Gold surged about 2.6% to $4,035 an ounce on Wednesday, putting it on track for its largest one-day advance since mid-August, as the US dollar slumped after a sweeping Democratic victory in the midterm elections. Markets also turned their attention to this week’s US nonfarm payrolls report for additional signals on the policy outlook, following the Federal Reserve’s decision to leave interest rates unchanged in October.
The Democratic win, which delivered control of both chambers of Congress, pushed the dollar to its lowest level in more than a month as investors weighed the potential drag of tighter AI regulation on economic growth. At the same time, inflation worries remained elevated and oil prices stayed high, with traders awaiting Washington’s next steps in the US-Israeli war on Iran. According to the CME FedWatch Tool, markets are currently pricing in a 79% probability of a Federal Reserve rate hike in December.
