Gold and silver rebound post-midterms, helped by lower yields, dollar, and oil
OUTSIDE MARKET DEVELOPMENTS: U.S. markets awoke to a decisive political shift as Democrats secured control of both the House and Senate in the midterm elections. The result has weakened the dollar, pulled Treasury yields lower, lifted gold above $4,000, and sparked a rally in stocks.
The Democrat takeover of Congress is weighing on the dollar amid expectations of political gridlock and tighter regulation, especially around AI and data centers. Investors now expect less fiscal stimulus and a potential slowdown in the AI-driven investment boom that has attracted large foreign capital inflows into U.S. assets. That shift is prompting lower Treasury yields and reduced demand for the greenback.
Oil prices are lower as traders dial back the geopolitical risk premium on hopes of progress in U.S.-Iran peace talks mediated by Qatar, alongside potential talks between Russia and Ukraine. Mixed diplomatic signals and some recovery in Middle East crude flows have outweighed tighter U.S. inventory data, keeping downward pressure on crude even as supply risks in the Strait of Hormuz persist.
U.S. data this week continues to point to underlying economic resilience, with ADP private payrolls rising a solid 86k in October and weekly jobless claims remaining near historically low levels. Services activity is also expected to stay in expansion territory. Friday’s official jobs report is forecast to show nonfarm payrolls rising around 60k, with the unemployment rate holding steady near 4.2%. Such a reading would underscore a labor market that has cooled but not cracked.
One might expect that the potential for throttled growth might also tame inflationary pressures somewhat, reducing the likelihood of further Fed tightening. However, expectations for a 25 bps rate hike in December are back above 80% today. Fed funds futures imply 33 bps of tightening through March 2027. The October jobs report may clarify the picture.
GOLD
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$166.22 (+4.29%)
5-Day Change: -$22.75 (-0.56%)
YTD Range: $3,870.47 - $5,595.02
52-Week Range: $3,870.47 - $5,595.02
Weighted Alpha: -5.20
Gold is up more than 3% in the wake of the U.S. midterm election, helped by lower yields, a weaker dollar, and easier oil. Some of the bid is likely attributable to safe-haven buying amid post-election uncertainty and bargain hunting after the yellow metal hit 52-week lows on Friday.
The rebound above $4,000 is encouraging for the bull camp, but last week's high at $4,081.08, fortified by the 20-day moving average at $4,075.62, has contained the upside this far. A close above this zone is needed to bolster a bottoming scenario and clear the way for renewed probes above $4,200.
The significance of the late-September and early-October highs above $4,200 is bolstered by the declining 100- and 50-day MAs. A short-term penetration of this area would bode well for further retracement toward $4,400.
Central banks remained a key source of gold demand in the third quarter, adding an estimated net 321 tonnes to reserves, +42% from a year earlier and the strongest quarterly total since late 2024. The buying lifted year-to-date purchases to 675 tonnes, 6% higher than the same period in 2025, as official institutions continued to prioritize portfolio diversification and risk management even at elevated prices.
Central bank buying appears to have carried momentum into early Q4, with reported purchases in September remaining solid and key buyers such as China still active. The World Gold Council has raised its full-year 2026 forecast for official-sector demand to at least match 2025 levels, with the strong third quarter raising the possibility of a higher annual figure.
Looking into 2027, central banks are widely expected to remain significant buyers as diversification and risk-management motives persist. That structural support, alongside recent price stabilization, increases the likelihood that the recent soft patch in gold has marked a low.
The early U.S.-session low at $4,029.80 marks initial support ahead of the $4,000 level. Below the latter, previous lows at $3,976.53 and $3,934.52 now protect last week's low at $3,870.47.
SILVER
OVERNIGHT CHANGE THROUGH 6:00 AM CT: +$2.194 (+4.41%)
5-Day Change: -$1.908 (-3.54%)
YTD Range: $48.624 - $121.630
52-Week Range: $46.910 - $121.630
Weighted Alpha: -11.36
Silver is leading the way higher, buoyed by declining yields, a softer dollar, and lower oil prices. The white metal is up more than 5% on the day, trading comfortably above $52.
At this point, the declining 20-day moving average is well protected above $55. A series of highs from late October at $54.593/725 provide a good intervening barrier.
A short-term close above the 20-day is needed to clear the way for a push to the 20-Oct high at $58.571. Above that, the $60 zone would be back in play.
Democrats have traditionally favored tighter limits on fossil-fuel expansion and stronger support for renewables. A shift in that direction would favor solar and other clean-energy projects. Because silver is a key input in photovoltaic panels, any acceleration in renewable buildout may support higher industrial demand for the metal.
On the other side of the coin, silver is also deeply embedded in data-center infrastructure and advanced manufacturing that power the AI buildout. If Democrats try to slow the AI and broader tech growth through tighter regulation or reduced fiscal support, it could remove one of the stronger structural underpinnings the market has enjoyed.
An intraday retreat below $52 would return focus to the early U.S. low at $51.642. Minor chart points at $51.258 and $50.890 stand in front of the $50 level and today's low at 48.977. It's too early to suggest that yesterday's low at $48.624 is a significant bottom.
Peter A. Grant
Vice President, Senior Metals Strategist
Zaner Metals LLC
312-549-9986 Direct/Text
[email protected]
www.zanermetals.com
Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete, and/or up-to-date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Metals LLC unless otherwise expressly noted.