Gold and silver futures rebounded from last week’s sharp selloff as renewed diplomatic efforts between the United States and Iran pushed crude prices lower and eased some inflation concerns.
Iran and Qatar continued talks aimed at ending the war in the Middle East, with reports suggesting President Trump is willing to give more time to seek a diplomatic solution; meanwhile, Iranian media also said the Supreme Leader has agreed to begin negotiations. As a result, benchmark crude futures fell more than 7%.
The drop in oil prices allowed risk assets to rebound, which clearly helped precious metals, but precious metals investors remain concerned that interest rates could rise further. Therefore, given that gold broke below the $4,000 mark last week, the path of least resistance for gold remains lower unless it reclaims $4,000.
The Nasdaq overnight fully gave back its rebound from around 28,000. Market panic has risen due to the U.S. midterm elections, rising costs of AI infrastructure, and concerns about the sustainability of the spending boom.
Bank of America said that while any spending cuts could be an “unwelcome” signal for investors, they could actually extend the consumer cycle.
The firm’s analysts argued that if profitable AI demand remains strong while capacity growth slows, it could actually increase computing power and delay the peak of AI.
The firm’s analysts wrote in a client report: “Slower supply growth amid strong demand could raise capacity utilization, support prices, and reduce the risk of overcapacity. The result could be lower peak earnings but a longer earnings cycle, and chipmakers’ valuation multiples could be higher, as their current valuations already reflect the trend of an approaching cycle end.”
Market focus will shift to the U.S. midterm elections to assess their potential impact on fiscal policy and overall market sentiment, but regardless of the midterm results, deficits should persist, suggesting that the U.S. debt and interest burden should continue to be a long-term support for gold.
Plugin Case Study
Gold: After a wave of recovery to reclaim 3,950, price was repelled on the way to testing 3,980 and pulled back. Price has now fallen back below 3,930 and needs to retest the liquidity zone broken through overnight before a rebound signal can appear. Intraday, first watch for V-shaped reversal signals in the yellow zone; second, watch for buy-on-dip after a breakout above 3,972 in the blue zone.
(Gold 15-minute chart)
Nasdaq: Yesterday, price retraced to the gap but failed to stop falling and rebound; instead, it made a new swing low. After making a new low, no momentum signal appeared. We advised on the official website to wait for a day, as there may be repeated liquidity sweeps, making it difficult to capture trades.
(Nasdaq 15-minute chart)
Crude: Price fell sharply from around 103 to the 95 level, and negative factors could emerge at any time during the midterm elections. However, we currently judge that the likelihood of resolving differences between the U.S. and Iran remains low, but there is a possibility of triggering some interim agreement or temporary easing. Therefore, operations should still focus on selling after rebounds. Intraday, watch for signals of a second pullback after a sweep in the yellow zone.
(Crude 15-minute chart)
Key Economic Data and Events to Watch Today:
23:00 U.S. September JOLTS Job Openings (in 10,000s)
