Gold and silver rebound as weaker dollar encourages buying after October selloff

Gold and silver recovered on Monday, November 2, as a softer US dollar and declining oil prices encouraged investors to return to precious metals following last week's sharp losses.

Gold climbed back above $3,900 an ounce, while silver posted stronger gains after suffering a particularly steep decline in October. However, expectations of another Federal Reserve interest rate increase continued to limit the recovery.

Price overview

Spot gold traded around $3,908 an ounce in Monday's session, up approximately 0.84%, while spot silver advanced 2.22% to $50.24 an ounce.

Gold fluctuated between $3,875.55 and $3,919.26, while silver traded between $49.13 and $50.55.

Dollar weakness supports recovery

The dollar remained under pressure ahead of Tuesday's US midterm elections, making precious metals less expensive for investors holding other currencies.

Meanwhile, oil prices retreated amid reports of renewed diplomatic efforts between Washington and Tehran, easing concerns about another energy-driven inflation shock.

The combination encouraged bargain hunting following Friday's heavy selling.

Fed expectations limit gains

The Federal Reserve maintained interest rates at 3.75%–4.00% last week, with two policymakers favoring an immediate increase.

Strong US economic growth and persistent inflation have kept expectations of further tightening alive, limiting the appeal of non-yielding assets.

Investors will closely monitor Friday's employment report for indications of the Fed's next move.

Silver outperforms gold

Silver's stronger recovery reflected renewed buying after its October decline, although uncertainty over industrial demand continued to weigh on the broader outlook.

Market outlook

Gold faces resistance near $3,920, followed by $3,950, while support stands around $3,875.

Silver could test resistance near $50.55, with immediate support around $49.13.

The recovery remains vulnerable to renewed dollar strength or rising Treasury yields, particularly if upcoming US economic data reinforce expectations of another rate increase in December.