Gold down amid firmer dollar, strong U.S. economic data; eyes on midterm elections

Investing.com — Gold slipped in a volatile session on Tuesday, amid a weaker dollar and muted oil prices. Precious metal market participants were also closely watching the outcome of the high-stakes U.S. midterm elections.

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Spot gold dropped 0.4% to settle at $3,930.21/oz, while gold futures fell 0.7% to settle at $3,940.15/oz.

“(Gold) continues to hover around $3,900 having retested support around lows last seen in October last year. This can hardly give the bulls much confidence seeing how easily gold broke below support that built throughout the summer,” David Morrison, senior market analyst at Trade Nation, said.

Traders parse strong U.S. data, keep an eye on polls

Gold has been under pressure in recent sessions as a slide in the artificial intelligence trade on Wall Street led to investors pulling money out of stocks, the greenback, and bullion and into safe-haven assets such as U.S. Treasury bonds and the Japanese yen.

For watchers of monetary policy, the economic calendar indicated a healthy U.S. labor market and resilient manufacturing growth. As per the latest Job Openings and Labor Turnover Summary (JOLTS), job openings in September were 7.523 million, the highest since May. The reading suggested labor strength ahead of the all-important nonfarm payrolls report on Friday.

Separately, the U.S. Census Bureau said new orders for manufactured goods in September, up three consecutive months, increased 1.8% to $677.2 billion. Consensus estimates had called for a rise of 1.2%.

Also in focus on Tuesday were the U.S. midterm elections, in which millions of voters were set to deliver a verdict on the first two years of President Donald Trump’s second term.

With all 435 seats in the House of Representatives and 35 Senate seats up for contention, nonpartisan forecasts and prediction markets continue to favor Democrats to regain control of the House, while the Senate race remains tightly contested.

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A Democratic sweep or divided government would introduce legislative gridlock, dampening expectations for further fiscal stimulus while setting the stage for protracted showdowns over federal spending caps and the debt ceiling in 2027. Conversely, an unexpected Republican hold across Congress would preserve the path for aggressive trade tariff implementation and corporate tax preservation.

Oil muted

Turning to geopolitics, oil prices were largely subdued on Tuesday, with Brent crude futures, the global benchmark, dipping 0.4% to settle at $104.38 a barrel.

The muted action came after Trump said he would cut off $4 billion in aid to Israel by the end of the year. Speaking to Fox News, Trump said Israeli Prime Minister Benjamin Netanyahu had agreed to the stoppage in aid. Trump also suggested Israel no longer needed the funding because it had “become a very successful country.”

The fall in oil also came as hopes for diplomatic progress between the U.S. and Iran remained high, despite some setbacks. Mohsen Rezaei, Secretary of the Supreme National Security Council of Iran, on Tuesday said a U.S. response to a proposal by Iran to end the conflict “was not convincing.”

“They must fully and explicitly address Iran’s seven conditions and act upon them; only in this case will the Strait of Hormuz be reopened,” Rezaei added. The conditions include demands such as the cessation of hostilities on all fronts and the unfreezing of frozen Iranian assets.

The Wall Street Journal also reported that the U.S. had attacked Iran’s Qeshm Island on Monday, citing U.S. officials. The strike was part of a series of limited U.S. attacks on Iran in recent weeks, the report said, as Washington sought to avoid signaling a return to a broader military campaign. Qeshm lies in the Strait of Hormuz.

But energy markets continued to take heart from Monday’s development in Iranian state media reporting that Supreme Leader Mojtaba Khamenei had granted “certain authorities” to pursue dialogue with the U.S., citing comments made by Iranian President Masoud Pezeshkian.

Roushni Nair and Scott Kanowsky contributed to this article

Original Article

Gold down amid firmer dollar, strong U.S. economic data; eyes on midterm elections

Oil prices subdued amid U.S.-Iran diplomacy hopes, Trump’s halting of Israel aid

Goldman lifts natural gas price forecasts on supply, weather uncertainty