- Precious metals rallied on the election result. Spot gold was 2.7% higher at $4,036.02 an ounce by 10:02 a.m. ET on Wednesday, while spot silver jumped 4.7% to $52.11. Front-month gold futures added 2.7% to $4,048.30 and silver futures rose 4.8% to $52.15.
- The rally was broad across the complex. Platinum jumped 4.4% to $1,478.35 and palladium was 6.5% higher at $994.25, as Democrats were projected to win control of the House and multiple governors’ offices turned blue.
- A weaker dollar and lower yields provided the tailwind. The US dollar index shed around 0.4%, Treasury yields moved lower and oil declined, while US stocks surged as political risk eased. StoneX’s Rhona O’Connell had said that if Democrats won control of both chambers, gold should find support as rates and the dollar would likely come under pressure.
- The bounce comes after a rough year. Gold and silver surged 66% and 135%, respectively, in 2025, but rising inflation, surging bond yields and hawkish central banks have removed support this year, leaving gold down more than 6% year to date and silver down around 26%.
What Happened?
Gold, silver, platinum and palladium all posted strong gains on Wednesday as vote counting continued in the US midterm elections and Democrats took control of Congress. Spot gold rose 2.7% to $4,036.02 an ounce and spot silver gained 4.7% to $52.11 by mid-morning in New York. The dollar index fell about 0.4%, and Treasury yields slipped. StoneX’s O’Connell said a Democratic Congress would bring “fiscal brinkmanship, institutional friction, both leading to uncertainty.”
Why It Matters?
Divided government shifts the fiscal outlook: O’Connell said “less fiscal stimulus argues for lower long yields and a softer dollar,” both supportive for non-yielding metals, though she noted this is “offset by debt-limit premia in bills and a Fed leaning towards another hike.” That tension is the core of the trade. Metals have struggled in 2026 because high real yields and hawkish central banks raise the cost of holding bullion, so a durable recovery needs the rate backdrop to ease, not just a political shock.
What’s Next?
Capital.com’s Daniela Hathorn warned the recovery remains fragile, saying geopolitical uncertainty “is not automatically translating into safe-haven demand when investors are also concerned about restrictive monetary policy.” She also flagged the risk that metals get liquidated during sharp equity sell-offs as investors raise cash. Traders will watch the dollar, Treasury yields and Fed rhetoric on further hikes, along with the coming debt-limit fight, to judge whether gold can hold above $4,000.
Affected Tickers and Coins: GLD, SLV, PPLT, PALL, UUP
Source: CNBC
