Gold has retraced almost half of its gain: yesterday spot rose to $4,120/oz, but today it pulled back from the weekly high. Silver was nearly unchanged, while platinum and palladium rose. Copper fell into the same vortex.

The trigger was Thursday's acceleration of chipmakers' sell-off on worries about how a Democratic Congress will affect the AI sector. Some investors began selling gold to reduce risk and free up liquidity.

The contrast with earlier in the week is stark. On Wednesday morning, spot was around $3,942, then the metal jumped more than 3% on the day — the strongest daily gain since August — and on Thursday in Asia, the price reached roughly $4,140. The bet was simple: new politicians will fight inflation, much driven by the Iran conflict, and divided government will constrain Trump's fiscal agenda — meaning lower spending and borrowing. But that logic has two opposing implications. If inflation is under control, the Fed gains more room and rate pressure eases, which supports a non-yielding metal. At the same time, tighter fiscal expansion is theoretically less supportive for gold, which some investors buy as protection against unchecked government spending and deficits.

Then, the dollar kicked in. It strengthened on Thursday, enough to check gold since the metal is dollar-priced. On Friday, the pressure intensified: the dollar strengthened against all G10 currencies, whereas on Wednesday it was the weakest in the group. That benefits dollar holders and cash/bond investors, while leveraged gold holders are forced to cut positions to meet margin calls.

The key question is why the stock sell-off did not translate into the usual safe-haven bid for gold. The answer lies in rates. The market still prices a Fed hike in December, and another one in March, and high energy prices support inflation expectations. I think the pattern of the past two weeks is repeating: on October 22–23 gold was sold to raise liquidity; on October 30 it fell below $4,000 together with AI stocks, and now it is giving up gains again. The metal is acting as a source of cash to cover losses, not as a haven.

The next twist in the road depends on the US nonfarm payrolls. Consensus expects payrolls to rise by 65,000 after 29,000 in September. A weak print would be bearish for the dollar and Fed-hike expectations, which would support gold.

Technical view: buyers need to reclaim immediate resistance at $4,060. That would target $4,124, above which further gains will be difficult. The farther target is $4,192. On the downside, bears will try to take control of $4,000. A decisive break below that range would hit bulls hard and push gold toward $3,954, with a further extension to $3,906.