Gold prices rebound: Is the worst over? US elections, Fed outlook to decide next move

Gold and silver are showing signs of recovery after a bruising week, but investors may not be out of the woods yet. With crude oil prices, inflation concerns and US Federal Reserve policy weighing on sentiment, precious metals face a crucial test this week as markets track the US midterm elections and fresh employment data.

On November 2, MCX December gold futures rose 0.15% to ₹1,38,691 per 10 grams, while silver gained 1.04% to ₹1,80,990 per kilogram. Internationally, gold futures climbed 0.30% to $3,910 per ounce, while silver advanced 1.61% to $50 per ounce.

However, the modest rebound follows a sharp sell-off last week. Gold fell approximately 2.49%, while silver plunged nearly 8.47%. Both metals breached crucial international support levels, with gold slipping below the psychologically important $4,000 mark and silver falling below $50.

According to Sugandha Sachdeva, Founder of SS WealthStreet, elevated crude oil prices, persistent inflationary pressures and expectations of further monetary tightening by the US Federal Reserve have weighed on precious metals. Selling across global financial markets, particularly cryptocurrencies and AI-related technology stocks, may also have intensified the decline.

Reports of a major cyberattack involving Binance, one of the world's largest cryptocurrency exchanges, added to market uncertainty, while leveraged position unwinding and margin-related liquidations may have increased selling pressure.

US Elections, Iran Tensions and Fed Policy in Focus

The November 3 US midterm elections are another key trigger. A potential shift in congressional control could influence President Donald Trump's policy agenda, US-Iran relations, crude oil prices and global market sentiment. However, the election outcome alone will not determine the course of the Iran conflict.

Signs that Trump is willing to pursue an agreement with Iran have raised hopes of a diplomatic breakthrough. A credible settlement and a meaningful decline in crude oil prices could ease inflation concerns and trigger a technical rebound in gold and silver.

Markets will also watch the US non-farm payrolls report for clues about the Federal Reserve's December policy decision. Weaker employment growth could ease expectations of tighter monetary policy, while stronger data could reinforce the prospect of higher-for-longer interest rates.

Key Gold and Silver Levels to Watch

Sachdeva identifies ₹1,37,000 as immediate support for domestic gold, followed by a crucial support zone near ₹1,27,000. For silver, immediate support lies at ₹1,72,000–₹1,73,000, followed by ₹1,60,000.

The near-term outlook remains cautious to bearish, with volatility likely to stay elevated. While easing geopolitical tensions and lower crude prices could spark a recovery, the broader technical structure remains weak. Investors will need to watch whether gold and silver can defend their key support levels before treating the latest gains as a sustained trend reversal.