Gold prices rose over 2% on Wednesday, bolstered by a weaker US dollar after Democrats seized control of both the Senate and House in US midterm elections, while investors await non-farm payrolls data for clues to the Federal Reserve's policy path.
Spot gold climbed 2.4% to $4,021.68 per ounce by 0718 GMT, while US gold futures for December delivery rose 2.3% to $4,031.20.
"We've seen gold benefit from the fact that yields and the dollar have dropped, and that's because of this opinion that the gridlock that could emerge between the executive and the legislature in the US now could slow the amount of spending in the US," said Kyle Rodda, senior financial market analyst at Capital.com.
Global stocks slumped, and the dollar hit a one-month low on Wednesday as Democrats scored a decisive win in the US midterm elections, fuelling fears the Democratic sweep could disrupt the data-centre buildout that has powered the AI trade and hurt tech spending.
A softer dollar makes greenback-priced bullion more affordable for buyers overseas.
Additionally, "the demand for protection against a potentially more unpredictable and confrontational Trump administration looks to be providing a compelling backdrop for gold buyers," said Chris Weston, head of research at Pepperstone.
On the geopolitical front, Iran and the United States are still far from a deal to end their war, a senior Iranian official told Reuters on Tuesday, as US President Trump declined to rule out resuming US combat operations after the elections.
Markets now await the US non-farm payrolls report due on Friday.
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, the World Gold Council said on Tuesday.
Among other metals, spot silver gained 4% to $51.74, platinum rose 2.5% to $1,451.95 and palladium climbed 4.2% to $972.74. - Reuters
