Gold Prices Rise on Weaker US Dollar Following Early US Midterm Election Results

Gold prices edged higher on Wednesday, supported by a softer US dollar following early Democratic wins in the US midterm election results. Spot gold rose 0.5 per cent to $3,947.49 per ounce by 0415 GMT, while US gold futures for December delivery increased by 0.5 per cent to $3,958.00.

Market analysts pointed to macroeconomic indicators driving the movement. Chris Weston, head of research at Pepperstone, stated that a weaker US dollar alongside a decline in nominal and real US Treasury yields provided support for gold. Weston also noted that demand for protection against a potentially unpredictable and confrontational administration provided a compelling backdrop for buyers.

Concurrently, US stock futures slumped, Treasuries rallied, and the dollar softened as Democrats notched early Senate wins, presenting a setback to President Donald Trump and Republicans. On the geopolitical front, a senior Iranian official stated on Tuesday that Iran and the United States remain far from a deal to end their war, while Trump declined to rule out resuming US combat operations following the elections.

Investors are now looking ahead to the US non-farm payrolls report due on Friday for further clues regarding the Federal Reserve's policy path. Traders currently see a 78 per cent chance that the Fed will raise rates in December, according to CME's FedWatch tool, noting that higher interest rates typically increase the opportunity cost of holding non-yielding bullion.

Matt Simpson, senior market analyst at StoneX, remarked that $4,000 serves as an obvious resistance level, and a break on either side of that range could dictate gold's next significant move.

In broader commodity updates, the World Gold Council (WGC) stated on Tuesday that India's gold demand is expected to fall to a six-year low in 2026 as elevated prices weigh on jewellery sales and investment demand moderates. Among other precious metals, spot silver fell 0.8 per cent to $49.38, platinum slipped 1.2 per cent to $1,399.72, and palladium dropped 0.2 per cent to $932.07.

"Global macroeconomic shifts, currency fluctuations, and political outcomes continue to directly influence commodity markets and investor sentiment. For businesses and investors navigating cross-border trade, keeping a close eye on treasury yields, central bank rate expectations, and regional demand forecasts—such as the projected trends in India's gold consumption—remains critical for effective risk management." — Dr. Shishir Gupta, Founder & CEO, StartupLanes