FX.co ★ Gold Heads for Strong Weekly Gain

Gold climbed toward $4,100 per ounce on Friday and was poised to gain more than 5% for the week, following a sweeping Democratic victory in the US midterm elections. Markets now expect Democrats to press for an end to the Iran conflict, a development that could push oil prices lower, ease inflationary pressures, and reduce the likelihood of more aggressive interest rate hikes. Investors also anticipate that a divided government may constrain President Donald Trump’s fiscal agenda, limiting additional government spending and borrowing and further tempering inflation concerns. At the same time, the global equity selloff intensified amid fears that Democrats could introduce stricter regulations on the artificial intelligence industry and slow data center expansion, triggering some liquidity-driven selling in precious metals. Even so, these headwinds were counterbalanced by stronger demand for safe-haven bonds, which pushed yields lower and bolstered appetite for non-yielding assets such as gold.