Gold price this week: best week since August, CPI next

Key points

• Gold rose 5.1% to about $4,072 in the week to Friday, its best week since August
• Democrats won Congress on Tuesday, and the dollar and Treasury yields fell
• Tuesday brings the US October CPI, the main test for December rate hike bets
• Support sits near $4,000 and the 30 October low; the 50-day average near $4,200 is the cap

The gold price this week rose 5.1%, from about $3,876 to $4,072 an ounce, as the US midterm result pulled the dollar and Treasury yields lower and oil fell on hopes of an Iran deal. Friday's strong jobs report trimmed the gain. The US October consumer price figures on Tuesday are the one release that matters most next week.

Why it matters: Gold has been fighting a market that expects the Fed to raise rates in December. A soft inflation figure would weaken that case; a hot one would strengthen it and test the week's gains.

Last week in numbers

The rally recovered about an eighth of the fall from January's record, on our price data. A rise of this size over five sessions is bigger than 97% of 7-day stretches since 1968, by our calculation from the London price. Gold is still lower over the month and the year.

For buyers outside the US, Friday's close works out as follows at the latest exchange rate.

Readers in the Gulf can follow the day's figure on our gold price in the UAE page, and Indian readers on the gold price in India page.

What moved gold last week

Why did gold jump after the US midterms?

Democrats took control of Congress in Tuesday's vote, and the market read a divided Washington as less fiscal spending and fewer new Treasury bonds. Kitco reported that the result sent the dollar and Treasury yields lower. Gold, which pays no interest, gains when yields fall. Wednesday's 3.3% rise was the biggest daily gain of the week, as our Gold Performance for 4 November showed.

Oil helped too. Crude fell on hopes of progress in US and Iran talks, which eased fears of an energy-driven inflation spike that would push central banks to keep hiking.

Did the Bank of England hike matter?

The Bank of England raised Bank Rate to 4% on Thursday, its first rise since 2023, by a vote of 8 to 1. Gold dipped through the London afternoon but still closed Thursday up 0.7% at about $4,089. A second major central bank tightening in a week, after the European Central Bank's hike on 29 October, reminded traders that rates are rising almost everywhere.

Why did gold fall on jobs day?

The US economy added 165,000 jobs in October against forecasts near 65,000, and unemployment fell to 4.1%, CNBC reported. The CME FedWatch tool put the chance of a December Fed hike near 75%. Gold fell to about $4,033 at its low on Friday, then recovered to close down 0.4%, as our Gold Performance for 5 November had flagged it might.

Levels to watch for gold

Support starts at the round $4,000 mark, which gold regained on Wednesday. Below it, Tuesday's close near $3,931 and the one-year low of about $3,876 from 30 October are the levels buyers defended. Above, Thursday's intraday high near $4,146 comes first, then the 50-day average at about $4,200. The 200-day average sits much higher, near $4,465.

Seasonality offers a small tailwind. November has been a better month than most for gold: up in 36 of the past 58 years, with an average gain of 0.8%, on our data since 1968.

The week ahead for gold

Will Tuesday's US inflation figure push gold higher?

The Bureau of Labor Statistics publishes October CPI on Tuesday. Forecasters expect a rise of about 0.3% on the month, down from 0.6% in September, CMC Markets said. If the figure comes in at or under that, the December hike looks less certain, and gold is likely to hold above $4,000 because lower expected rates cut the cost of holding a metal with no yield. If it runs hotter, the dollar and yields are likely to climb and gold could give back part of last week's rise.

Can China's numbers move the price?

China publishes October consumer and producer prices on Monday. The People's Bank of China said on Saturday it added gold to its reserves for a 24th straight month in October. Weak prices in China would add to the case for more stimulus, which has tended to support local demand for gold.

Important dates for gold

• Mon 9 Nov: China October CPI and PPI, a read on the economy behind the world's biggest gold buyer
• Tue 10 Nov: US October CPI, the main test for a December Fed hike
• Wed 11 Nov: Veterans Day, US bond market closed while stocks trade, so moves may be thin
• Thu 12 Nov: US weekly jobless claims, a check on Friday's strong jobs report
• Fri 13 Nov: US October PPI, and the CFTC positioning report for COMEX gold