Gold Extends Gains Following US Midterm Elections

Gold prices climbed to a more than two-week high on Thursday, extending a rally that followed the US midterm elections. The advance came as the dollar and Treasury yields weakened, while oil prices remained below $100 per barrel, helping ease concerns about inflation.

Spot gold rose 1.4% to $4,117.69 per ounce by 1316 GMT after reaching an intraday high of $4,146.63, a level last recorded on October 20.

The move followed a nearly 3.4% gain on Wednesday, the metal’s strongest daily increase since August 19. Gold has advanced more than $250 this week after touching a one-year low of $3,869.85 on Friday.

US gold futures for December delivery also moved higher, gaining 1.3% to $4,127.40 per ounce.

Ole Hansen, head of commodity strategy at Saxo Bank, described precious metals as major beneficiaries of the US election outcome. He attributed the rally to lower energy prices, easing inflation and interest-rate concerns, declining Treasury yields and a weaker dollar. These conditions have also encouraged investors with recently established speculative short positions to cover their exposure.

Dollar Weakness and Lower Oil Prices Reinforce the Rally

The US dollar fell to its lowest level in more than a month, while Treasury yields reached multi-week lows. These developments provided additional support for gold, which is priced in dollars and therefore becomes less expensive for investors holding other currencies when the US currency weakens.

Oil prices also remained below $100 per barrel despite a recovery on Thursday. Brent crude had fallen nearly 9% on Wednesday amid expectations that major Democratic gains in the US elections could reduce the risk of further escalation in the Iran war.

Lower energy prices can ease inflationary pressure and reduce expectations that interest rates will remain elevated for longer. This combination has supported demand for precious metals by improving the broader market environment for non-yielding assets.

Rate Expectations and US Employment Data in Focus

Interest-rate expectations remain an important factor for gold markets. Traders currently see an 81% probability that the Federal Reserve will raise rates in December, according to CME’s FedWatch tool.

Investors are also awaiting Friday’s US non-farm payrolls report, which could provide further indications about the economy and the central bank’s policy direction.

In the United Kingdom, the Bank of England is widely expected to raise interest rates for the first time in three years on Thursday, taking a policy path already followed by its major peers.

Other Precious Metals Also Advance

The broader precious metals market recorded gains alongside gold. Spot silver increased 0.7% to $52.56 per ounce, while platinum rose 1.3% to $1,516.14. Palladium performed more strongly, climbing 3% to $1,034.62 per ounce.

What Investors Should Watch Next

Gold’s recent advance reflects the combined influence of currency movements, Treasury yields, energy prices and changing expectations for monetary policy. Friday’s US employment figures will be an important near-term indicator for investors assessing the Federal Reserve’s next decision.

The sustainability of the rally will also depend on whether the dollar and yields remain under pressure and whether lower oil prices continue to ease inflation concerns. Further changes in geopolitical risk could also influence energy markets and the demand for precious metals.