Gold Holds Near $3,950 an Ounce After Rebound on Hopes for US-Iran Peace Talks

International gold prices were little changed near $3,950 an ounce after rebounding on hopes for peace talks between the US and Iran.

Spot gold was at $3,944.23 an ounce as of 10:22 a.m. in Singapore on November 3, little changed from the previous session, Bloomberg reported. Prices rose 1.9% a day earlier, the biggest one-day gain in two months.

Expectations for easing tensions in the Middle East helped fuel the rebound. Iran's president said he had been granted additional authority by the supreme leader to pursue negotiations with the US. President Donald Trump also signaled possible progress in the talks. International oil prices fell more than 7% the previous day.

The nine-month war in the Middle East has driven up energy prices and inflation, adding to pressure on major central banks to raise interest rates. Gold does not pay interest, so higher rates tend to make it less attractive. Recent declines in oil prices appear to have supported gold by easing inflation concerns.

Still, volatility in the gold market persists. Gold fell 6.8% in October. By the end of the month, it had dropped below $4,000 an ounce and touched its lowest level in a year. Last week, selling pressure intensified as investors nursing losses from a sharp selloff in artificial intelligence-related tech stocks sold gold to raise cash.

Markets are also watching the outcome of the US midterm elections later in the day. Noah Holdings said changes in US fiscal policy, Treasury issuance strategy and the Federal Reserve's room to manage interest rates after the vote will be key drivers for gold.

The asset manager added that potential US Treasury intervention in the bond market, reliance on short-term debt and the Fed's ability to control short-term rates could also indirectly affect gold prices.

At the same time, spot silver fell 0.8% to $50.23 an ounce after rising more than 3% the previous day. Platinum edged higher, while palladium weakened. The Bloomberg Dollar Spot Index was little changed after falling 0.3% over the previous two trading sessions.