Given the prevailing negative gold-oil correlation, near-term gold moves could remain highly sensitive to oil prices.
Gold price prediction today: Several global factors are likely to continue weighing on gold, making its upside limited, says Praveen Singh, Head Currencies and Commodities, Mirae Asset ShareKhan. Let’s take a look at his detailed view:
Gold Performance:
- Spot gold prices, following a steep decline of over 3% in the week ending October 30, rose sharply on November 2 as crude
oil prices slumped nearly 7% on hopes for resumption of peace talks between Iran and the US. - In the week ending October 30, Spot gold fell 3.02% to $3875 as momentum selling gathered pace amid rising oil prices.
- At the time of writing this article on the night of November 2, the shiny metal was trading with a sharp gain of 2% at $3959.
Geopolitics and oil:
- Oil prices slumped on Monday as Iran’s Supreme leader Khamenei gave the government permission to hold peace talks amid heightened geopolitical concerns that US-Iran conflict can escalate violently.
- Earlier, Axios reported that Trump told Israeli Prime Minister Benjamin Netanyahu that he remains open to allowing more time for a diplomatic solution to the conflict with Iran. However, the situation remains uncertain as Iran continues to maintain the stance that it will facilitate energy transport through the Strait of Hormuz and return to formal negotiations only after the US lifts its economic blockade.
- At the time of writing this article on the night of November 2, Brent oil futures were trading at $105.77, down ~7% for the day and were at the lowest since October 16. Near-term support is seen around $103.50, followed by $100.
Data roundup:
- US ISM manufacturing rose from 54.5 in September to 55.5 (forecast 54.50) in October — highest since July, as the employment Index expanded for the fourth straight month. ISM prices paid edged lower from 77.90 to 75.2, vs the estimate of 77.20, but remains elevated. New orders rose for the ninth straight month.
- China’s manufacturing PMI fell from 50.1 in September to 49.30 in October, as even non-manufacturing PMI contracted from 50.2 to 49.70. RatingDog manufacturing PMI edged lower from 52.1 in September to 52 in October, which was in line with the estimate.
- Euro-zone manufacturing PMI improved from 52.4 to 52.7 in its October final reading.
- UK’s manufacturing PMI came in at 52.8 in October, which matched the forecast.
Dollar Index and yields:
- Dollar Index eased 0.10% to 101.70 on Monday as oil prices slumped, though two-year US yields rose 2 bps to 4.6050, while tens were down 2 bps to 4.90%.
Fed rate hike probability:
- Probability of the US Federal Reserve hiking the Fed fund rate stood at 77%, with total 2.35 hikes priced in by October 2027.
US Midterm elections due on November 3:
- Democrats need a net gain of three seats to take control of the House and four seats to take control of the Senate. If the outcome goes down to the wire, the Associated Press may take days after the election to call control of the House, as was the case in the 2022 midterm elections, while calling control of the Senate could take even longer.
- Iran war and US elections: Even if the opposition gains control of Congress and takes office in January, this would not automatically bring an immediate end to the conflict. The President retains considerable authority as Commander-in-Chief to conduct ongoing military operations, while legislation compelling a withdrawal could face a presidential veto and require a two-thirds majority in both chambers to override it. However, an opposition-controlled Congress could increasingly constrain the administration through funding restrictions, war-related appropriations and aggressive congressional oversight. Thus, a change in congressional control would raise political pressure to de-escalate, but the conflict could persist amid a prolonged executive-legislative standoff.
Gold ETF:
- Total known global
gold ETF holdings stood at 100.97 Moz as of October 30, down 0.17 Moz for the week. Holdings are 2.02 Moz up YTD, though are up merely 0.02 Moz since the start of the Iran war on February 28. Holdings have fallen 0.58 Moz since the cycle high reached on October 21.
COMEX inventory:
- Registered COMEX inventory at 14.81 Moz is down from the record peak of 24.25 Moz seen at the peak of tariff wars in April 2025. Inventories have risen from the cycle low of 14.19 Moz seen on August 7.
CFTC positioning:
- Money managers reduced their net long gold bets by 1281 lots to 107,404 lots – the least bullish position in twenty weeks, according to the CFTC data for the week ending October 27. Likewise, long only positions fell 124 lots to 124,352 lots — more than five-month low. Short-only positions were up 1157 lots to 16,948 lots– two-week high.
Fitch Ratings revised France’s outlook to negative:
- The rating Agency Fitch affirmed long-term issuer default rating at A+ but unexpectedly revised its credit outlook to negative on deterioration in public finances, high government debt, elevated borrowing costs, weaker growth and political uncertainty.
Upcoming data:
- This week is crucial for financial markets as several key US data are on tap. Major data include September JOLTs job openings and final durable goods orders (November 3); October ADP employment change and ISM services (November 4); October nonfarm payrolls (November 6); and November preliminary University of Michigan sentiment and inflation expectations. Major focus will be on the nonfarm payroll report.
- Investors will monitor Eurozone and UK services and composite PMIs (November 4), and Eurozone October CPI inflation (November 4), too.
Gold Price Outlook:
- High volatility in oil, and consequently gold, is likely as the US midterm elections approach. Geopolitical uncertainty remains elevated, with the US administration keeping both diplomatic and military options toward Iran open.
- The risk of renewed US-Israeli strikes on Iran after the elections remains significant. Even a Republican defeat in the midterms would not necessarily lead to an immediate de-escalation of the Iran conflict.
- Given the prevailing negative gold-oil correlation, near-term gold moves could remain highly sensitive to oil prices. A sustained decline in oil may require clearer signs of a diplomatic resolution to the Iran conflict.
- US nonfarm payrolls represent another major near-term catalyst for gold.
- Overall, gold’s upside is likely to remain constrained unless prices decisively breach the 4,030-4,066 resistance zone. Supports are seen at 3,900/3,875/3,800/3,750. In the absence of a credible US-Iran agreement over the Strait of Hormuz, gold remains vulnerable to a test of the key $3,750 support. The outlook could change materially in the event of a fresh market shock or an exceptionally weak US nonfarm payrolls report.
(Disclaimer: Recommendations and views on the stock market, or any other asset classes or personal finance management tips given by experts and analysts are their own. These opinions do not represent the views of The Times of India.)
