Gold surges past $4,130 as US election sends dollar, Treasury yields tumbling

Gold prices extended their rally on Thursday, climbing above $4,130 an ounce as the Democratic election victory continued to weigh on the U.S. dollar and Treasury yields, boosting demand for the precious metal.

At 23:55 ET (04:55 GMT), spot gold surged 1.9% to $4,138.51 an ounce, while U.S. gold futures gained 1.8% to $4,147.59. Silver advanced 1.6% to $53.0750 an ounce, while platinum climbed 2% to $1,529.40. Spot palladium rose 2.3% to $1,030.54, while palladium futures gained 2.2% to $1,026.75. The U.S. dollar Index fell 0.3% to 101.27.

The Democratic election victory, which dealt a setback to the Trump administration, triggered a broad decline in U.S. bond yields and the dollar. Treasury yields fell across maturities on Wednesday and extended their retreat on Thursday, while the greenback lost 0.4% in the previous session before weakening further.

Lower yields support gold because it does not pay interest, while a softer dollar makes bullion more affordable for international buyers.

ANZ analysts said U.S. bonds also benefited from expectations that the new political balance would constrain Trump’s proposed tax cuts and spending plans.

However, they cautioned that government borrowing has been a significant source of support for gold over the past year, meaning restrictions on fiscal expansion could weaken one of the factors underpinning bullion’s longer-term appeal.

Oil prices remained sharply lower after Brent crude dropped below $100 a barrel on Wednesday for the first time since early October. Trump played down the possibility of renewed strikes against Iran following the election setback, helping ease fears of further escalation and energy supply disruptions.

Gold’s recovery marks its strongest break yet from a months-long decline, although the metal remains more than 20% below its levels before the U.S.-Iran war erupted in late February.

The conflict drove energy costs higher and fuelled inflation, prompting tighter monetary policy that weighed on non-yielding bullion.

Investors will now look to Friday’s U.S. nonfarm payrolls report for fresh evidence on economic conditions and the interest-rate outlook. Signs that inflation is moderating could give the Federal Reserve greater flexibility to ease monetary policy, potentially providing further support to gold.