Gold climbed above $4,000 an ounce on Wednesday as the US dollar weakened following the midterm elections. US equity futures pared steep overnight losses, though they still pointed to a mostly lower Wall Street open. Democrats won control of both chambers of Congress, leaving Republican President Donald Trump facing a divided government.
Spot gold was up 2.4% at $4,021.68 an ounce at 07:18 GMT, while silver gained 4% to $51.74, Reuters reported. Investors were also watching for US employment data for clues about the Federal Reserve’s next move.
IG sees demand for precious metals as investors reassess policy risk
Axel Rudolph, chief technical analyst at IG, said the Republican losses raised questions about how much of Trump’s agenda the White House could advance over the next two years. He attributed the pressure on the dollar and the strength in gold and silver to investors reassessing political risk and seeking assets they view as havens.
Chris Beauchamp, chief market analyst at IG, noted that US equity futures had recovered some ground after the initial sell-off. In his view, investors were beginning to weigh how a divided government could constrain policy changes, even as parts of the technology sector remained under pressure.
Texas governor’s race draws attention to AI infrastructure
In Texas, US media projected that Democrat Gina Hinojosa defeated Republican Governor Greg Abbott. Beauchamp said the result added uncertainty for investors following data-centre development in the state.
He pointed to early weakness in AI infrastructure names such as CoreWeave and Nebius, followed by a partial recovery. His concern was that investors could start pricing in the possibility of policy changes alongside existing questions about how much the sector is spending to build out computing capacity.
Sources: IG market commentary, Reuters market data, Associated Press election coverage, MarketWatch futures coverage and Reuters Texas election coverage.
