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Gold Reclaims US$4,000 and Keeps Running as Midterms Knock the Dollar Off Its Perch

Bullion climbs about 1.9% to a two-week high near US$4,135 on Thursday, extending Wednesday's biggest one-day gain since August as the dollar and Treasury yields retreat

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Gold Reclaims US$4,000 and Keeps Running as Midterms Knock the Dollar Off Its Perch

Washington changed hands, and gold changed gears. Barely 48 hours after American voters handed Democrats control of both chambers of Congress, bullion has put together its sharpest two-day run in months, reclaiming the US$4,000 line on Wednesday and pressing on to a two-week high on Thursday.

Spot gold rose 1.9% to US$4,134.83 an ounce by 03:16 GMT on Thursday, its highest level since October 22, Reuters reported, while December US gold futures gained 1.8% to US$4,144.20. By 7:12 a.m. ET, Kitco News had spot gold at US$4,128.54, still up 1.74% on the day. That comes on top of a roughly 3.4% gain on Wednesday, the metal's biggest daily advance since August 19. Silver came along for the ride: spot silver added 1.7% to US$53.12 early Thursday after jumping 4.8% on Wednesday, with platinum up 2.1% to US$1,527.65 and palladium up 2.6% to US$1,030.14.

The engine is the familiar one: a softer dollar and falling yields. The US 10-year Treasury yield fell six basis points overnight and another basis point in early Tokyo trade to 4.87%, according to Reuters, and a weaker greenback makes dollar-priced bullion cheaper for buyers holding other currencies. The election result also cleared a major source of uncertainty off the table. Hamad Hussain, senior climate and commodities economist at Capital Economics, told Reuters the vote lifted gold as investors "become more worried about the fiscal outlook." Jim Wyckoff of American Gold Exchange told Reuters a gridlocked Congress would likely weigh somewhat on the US economy and could give the Federal Reserve room to ease.

Even a central bank tightening across the Atlantic could not knock the metal off course. The Bank of England raised its Bank Rate by a quarter point to 4% on Thursday, a widely anticipated move as it projects UK inflation climbing to around 5% by mid-2027 on elevated energy prices tied to the Middle East conflict. Kitco News reported that gold saw only modest selling pressure after the decision and held above key support levels.

The street is starting to talk targets again. Analyst Linh Tran told Reuters that if investment flows and yields stay supportive, "gold could stabilise above USD 4,000," with US$4,200 and then US$4,400 as possible recovery levels. Citi holds a zero-to-three-month price target of US$4,500 an ounce, Reuters reported, and sees substantial upside if the Strait of Hormuz reopens and the Yemen/Saudi conflict eases by year-end.

For junior miners, a gold price back above US$4,000 is the difference between a good story and a financeable one, and the Venture market noticed. In Wednesday's session, as bullion posted its biggest gain since August, Minaurum Gold Inc. (TSXV: MGG) rose 29.23% to C$0.25, Dryden Gold Corp. (TSXV: DRY) gained 20.69% to C$0.18 and Spanish Mountain Gold Ltd. (TSXV: SPA) added 17.95% to C$0.23, according to Investcom's TSX Venture gainers list. Omai Gold Mines Corp. (TSXV: OMG) climbed 13.42% to C$1.69, and even producer Artemis Gold Inc. (TSXV: ARTG) rose 11.19% to C$39.05. On the CSE, Four Nines Gold Inc. (CSE: FNAU) jumped 23.81% to C$0.26, G3 Goldfields Inc. (CSE: GTRE) gained 18.75% to C$1.33 and Emperor Metals Inc. (CSE: AUOZ; OTCQB: EMAUF) rose 11.43% to C$0.39. Thursday's closing tallies were not yet available at the time of writing.

Not every metal joined the party. Copper traded around US$6.26 a pound on Thursday, down about 2.2% on the day, as a renewed selloff in artificial intelligence-related stocks dented demand expectations tied to data centres and power grids, Trading Economics reported, a reminder that gold's safe-haven bid and the industrial metals trade are running on different fuel this week.

Now the caveat. Traders still price an 82% chance of a Federal Reserve rate hike in December, according to CME's FedWatch tool as cited by Reuters, and higher rates raise the opportunity cost of holding a metal that pays no yield. Friday's US nonfarm payrolls report is the next test: Daniel Ghali, head of metals research at Deutsche Bank, told Reuters that "a strong print may corroborate existing market expectations for Fed hikes." Hussain also warned that "continued weakness in tech stocks could also weigh on gold prices." A two-week high is not a record, and thinly traded juniors that sprint on one day's macro headline can give it back just as quickly.

Sources

Disclaimer

Neither the author of this article nor JuniorStocks holds equity, stock options, or any other financial positions in any of the companies mentioned in this publication. This content is published by JuniorStocks strictly for informational purposes, was prepared independently without company compensation, and utilized AI assistance for text editing, formatting, and generating accompanying media. While gold's post-midterm surge back above US$4,000 represents a compelling story for resource investors, this article does not constitute investment or financial advice. Commodity prices are volatile, and investors are strongly advised to conduct their own thorough, independent due diligence and consult with a qualified financial professional before making any investment decisions.

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