Gold in positive territory: Geopolitics and Oil support optimism

Gold traded around 3,950 USD per ounce on Tuesday after rising almost 2% the previous day. The metal rebounded from annual lows as lower oil prices and signs of diplomatic progress between the US and Iran somewhat eased inflation concerns.

US President Donald Trump announced progress in the negotiations. At the same time, Iranian President Masoud Pezeshkian stated his government had received greater powers from the country’s Supreme Leader to continue peace talks. The decline in the geopolitical premium on oil reduces the risk of renewed inflationary pressure, supporting gold.

Throughout the year, the precious metal has remained under strong pressure: the Middle East conflict kept energy prices high, fuelled inflation and prompted central banks to raise interest rates. An additional negative factor was the global sell-off in technology and AI stocks, which triggered widespread liquidation of positions and weighed on the precious metals market.

Investors are now closely watching the US midterm elections. The Trump administration and the Republican Party face increasing political pressure from high energy prices, so further movements in oil prices and prospects for resolving the conflict remain key factors for gold.

Technical analysis

On the four-hour gold chart (H4 XAU/USD), the downward structure remains intact: a sequence of lower highs is accompanied by new lows. After declining to 3,870 USD, the market recovered towards the 3,970 USD area, but buyers failed to consolidate above this zone. A subsequent downward reversal indicates continued selling pressure. For the 4 November session, the baseline scenario envisages a test of support at 3,906 USD, with a possible continuation of the decline towards 3,880 and 3,870 USD.

The MACD indicator is below zero, consistent with dominant downward momentum. At the same time, the latest histogram bars are shrinking in absolute terms, and the signal line is slowing its decline. Therefore, while the indicator confirms a negative backdrop, it does not yet suggest intensifying selling pressure. The nearest resistance is around 3,939 USD, with the next resistance area at 3,970 USD.

On the hourly chart, price has moved below 3,939 USD and continues towards 3,906 USD. A close below this support would increase the likelihood of a retest of the lower part of the range. The Stochastic oscillator is below 20, reflecting oversold conditions and continued short-term pressure. This increases the likelihood of a technical rebound, so the price may pause as it approaches support.

An alternative scenario sees price holding above 3,906 USD and recovering towards 3,939 USD. A sustained close above this resistance would open the way towards 3,970 USD and 3,976 USD. Only a break above this area would create the conditions for the correction to extend towards 4,045 USD. Until such confirmation appears, the downward scenario remains the priority, and any growth is considered corrective.

Conclusion

Gold has found some relief after rebounding from annual lows, supported by lower oil prices and signs of diplomatic progress between the US and Iran. The reduction in the geopolitical premium has eased inflation concerns, supporting the metal after months of pressure from high energy prices and central bank rate hikes. However, the broader downtrend remains intact, with gold facing headwinds from the ongoing global sell-off in technology and AI stocks. Technically, the bearish structure persists, with support at 3,906 USD and targets at 3,880 USD and 3,870 USD if the decline resumes. A short-term technical rebound is possible given oversold conditions, but any recovery towards 3,939 USD and 3,970 USD would likely be corrective. The US midterm elections and developments in the Middle East will remain key drivers of gold’s near-term direction.