Gold Jumps 3% to $4,041 an Ounce as Dollar Slides After Democratic Sweep
Gold rose above $4,000 as the dollar weakened after the election, with the metal holding near that level during morning trading.
Gold climbed above $4,000 an ounce Wednesday as the dollar weakened following Democrats' victories in the U.S. midterm elections.
Spot gold rose 2.9% to about $4,041 an ounce in a morning market update at 9:29AM Eastern. The dollar was down roughly 0.5% in that report.
Prices continued to move during the session. A 10:14AM Eastern update put gold around $4,038 an ounce, up nearly 3% on the day. The U.S. Dollar Index was around 101.45, down 0.4%, after touching its lowest level since September 30. These are intraday readings, not closing prices.
Democratic control of both chambers of Congress sets up divided government in Washington. Investors were weighing what that could mean for President Donald Trump's plans for taxes, spending and other legislation.
A weaker dollar can support gold by making dollar-priced bullion less expensive for buyers using other currencies. Lower Treasury yields can also help a metal that does not pay interest.
The rebound does not remove the risks facing precious metals. High energy costs and inflation concerns could keep interest rates elevated, which can make non-interest-bearing assets less attractive. Gold prices can change quickly as traders react to economic data, central-bank decisions and political developments.