Spot gold rose about $100 to $4,029 an ounce during the afternoon of November 4 as the US dollar weakened. VnExpress, citing Reuters, linked the market reaction to reports that Democrats had taken control of Congress following the November 3 midterm election.
Analysts assess the political backdrop
Capital.com analyst Kyle Rodda said lower US Treasury yields and a weaker dollar were helping gold. In his assessment, investors were considering whether disagreement between the administration and Congress could restrain public spending.
The dollar was near a one-month low. A weaker US currency makes dollar-priced gold cheaper for buyers using other currencies, providing one channel through which exchange-rate movements affect demand.
Pepperstone research director Chris Weston also pointed to stronger demand for protection against risk. His comments focused on uncertainty over US policy and the possibility of a less predictable response from the administration after the election.
Other metals rise as jobs data approaches
Silver and palladium gained about 4%, while platinum increased 2.5%. The simultaneous moves extended the afternoon rally beyond gold.
Physical demand showed a different picture in India. VnExpress relayed World Gold Council information that demand there was at its lowest level in six years, with elevated prices weighing on both investment purchases and jewellery.
Investors were looking ahead to the US non-farm payrolls report for further evidence relevant to Federal Reserve policy. Employment data joins the dollar, bond yields and political expectations among the factors being watched after the sharp price move.