Gold climbs to two-week high near $4,124 after US midterm results

Gold reached its highest level in over two weeks on Thursday, with spot metal rising 1.6% to $4,123.71 per ounce by 0609 GMT after touching its strongest point since October 20 earlier in the session, BusinessLine reported. The move followed a weaker US dollar and softer Treasury yields after Democrats made major gains in the US midterm elections.

US gold futures for December delivery rose 1.5% to $4,133.00. Bullion had already climbed about 3.4% on Wednesday, its largest single-day gain since August 19, according to BusinessLine.

Also read: Gold Holds 4,000-4,120 Support as Fed Hike Odds Reach 82.8%

Key facts

• Spot gold gained 1.6% to $4,123.71 an ounce by 0609 GMT, its highest since October 20.
• On the MCX, Mint reported gold rose 2.5% to an intraday high of ₹1,42,957 per 10 grams, while silver jumped more than 4% to ₹1,87,422 per kg.
• Spot silver added 0.8% to $52.61, platinum rose 1.5% to $1,519.90 and palladium climbed 1.3% to $1,017.54.
• Citi set a 0-3 month price target of $4,500 per ounce for gold, citing upside if the Strait of Hormuz reopens and the Yemen/Saudi conflict de-escalates by year-end.

Dollar, yields and oil drive the move

The dollar extended its decline after Democrats’ overwhelming midterm victory, which also pushed oil prices sharply lower. A softer dollar makes dollar-priced bullion cheaper for buyers holding other currencies. Oil fell for a fourth straight day as traders weighed expectations that losses suffered by President Donald Trump’s Republican Party could reduce the risk of further escalation in the US-Israeli war on Iran.

Cheaper energy eases inflation pressure, which in turn lowers expectations that the Federal Reserve will keep rates higher for longer — a backdrop that tends to favour gold, which pays no interest.

Also read: Midterm Elections Could Reshape Scrutiny of Crypto, Defence and AI

Linh Tran, Market Analyst at XS.com, said the weaker dollar and lower yields had helped gold recover above the key $4,000 level, though holding above that threshold remains important for the recovery outlook. Tran added that continued support from investment flows and yield movements could let gold stabilise above $4,000 and open a path toward $4,200 and then $4,400.

The rally follows a difficult stretch. Mint reported that gold fell almost 7% in October and slipped below $4,000 an ounce late in the month, and had lost more than a fifth of its value since the US-Iran conflict began in late February as inflation fears raised expectations of tighter monetary policy.

Indian equities extend their run

Mint reported that Indian stocks gained for a fifth consecutive session after Trump’s midterm defeat. The Nifty 50 closed at 23,960.60, up 149.75 points or 0.63%, while the Sensex settled at 77,301.40, a gain of 383.55 points or 0.50%, with midcap and smallcap buying strengthening market breadth.

Vinod Nair, Head of Research at Geojit Investments, said the US election outcome improved global sentiment and could support foreign institutional flows into emerging markets, adding that optimism over possible tax relief in the upcoming Union Budget, better-than-expected quarterly earnings and resilient festive consumption added momentum. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said the Nifty had moved above its 200-day exponential moving average near 23,900 and that the next upside to watch was around 24,300-24,400, with support near 23,700.

The two reports differ in emphasis on the size of the international move: Mint described bullion advancing as much as 2.5% to near $4,030 an ounce on Wednesday, its biggest intraday gain since August, while BusinessLine put Wednesday’s close-to-close gain at about 3.4%. They also differ on the dollar’s move, with Mint reporting a fall of as much as 0.4%, its steepest in two months. Coinpedia noted that prediction markets had put nearly an 80% chance on a Democratic sweep before voting, and flagged that a new Congress would not take office until next year.

Why it matters

The result changes the political backdrop for both metals and equities: a Congress controlled by Democrats is seen as limiting the administration’s room for a deficit-expanding agenda, which affects Treasury yields and the dollar. For Indian investors, the combination of a softer dollar, lower yields and steadier crude is supportive for gold holdings and for foreign flows into domestic stocks.

What to watch

Traders now await Friday’s US nonfarm payrolls report for a read on the Federal Reserve’s policy path, while the gold outlook stays tied to West Asia, where Washington and Tehran were reviewing fresh proposals from mediators.

The price levels and targets discussed above are analyst views, not financial advice; precious metals and equity markets are volatile and can move against expectations.

Written by

StockPil Editorial

The StockPil Editorial desk covers stock markets, business, finance, forex and crypto. Our AI-assisted newsroom builds each article from published, linked sources, checks it for accuracy before it goes live, and our editors review published articles and correct anything that needs it.

Sources: BusinessLine, Mint, Coinpedia