Gold prices climbed on Wednesday, buoyed by a weaker U.S. dollar as investors awaited the results of the U.S. midterm elections. Spot gold rose 0.1% to $3,931.24 per ounce, while U.S. gold futures for December delivery held steady at $3,941.40. Analysts attributed the rise to a softer dollar and declining U.S. Treasury yields, which typically support gold's appeal.
Chris Weston, head of research at Pepperstone, noted that a weaker dollar and lower Treasury yields were key drivers for gold. He also highlighted growing demand for gold as a hedge against potential political uncertainty under a Trump administration. Meanwhile, U.S. stock futures dipped, Treasuries gained, and the dollar softened as Democrats secured early Senate wins, raising hopes they might take control from President Donald Trump's Republicans.
Geopolitical tensions added to the market's cautious mood, with Iran and the U.S. still far from ending their conflict. Traders priced in a 78% chance of a Federal Reserve rate hike in December, which could weigh on gold due to its non-yielding nature. The upcoming U.S. non-farm payrolls report on Friday is expected to provide further clarity on the Fed's policy direction.
Matt Simpson, senior market analyst at StoneX, identified $4,000 as a critical resistance level for gold, suggesting a break above or below this price could signal the next major move. Meanwhile, India's gold demand is projected to hit a six-year low in 2026, as high prices dampen jewelry sales and investment demand. Other precious metals saw declines, with silver dropping 1.3%, platinum slipping 1.9%, and palladium falling 0.6%.