Gold Weekly Forecast: Post-midterm elections relief rally loses momentum

Gold (XAU/USD) staged an impressive rebound after dropping to a fresh 2026 low below $3,900 at the end of the previous week. Although the precious metal retreated from the two-week top it set near $4,150, it managed to end the week decisively higher.

Gold recovered sharply after falling to its lowest level in over a year below $3,900.

US October inflation data and developments surrounding the Middle East conflict could drive Gold’s valuation.

Gold rises sharply in response to US midterm election outcome Improving risk mood at the beginning of the week caused the US Dollar (USD) to come under bearish pressure and helped XAU/USD register gains on Monday.

US Secretary of State Marco Rubio said over the weekend that President Donald Trump would like to resolve the Iranian war “diplomatically,” without the use of military force, and Gold gained nearly 2% on the day.

After rising more than 3% on Wednesday, Gold extended its rally and touched its highest level in two weeks near $4,150 on Thursday.

Additionall, the Unemployment Rate declined to 4.1% from 4.2%, even though the Labor Force Participation Rate improved to 61.9% from 61.8%.

Speaking at a news conference after the Fed's decision to leave interest rates unchanged at a range of 3.75%-4.00% , Federal Reserve (Fed) Chair Kevin Warsh described labor market conditions as “positive,” and added that the discussion among policymakers is focused mainly on the price stability mandate.

Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council.