Gold reclaims $3,900 as oil falls ahead of US midterms

Spot gold rose 0.6% to $3,900.05 per ounce in early Monday trading, while US gold futures gained 0.2% to $3,908.30 and the US Dollar Index slipped 0.2% to 101.88, according to ScrapMonster.

The rebound followed a 3.7% fall in the previous session, when gold touched a one-year low and completed its worst October performance since 2008, with bargain buying helping the metal gain as much as 0.7% during the recovery.

Oil fell for a second straight session ahead of the US midterm elections on November 3, after US Secretary of State Marco Rubio said President Donald Trump favored a diplomatic solution to the conflict with Iran, while Trump warned that strikes could resume after the elections and Tehran threatened a broader response.

A selloff in technology shares linked to the artificial intelligence boom pushed some investors to sell gold to cover losses elsewhere, while silver rose 1.4% to $49.83, platinum fell 3.4% to $1,434.65 and spot palladium dropped 2.6% to $980.35.

What do these terms mean?

Spot gold: The price at which the metal trades immediately in the global market rather than for delivery on a later date, and the most closely watched reference for gold prices.

Futures contracts: Agreements to buy or sell a commodity at a set price today for execution on a later date, used for hedging or speculation.

Dollar index: An index measuring the US dollar's value against a basket of major currencies, which affects the pricing of dollar-denominated commodities.

Safe haven: An asset investors turn to when risk or uncertainty rises to preserve the value of their money.

Liquidity: The ease of buying or selling an asset without a large change in its price, which usually declines in periods of stress.