NEW YORK, United States / AsiaWire.IO / – Spot gold hit a two-week high on Thursday, extending a sharp rally as the US dollar and Treasury yields eased after Democrats made major gains in the US midterm elections. Gold rose 1.9% to $4,134.83 an ounce in Asian trading, its highest since October 22. The metal had jumped 3.4% to $4,061.30 on Wednesday, its biggest one-day rise since August 19. Silver surged 5.1% to $52.29 on Wednesday.
Front-month gold futures settled 3.4% higher at $4,073 on Wednesday, while silver futures added 5.1% to $52.28. The US dollar index fell around 0.3% as vote counting continued. Democrats were projected to have won control of the House of Representatives, and several governors’ offices turned blue. US stocks surged as political risk eased, while oil prices declined. Treasury yields also moved lower.
By Thursday, silver had gained another 1.7% to $53.12 an ounce. Platinum rose 2.1% to $1,527.65 and palladium climbed 2.6% to $1,030.14. The 10-year Treasury yield slipped to 4.87%. US gold futures for December delivery rose 1.8% to $4,144.20. Citi has said gold could reach $4,500 an ounce within three months. Linh Tran, a market analyst at XS.com, said gold could stabilize above $4,000 and open a path toward $4,200.
Analysts weigh political outlook
StoneX’s Rhona O’Connell said before the results that Democratic control of both chambers should support gold, as rates and the dollar would likely come under pressure. She warned of “fiscal brinkmanship, institutional friction, both leading to uncertainty.” She said the Iran war and a weaker dollar would compete with the impact of a hawkish Fed. Lower fiscal stimulus would favor lower long yields and a softer dollar, she added. That would be partly offset by debt-limit premiums in Treasury bills.
The US Federal Reserve kept rates at 3.75% to 4.00% last week, and two officials backed an immediate hike. Traders see an 82% probability of a December increase, according to the CME FedWatch tool. Higher rates tend to weigh on gold, which pays no interest. The metal has been sensitive to Fed decisions throughout the year. US nonfarm payrolls data due on Friday is the next major test for the rate outlook.
A fragile recovery for metals
Gold and silver posted record-breaking rallies in 2025, rising 66% and 135% respectively as investors sought safe havens. This year has been tougher, with rising inflation, climbing bond yields and hawkish central banks pulling support. Gold remains down more than 6% year to date, and silver has fallen around 26%. The midterm rally has narrowed some of those losses.
Capital.com senior market analyst Daniela Hathorn said the rebound remains fragile. Geopolitical uncertainty is not automatically lifting safe-haven demand when investors also fear restrictive monetary policy, she said. Metals also risk being sold during sharp equity selloffs as investors raise cash. In such episodes, investors tend to sell profitable or liquid positions, she said. Energy markets add to the uncertainty after Brent topped $115 a barrel last week.