Gold Holds Above $4,000 as Dollar Weakens After US Midterm Results
Gold rose to around $4,038, up about 3% on the day, while the US dollar slipped following the midterm elections that gave Democrats control of Congress.
Gold (XAU/USD) stayed above $4,000 during U.S. trading hours on Wednesday, trading near $4,038, up roughly 3% for the day, as markets processed the midterm election outcome. The results gave Democrats control of both chambers of Congress, meaning the Trump administration will need Democratic backing to advance legislation, spending measures, tax changes or a debt-ceiling increase. The heightened political and fiscal uncertainty revived demand for the metal as a safe-haven asset and put pressure on the U.S. dollar, making gold cheaper for holders of other currencies.
The dollar index fell about 0.40% to around 101.45 after reaching an intraday low of 101.21, its lowest level since the end of September. US economic data offered mixed signals: the ADP employment report showed private-sector jobs rose by 86,000 in October, beating expectations, while the ISM Services PMI slipped to 54.5, still above the 50 threshold that signals expansion.
Traders see an 82% probability of a December rate hike, according to the CME FedWatch Tool, which could support the dollar’s decline. Market attention now shifts to upcoming U.S. employment reports, including weekly initial jobless claims and the non-farm payrolls due later in the week.
Technical analysis shows XAU/USD holding below the 20-day simple moving average and the middle Bollinger band at $4,074, with resistance near $4,253 and support around the $4,000 psychological level. A sustained move above the mid-Bollinger band could ease downside pressure, while stronger resistance remains near $4,400.