Gold Hits Two-Week High Above $4,130 as Dollar and Oil Slide After Midterms

Spot gold climbed 1.7% to $4,130.27 an ounce Thursday, a more than two-week high as the dollar and oil prices slid after the midterms.

Prices hit a session high of $4,146.63, a level last seen Oct. 20, CNBC reported. December U.S. gold futures rose 1.6% to $4,139.60 an ounce.

Gold jumped nearly 3.4% Wednesday, its sharpest daily gain since Aug. 19. Prices are up more than $250 this week from a one-year low of $3,869.85 hit Friday.

The rebound marks a sharp turn from last week’s selloff and lifts bullion well clear of the $4,000 level that had drawn heavy attention earlier in the week.

“Precious metals have emerged as major winners following the US elections,” Ole Hansen, head of commodity strategy at Saxo Bank, told CNBC.

“The powerful combination of falling energy prices, easing inflation and interest rate concerns, and declining Treasury yields and the dollar has forced recently established speculative shorts to cover,” Hansen said.

Brent crude traded below $100 a barrel after diving nearly 9% Wednesday on hopes that Democratic midterm gains could curb further escalation in the Iran war, CNBC reported.

U.S. crude and Brent had posted their biggest daily drops since April on Wednesday as traders priced a faster path toward de-escalation, in earlier CNBC coverage.

The U.S. dollar and Treasury yields sat at multi-week lows Thursday. A weaker dollar makes gold cheaper for buyers holding other currencies, supporting demand for the metal.

Lower energy prices also ease inflation concerns and reduce bets on higher-for-longer interest rates, a backdrop that has historically favored nonyielding assets such as gold.

Short covering amplified the move after speculative traders had leaned against the metal near last week’s lows, Hansen said in his remarks to CNBC.

Payrolls Report Next

Investors are awaiting Friday’s U.S. nonfarm payrolls report for fresh clues on the Federal Reserve’s path.

A softer jobs print could reinforce bets on easier financial conditions, while a hot report might firm yields and pressure bullion.

The Bank of England was widely expected to raise rates Thursday for the first time in three years, joining peers that have already moved higher, CNBC reported.

Even so, the gold bid remained firm as traders focused on U.S. yields, the dollar and oil rather than overseas policy moves.

Wall Street also cheered the midterm outcome with a broad equity rally Wednesday, betting that divided government would mean policy gridlock, CNBC reported.

That same election aftermath is now feeding through commodity markets via cheaper energy, a softer dollar and falling Treasury yields.

Traders will watch whether those supports hold as markets digest the shift in Washington and await the Friday payrolls data.

For now, gold’s push above $4,130 puts the metal at its strongest levels since mid-October and caps a more than $250 rebound in less than a week.

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