Gold Prices Slip Near $3,870 as Treasury Yields Fall and Election Uncertainty Looms

London spot gold, the benchmark for global pricing, fell nearly 4% on October 30, touching $3,869 per ounce, the lowest level since October 2025. The decline occurred despite a pullback in U.S. Treasury yields, a move that traditionally supports the non-yielding metal.

Market participants cited the upcoming U.S. midterm elections as a potential catalyst for renewed inflationary pressure. If crude oil prices rise further, the Federal Reserve could feel compelled to tighten monetary policy, reducing gold’s cost-of-carry advantage.

Takahiro Morita of Japan’s Morita Partners said the election outcome is unlikely to be bearish for gold in the long term, pointing to the continued expansion of U.S. debt as a structural support. Tim Waterer, chief market analyst at KCM Trade in Australia, added that the market is more focused on whether the United States will launch another strike on Iran after the vote, noting that President Trump previously restrained such action to avoid voter backlash over oil prices.

Brent crude futures reached $118 a barrel on October 30, a six-month high, after attacks on Saudi facilities by Iran-aligned Houthi militants in Yemen. Analysts warned that a large-scale U.S. strike on Iran could push oil prices higher, intensifying inflationary pressures.

Rona O'Connell, head of market research at StoneX, observed that while geopolitical risk is normally bullish for gold, the market is currently linking it to expectations of a Federal Reserve rate-hike cycle, which acts as a bearish factor. Federal Reserve Chair Kevin Warsh described inflation as "too high" at a recent press conference.

Nicky Shiels of MKS PAMP explained that investors trimmed gold holdings ahead of major events to preserve liquidity. Despite the sell-off, several analysts see the metal as oversold. Suki Cooper of Standard Chartered noted that gold is approaching oversold territory, and Atsuko Sato of BullionVault said long-term investors are likely to view price declines as buying opportunities.

Compared with other precious metals, gold has fallen about 10% since the end of last year, while silver, platinum and palladium have dropped 30% to 40%.

The short-term direction of gold will hinge on two factors: U.S. policy toward Iran after the midterms and the trajectory of oil prices and inflation expectations. If oil prices keep rising and the Fed maintains a hawkish stance, gold may stay under pressure; a softer Fed outlook could revive safe-haven demand.