Gold prices jump 2.4% to $4,021 as US dollar weakens

US dollar falls to one-month low as Democrats secure control of Congress; silver gains 4% to $51.74 per ounce, while investors await US employment data Gold prices climbed more than 2% on Wednesday as the US dollar weakened to a one-month low following the Democrats' victory in the US midterm elections, with investors assessing the implications for government spending and the Federal Reserve's monetary policy. Spot gold rose 2.4% to $4,021.68 per ounce by 0718 GMT, while US gold futures for December delivery gained 2.3% to $4,031.20 per ounce. The rally followed Democrats securing control of both the Senate and House of Representatives, raising expectations of political gridlock between Congress and President Donald Trump's administration. The US dollar fell to its lowest level in a month, while Treasury yields also declined, supporting demand for gold. A weaker dollar makes the precious metal less expensive for buyers holding other currencies. Kyle Rodda, senior financial market analyst at Capital.com, said gold benefited from declining bond yields and the dollar as investors considered the possibility that disagreements between the executive branch and Congress could slow US government spending. Global equity markets also declined on Wednesday amid concerns that the Democratic victory could affect technology investment and spending on data centres, which have supported growth in artificial intelligence-related businesses. Chris Weston, head of research at Pepperstone, said demand for protection against uncertainty surrounding the Trump administration was also supporting gold purchases. Geopolitical developments remained another factor influencing the precious metals market, with uncertainty continuing over the US-Israeli war with Iran. A senior Iranian official told Reuters on Tuesday that Tehran and Washington remained far from an agreement to end the conflict, while Trump had not ruled out resuming US combat operations following the elections. Investors are now awaiting the US non-farm payrolls report scheduled for Friday, which could provide further indications about employment conditions and the Federal Reserve's future interest rate decisions. Meanwhile, the World Gold Council said on Tuesday that India's gold demand was expected to fall to a six-year low in 2026 as elevated prices reduced jewellery purchases and investment demand moderated. Other precious metals also recorded gains on Wednesday. Spot silver increased 4% to $51.74 per ounce, platinum rose 2.5% to $1,451.95, and palladium advanced 4.2% to $972.74 per ounce.