Gold prices moved higher on Wednesday, breaking above $4,000 an ounce as a weaker US dollar and falling Treasury yields supported demand for the precious metal following the US midterm election results.
Spot gold rose 2.4% to $4,021.68 an ounce, while US gold futures gained 2.3%. The gains followed a decisive Democratic victory, which increased political uncertainty and strengthened demand for gold as a safe-haven asset.
Lower oil prices had also supported gold earlier in the session by easing inflation concerns and expectations that the Federal Reserve may need to maintain higher interest rates.
Attention is now turning to Friday’s US non-farm payrolls report, which could provide further indications of the Federal Reserve’s interest rate outlook.
However, geopolitical uncertainty remains, with negotiations between the US and Iran yet to produce an agreement.
From a technical perspective, IG highlighted the $4,050 level as an important resistance area for gold, with the market’s ability to sustain its recovery likely to remain in focus.
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