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Mid-Term Metals Melt Up. Manic Metals Report 11/05/2026

By On November 5, 2026 - 8:45 AM · In Manic Metals Report, Market Commentaries
Man, the metals must love Democrats. Maybe the market thinks a Democratic Congress will be inflationary and push folks toward safe havens. Maybe metals just needed clarity after weeks of political uncertainty. Either way, spot gold and silver jumped on Wednesday as projections pointed to major Democratic victories in the U.S. midterm elections, and the rally carried overnight. As of early this morning, Kitco had spot gold at $4,128.20 an ounce, up $69 on the day.
The question is whether this was just a relief rally, or whether yesterday’s big run signals a bottom. This market has been beaten up by political uncertainty and by a Fed chairman who won’t stop raising rates until inflation gets back to 2 percent.
Chairman Kevin Warsh raised rates in September, the Fed’s first hike since 2023, and promised a quicker return to 2% inflation. In October the Fed held at 3.75%-4.00%, but two members dissented in favor of a hike, and investors expect three more hikes over the next 12 months, including one in December. That is a tough backdrop for metals. It also means any sign the Fed won’t have to be so aggressive could light a fire under them.
That is where the midterm math comes in. Kitco points out that less fiscal stimulus and lower energy prices could ease inflation expectations and take some pressure off the Fed to keep tightening. A weaker dollar helps too: the dollar index slipped below 101.5 to a five-week low. History is on the bulls’ side as well. A new Kitco Research study found that gold rose an average of 14% in the 12 months after the last 13 midterm elections as I mentioned yesterday.
Or is the market finally waking up to the fact that many metals are in a supply deficit?
Silver started its historic run last year around this time and has now retraced almost all the way back. At 6 a.m. Eastern, silver was $52.85 an ounce, compared with $48.01 a year ago and $60.76 a month ago.
That’s a long way down from the record highs above $120 an ounce. Yet historical monthly charts say we could retest all-time highs again. The fundamentals haven’t gone away: the Silver Institute and Metals Focus say silver is headed for a sixth straight year of structural deficit, with 762 million ounces drawn from stocks since 2021, which raises the risk of another liquidity squeeze.
Silver has been punished as an industrial metal tied to the economy and the Fed. Now it may get its safe-haven shine back. Kitco says silver bulls need to push back above the $51.27 to $53.28 resistance zone, and a sustained move through the top of that zone would reverse the bearish technical picture. We are knocking on that door right now. And there’s still some reasonable option plays that could be put on yes I believe that we could see an explosive run into the new year.
Gold is getting massive support from central banks, which like to buy gold cheap.  AS I pointed out The World Gold Council reported that central banks bought 321 tonnes in the third quarter, well above typical recent quarters, bringing year-to-date buying to 675 tonnes. Even more telling, the stronger buying in the second and third quarters came as gold prices eased off their first-quarter highs. Central banks are buying the dips. ETFs also came back, adding 211 tonnes in Q3 and pushing holdings to a record 4,256 tonnes.
Not everyone is buying the safe-haven story yet. MarketGauge’s Michele Schneider told Kitco she believes gold’s flight-to-safety trade has been broken. Meanwhile Peter Boockvar says gold is being traded like an AI stock, which it isn’t. The longer-term bulls point out that gold hit an all-time high of $5,608 in January, and Commerzbank argues that October’s correction was overdone after gold had its worst October since 2008.
Seasonally, gold tends to put in a low in December and run into the new year, so this pullback may be setting up the next move. And to be honest with you I think after the midterms the medals could come alive it really seems the metals were held at by political uncertainty but also by certainty that the Fed was going to raise interest rates no the interest rate part of that should be priced in but what isn’t priced in is the physical tightness of supplies.
Doctor copper used to be a bellwether for the global economy and now it’s been the bellwether artificial intelligence uncertainty about data centers has taken the shine off copper, as it is the laggard of the group. Copper is critical for AI and data centers, but the Democratic win hurt it twice.
Copper fell to its lowest level since early August as AI stocks sold off, and the Democrats’ midterm win lowered the odds of a U.S. tariff on refined copper, leaving the metal testing key support near $6.31 a pound. The concern is that Democrats will try to slow progress and data center construction. There are worries that a Democratic Congress could affect future data-center investment.
When you look at copper it still is going to be significantly undersupplied and at some point the price of copper should double what it is today. Because let’s face it regardless of the election the supply story hasn’t changed.
Chile’s state copper commission forecasts Chilean output will fall 8.4% in 2026 to 4.94 million tonnes, and J.P. Morgan still sees copper averaging $14,800 a ton in the fourth quarter on supply constraints. The AI build-out will go on, with or without Washington’s blessing.
Seasonally, copper tends to firm up from December into the spring, so I see weakness here as a buying opportunity. So data centers will be springing up all over in spring which should get the copper to get springy here into the end of the year.
Platinum and palladium also bounced. Early this morning, platinum was at $1,522.38 and palladium at $1,029.40, back above the key $1,000 level for palladium.
 They needed the bounce: palladium started November below $1,000 after a 19.1% drop in October, and platinum lost 16.2% in the month.
The Russia impact on platinum and palladium is real.
Russia produces about 40% of the world’s palladium, and the Commerce Department set a preliminary anti-dumping margin of roughly 828% on unworked Russian palladium imports. That is tightening Western supply, and platinum inventories are down to roughly four months of demand cover.
The wild card is new Russian supply: Russian Platinum planned to begin production at its Arctic project this month, which could eventually add about 500,000 ounces of palladium and 200,000 ounces of platinum a year to Russian output.
Analysts can’t agree on the balance either. Nornickel expects a 300,000-ounce palladium surplus this year, while Heraeus/SFA forecast a 345,000-ounce deficit. Seasonally, both platinum and palladium have historically tended to strengthen from late December into the first quarter.
Metals got the clarity they needed. Central banks are buying, silver is in deficit, platinum supply is tight, and copper’s long-term story is intact. The risk is the Fed. Warsh isn’t done, and Friday’s jobs report will set the tone. Still, after the October washout, yesterday’s run looks more like the start of a bottom than a dead-cat bounce.
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Phil Flynn

Senior Market Analyst & Author of The Energy Report and Manic Metals Report

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