Gold climbed more than 1% to above $4,120 an ounce on Thursday, extending its post-election rally to the highest level since October 21. The move was driven by a weaker US dollar, which hovered near a one-month low, and by oil prices remaining below $100 a barrel, helping to ease inflation concerns.
The metal had already surged more than 3% on Wednesday—its strongest one-day gain since August 19—buoyed by falling energy prices, lower US Treasury yields, and diminishing worries about inflation and future interest rate increases.
The unexpected Democratic sweep of both the House and Senate added further pressure on the dollar and yields, as it reduces the probability of additional deficit-expanding measures under the Trump administration and may limit the risk of further escalation in the Iran war.
At the same time, futures markets are signaling roughly an 80% chance of a Federal Reserve rate hike in December, according to the CME FedWatch Tool. Investors are now focused on Friday’s US nonfarm payrolls report for further guidance on the economic outlook and monetary policy path.
