Gold climbs above $4,050 as Democrats gain control of Congress
Gold rose over 3.6% to near $4,065 after Democrats took control of both houses of Congress, while the dollar slipped to a one-month low.
Gold price (XAU/USD) rose more than 3.6% to around $4,065 in early Asian trading on Thursday, marking its strongest gain since mid-August. The rally followed the Democratic Party’s sweep of the U.S. Senate and House of Representatives in the recent midterm elections, an outcome markets view as likely to increase political gridlock and limit further fiscal expansion.
The Democratic victory pushed the U.S. dollar down to a one-month low on Wednesday, making dollar-priced bullion cheaper for foreign buyers and boosting gold’s appeal. Traders will watch U.S. September employment data on Friday for clues about the Federal Reserve’s interest-rate outlook. The CME FedWatch tool currently shows about an 82.7% probability of a rate hike in December.
"More broadly, there is now a hope that a change in course could finally help fight inflation," said Joshua Kutin, Columbia Threadneedle’s head of multi-asset solutions for North America. "Oil is part of this, but more broadly the expectation is that high prices will be directly addressed by incoming politicians," he added.
Scotiabank analysts noted that gold’s near-3% daily gain lifted it back above the psychologically important $4,000 per ounce level, while silver rose about 5%. They attributed the advance to a weaker dollar and concerns over the U.S. fiscal outlook.
Technical analysis shows gold trading below its 20-day and 100-day simple moving averages, indicating a bearish near-term bias. The Relative Strength Index around 48 suggests neutral momentum. Immediate resistance lies near $4,075, with further levels at $4,205 and $4,255. Support is expected around $3,900, below which a deeper correction could develop.