NFP increase of 65k and a steady jobless rate of 4.2%.


GOLD

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$25.83 (+0.67%)
5-Day Change: -$109.85 (-2.73%)
YTD Range: $3,870.47 - $5,595.02
52-Week Range: $3,870.47 - $5,595.02
Weighted Alpha: -9.59

Gold is recovering from Friday's sharp drop to new lows for the year, helped by the retreat in oil, an easier dollar, and perhaps some bargain hunting. The yellow metal remains confined to Friday's range thus far, and that may be the case through tomorrow's session, awaiting the outcome of the midterms. 



Considerable technical damage was done last week, and the downside remains vulnerable at this point. Fresh lows for the year below $3,870.47 would suggest potential to the $3,800 zone, with potential to the $3.741.31 Fibonacci projection. Below the latter, the halfway-back point of the post-COVID rally at $3,605.58 would attract.

However, longer-term bullish projections prevail. A late-October Reuters poll slightly trimmed the 2026 average forecast to $4,495 while lifting the 2027 median to $4,650, and major banks such as UBS, Goldman Sachs, and others have largely held firm on targets of $5,000–$5,400 by mid-to-late 2027. Most view the roughly 30% retreat from January’s record as a healthy correction and accumulation opportunity, supported by ongoing central-bank buying and structural demand, rather than a signal of a sustained bear market.

A rebound above $4,000 would provide some mild encouragement for the bull camp, shifting focus to the declining 20-day moving average at $4,090.52. A close above the 20-day would suggest potential for renewed probes above $4,200. Those October highs above $4,200 are now reinforced by the declining 100- and 50-day moving averages.


SILVER

OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$0.996 (+2.03%)
5-Day Change: -$3.862 (-7.15%)
YTD Range: $48.871 - $121.630
52-Week Range: $46.885 - $121.630
Weighted Alpha: -15.84

Silver has rebounded more than 3% to start the week, buoyed by a drop in oil prices and a softer dollar. However, gains at this point must be viewed as corrective within the recently reestablished downtrend.



Tomorrow's midterms could intensify headwinds for silver and industrial metals if Democrats gain control of Congress.  This may increase scrutiny and constraints on AI data-center expansion, tempering demand for copper, aluminum, and related metals. Silver faces milder indirect effects via slower tech demand, plus sensitivity to fiscal gridlock and rates.

Silver's dual role as a precious and industrial metal may provide some cushioning, along with the persistent supply imbalance. Long-term drivers of demand like electrification will remain intact, where a divided government is mainly seen as creating uncertainty rather than major disruption.

Today's early U.S. low at $49.926 marks initial support, protecting Friday's low at $48.871. Below the latter, there's a minor chart point at $48.643 (21-Nov'25 low). More substantial support is provided by the low end of the bear channel, just below $45, and the 161.8% retracement level of the summer rally at $44.689.

Today's early U.S. high at $51.258 now protects Friday's high at $52.224. Penetration of the latter would bode well for short-term attacks on the series of daily highs above $54. However, the declining 20-day moving average at $56.328 must be regained on a close basis to ease pressure on the downside.


Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com

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