Gold prices soared nearly 3% on Wednesday, marking the largest single-day gain since mid-August. The surge came as the US dollar weakened following the Democrats' sweeping victory in the midterm elections. Investors are now focusing on the upcoming US nonfarm payrolls report for insights into future interest rate decisions.
Spot gold XAU= climbed 2.9% to $4,040.15 per ounce by 10:45 a.m. EST, while US gold futures for December delivery rose 2.8% to $4,049.00. The precious metal reclaimed the $4,000-an-ounce level after dropping to $3,869.85 on October 30, its lowest point since October 2025.
The Democrats' control of both the US Senate and House of Representatives sent the dollar to a one-month low. Analysts suggest the weaker dollar boosts gold's appeal by making it more affordable for overseas buyers. Jim Wyckoff of American Gold Exchange noted that a deadlocked Congress could negatively impact the US economy, potentially leading to easier monetary policy.
Inflation concerns and elevated oil prices, with Brent crude trading above $100 a barrel, also supported gold. Traders currently see an 83% chance of a Fed rate hike in December, which could increase the opportunity cost of holding non-yielding gold. The ADP National Employment Report showed private payrolls growth in October, with investors awaiting the nonfarm payrolls report for further monetary policy clues.
Other precious metals also saw gains, with spot silver XAG= up 4.2% to $51.88, platinum XPT= rising 4.2% to $1,475.98, and palladium XPD= climbing 7.1% to $999.50.