Strong week for metals as gold and palladium prices rise after the dollar pulls back

 

This Week

US inflation data on November 10 is the main economic event, followed by producer prices on Friday. Traders will also watch US-Iran negotiations and Democrats’ proposed AI legislation for clues about possible investigations, safety requirements and restrictions on data-centre development. Those proposals could influence future AI policy.

Stocks

NVIDIA

NVIDIA price fell 8.8% over the week, hitting its lowest level since April before recovering some ground on Friday. The technology sell-off gathered pace after the US elections, as investors worried that new state governments could make it harder to approve AI data centres, in states like Texas. Concerns over the sums being spent on AI infrastructure added to the pressure. Friday brought some relief as chip stocks recovered, helped by comments from Texas’s governor-elect that were less restrictive than investors had feared. Attention is now turning to NVIDIA’s November 17 results. The company expects quarterly revenue of around $108 billion.

Amazon

Amazon's price gained 8.2% over the week, reaching a more than two-month high. The biggest boost came on Wednesday, when final US election results triggered a sharp shift in technology shares. Investor sentiment shifted towards established cloud companies such as Amazon, while chipmakers and other AI equipment suppliers came under pressure, as concerns grew that new data-centre restrictions could slow construction. Amazon was seen as better placed to capitalise from its network of data centres and strong demand for Amazon Web Services. The shares also received support from positive analyst revisions, including an upgrade from Phillip Securities on Monday, followed by an increase in the price target from Mizuho.

Commodities

Crude Oil

Crude oil price fell 12.7% to a two-month low, recording its steepest weekly decline since the start of the war in Iran. The biggest drop came after the US midterm results raised hopes that a Democratic-controlled Congress could make it harder for Trump to continue military action against Iran. Reports of renewed diplomatic talks between Iran and Qatar also eased fears of further supply disruption. However, Thursday's reports of tanker attacks near the Strait of Hormuz, followed by Trump's warning that he was still considering military action against Iran, saw prices recover slightly on Friday.

Gold

Gold price gained 5.0% to a more-than-two-week high, its strongest weekly performance since August. The increase came after Democrats won control of Congress in the US midterm elections. The result weakened the dollar and supported gold prices amid uncertainty over the direction of US policy. Gold also received support from falling oil prices, which eased some concerns about inflation. Friday's stronger-than-expected US jobs report interrupted the rally: employers added 165,000 jobs in October, above the 65,000 expected. The figures pushed the dollar higher, strengthening expectations of another Fed rate increase in December and making gold less attractive.

Palladium

Palladium price rose 4.5% and reached a two-week high. The recovery initially coincided with a weaker US dollar following the midterm elections, which made the metal more affordable for overseas investors. Supply concerns added to the gains on Thursday, when Sibanye-Stillwater cut its forecast for US platinum and palladium production following disruption caused by a five-week strike in Montana. Palladium gave back some ground on Friday as the dollar recovered following stronger US employment figures.

AUD/USD

AUD/USD price declined to a six-month low as the Australian dollar came under pressure. The RBA raised interest rates by 25 basis points to 4.85% on Tuesday, but the close 6–3 vote and removal of wording suggesting further increases indicated that another hike was less certain. The Aussie also suffered as investors moved away from more volatile currencies during the tech sell-off. The US dollar initially weakened after the midterm results, allowing the pair to recover some ground, but it strengthened towards the end of the week after US employment figures came in stronger than expected.

 

Recap

Last week the S&P 500 fell 2.7%, the Nasdaq lost 3.4%, and the Dow Jones slipped 0.9%, as Democratic midterm victories in both houses raised concerns about tighter AI regulation and slower data-centre construction. The Nasdaq entered correction territory before Friday’s rebound. Crude oil fell, while gold, silver, platinum and palladium prices rose.

Investors initially priced out some risk of renewed US-Iran fighting, but oil recovered part of its losses after President Trump said a decision on military action had not been made, while Qatar continued mediation efforts. Apple beat earnings expectations on November 2, but concerns over its profit margins pressured its share price; AMD initially rallied after reporting strong data-centre growth before the wider tech selloff dragged its share price lower.