Gold Rises as Dollar Falls on Midterm Results
Gold prices climbed more than 2% to reclaim the $4,000 an ounce level on Wednesday, supported by a weaker US dollar and falling Treasury yields after Democrats secured key victories in the US midterm elections. Markets interpreted the results as potentially increasing the likelihood of political gridlock in Washington and limiting prospects for further fiscal expansion. The dollar fell to a four-week low, while Treasury yields declined across the curve, boosting the appeal of non-yielding bullion. Meanwhile, lingering uncertainty surrounding US-Iran negotiations continued to cloud the geopolitical outlook, with Washington and Tehran still far from reaching a deal to end their conflict. Investors also turned their attention to Friday's US nonfarm payrolls report for further clues on the Federal Reserve's policy outlook. Markets currently price in a 79% chance of a Fed rate hike in December, according to CME’s FedWatch Tool.
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Gold prices climbed more than 2% to reclaim the $4,000 an ounce level on Wednesday, supported by a weaker US dollar and falling Treasury yields after Democrats secured key victories in the US midterm elections. Markets interpreted the results as potentially increasing the likelihood of political gridlock in Washington and limiting prospects for further fiscal expansion. The dollar fell to a four-week low, while Treasury yields declined across the curve, boosting the appeal of non-yielding bullion.
Meanwhile, lingering uncertainty surrounding US-Iran negotiations continued to cloud the geopolitical outlook, with Washington and Tehran still far from reaching a deal to end their conflict. Investors also turned their attention to Friday's US nonfarm payrolls report for further clues on the Federal Reserve's policy outlook. Markets currently price in a 79% chance of a Fed rate hike in December, according to CME’s FedWatch Tool.