Gold traded above $4,000 an ounce Wednesday as reports linked the rally to a weaker U.S. dollar and investor concerns about the policy outlook after Democrats won control of both chambers of Congress.
Reuters reported spot gold at $4,041.60 per ounce, up 2.9%, at 9:18 a.m. ET (14:18 UTC) Nov. 4. It also put December U.S. gold futures at $4,051.80, a 2.8% gain. Reuters said the dollar fell to its lowest level in more than a month. Chris Weston, Pepperstone’s head of research, told Reuters that lower nominal and real U.S. Treasury yields were also supporting bullion.
For buyers using other currencies, a weaker dollar can reduce the local-currency cost of dollar-priced gold, Reuters reported. The Associated Press and Reuters reported Democrats won control of the House and Senate. The AP said vote counting continued in some races, while FXStreet said investors viewed the outcome as raising the risk of legislative gridlock, including on spending and debt-ceiling matters.
EconoTimes previously covered gold’s move above $4,000 ahead of a Federal Reserve decision.
Wednesday’s economic releases showed private-sector hiring and continued services-sector expansion. ADP’s October estimate showed private employers added 86,000 jobs; the organization revised September’s increase to 86,000 from 90,000. ADP’s measure is based on private payroll data and is separate from the government’s monthly employment report.
The Institute for Supply Management said its services purchasing managers index eased to 54.5 from 54.9 in September, remaining above 50 and in expansion territory. The U.S. Bureau of Labor Statistics (BLS) scheduled its October Employment Situation report for Friday, Nov. 6, at 8:30 a.m. ET.
