Gold rallied 1.5% in October to $1,786 per ounce (oz) and advanced above the $1,800/oz level multiple times late in the month and into early November. Gold’s positive return in October marked a reversal to its weaker performance in the previous two months, according to the World Gold Council. This performance is consistent with historical analysis that suggests that gold does well in early autumn.

Gold price strength happened amid higher nominal yields: gold had been generally inversely correlated with nominal bond yields this year. However, a rise in inflation expectations outweighed the move in nominal rates and resulted in lower real rates, the World Gold Council said. Additionally, risk-on sentiment didn’t curtail the gold price strength, as many stock indices closed at all-time highs with the U.S. and Europe up 5%-8% across major markets, while Asian markets were relatively flat to slightly lower, particularly with weak Chinese economic data released throughout the month. Commodities were stronger, led by oil, up 12% on the month. Individual commodity supply constraints remain a focus for investors, which is a meaningful driver for recent performance.

Gold’s net long positioning on Comex futures rose during the month to $40 billion (equivalent to 701 metric tons) from $31 billion (537 mt) the month before — the highest levels since late August. This could have been a factor in gold price support, particularly from the investment side, as the bulk of the increase came from managed money positioning.

From a technical analysis perspective, $1,800/oz has been a “sticky” level, with regular price reversals to that level on both strength and weakness. The price has struggled to hold above the 200-day moving average, which currently sits just below that $1,800/oz level. If the price were to hold above $1,800/oz more consistently, the next resistance level would move up to $1,875/oz, or 5% higher from current levels, as the downtrend would be broken.