Precious metals surged on Tuesday morning following the U.S. midterm elections, with the dollar weakening as Democrats took control of Congress. Spot gold climbed 2% to $4,005.40 per ounce, while spot silver jumped 4% to $51.68 per ounce. Gold futures rose 2.2% to $4,020.60, and silver futures gained 3.8% to $51.53. Other metals like platinum and palladium also saw significant gains, up 3.3% and 3.8% respectively.
The market reaction came as vote counting continued, with Democrats projected to win the House and several governors' offices. U.S. stock futures fell, Treasury yields dropped, and the dollar index declined by 0.3%. Analysts noted that Democratic control could lead to fiscal uncertainty, supporting gold prices. Rhona O'Connell of StoneX suggested that a weaker dollar and geopolitical tensions would compete with the Fed's hawkish stance.
Gold and silver had record rallies in 2025, rising 66% and 135% respectively, but lost momentum this year due to inflation and higher bond yields. Gold is down over 7% year-to-date, while silver has fallen nearly 28%. Daniela Hathorn of Capital.com cautioned that the recovery remains fragile, as investors balance geopolitical risks with restrictive monetary policies.