Gold Poised to Break Nine-Week Winning Run

Gold climbed around 2.6% to $4,035 an ounce on Wednesday, putting it on track for its biggest daily gain since mid-August, as the US dollar tumbled following a sweeping Democratic victory in the midterm elections. Investors also looked ahead to this week’s US nonfarm payrolls report for further guidance on the policy outlook, following the Federal Reserve’s decision to leave interest rates unchanged in October. The Democratic victory, which secured control of both chambers of Congress, sent the dollar to a more than one-month low as investors assessed the potential impact of tighter AI regulation on economic growth. Meanwhile, inflationary concerns persisted and oil prices remained elevated as markets awaited Washington’s next move in the US-Israeli war on Iran. Traders currently see a 79% probability of a Federal Reserve rate hike in December, according to the CME FedWatch Tool.

Gold prices climbed more than 2% to reclaim above $4,000 an ounce level on Wednesday, supported by a weaker US dollar and falling Treasury yields after Democrats secured key victories in the US midterm elections. Markets interpreted the results as potentially increasing the likelihood of political gridlock in Washington and limiting prospects for further fiscal expansion. The dollar fell to a four-week low, while Treasury yields declined across the curve, boosting the appeal of non-yielding bullion. Meanwhile, lingering uncertainty surrounding US-Iran negotiations continued to cloud the geopolitical outlook, with Washington and Tehran still far from reaching a deal to end their conflict. Investors also turned their attention to Friday's US nonfarm payrolls report for further clues on the Federal Reserve's policy outlook. Markets currently price in a 79% chance of a Fed rate hike in December, according to CME’s FedWatch Tool.

Gold prices rose to around $3,950 an ounce on Wednesday, supported by a weaker US dollar and falling Treasury yields as early US midterm results pointed to Democrats gaining ground in both chambers of Congress. Markets interpreted the results as potentially increasing the likelihood of political gridlock in Washington and limiting prospects for further fiscal expansion. Meanwhile, easing oil prices amid hopes of continued US-Iran diplomacy helped alleviate inflation concerns, although Tehran and Washington remained far from a deal to end their conflict. President Donald Trump also declined to rule out renewed US military operations following the elections. Separately, investors awaited Friday's US nonfarm payrolls report for further clues on the Federal Reserve's policy outlook. Markets currently price in a 78% chance of a Fed rate hike in December, keeping expectations of restrictive monetary policy a potential headwind for non-yielding metals.