Gold reclaims $4,000 as dollar drops after US midterm vote

Gold prices jumped more than 2% during Wednesday's early trading to reclaim the $4,000-per-ounce threshold, with spot gold reaching $4,024 an ounce by 0738GMT as a weakening US dollar and declining Treasury yields boosted commodity markets. Silver posted even steeper gains, climbing nearly 4% toward $52 per ounce, according to trading data.

Dollar slides to five-week low

The US dollar index slipped below 101.5, touching its lowest point in five weeks, as markets absorbed the implications of the congressional vote. The yield decline reflected expectations that Democratic gains could constrain fiscal expansion while potentially altering the trajectory of monetary policy.

Gridlock fears weigh on markets

Markets were weighing the prospect of Democrats securing control of both the House of Representatives and the Senate, a scenario that could lead to legislative gridlock and limit President Donald Trump's ability to advance his economic agenda. Such an outcome might also curb federal expenditures while clearing the path for stricter artificial intelligence regulatory frameworks and intensified corporate oversight, potentially dampening broader growth projections.

Iran tensions loom

Investors were also monitoring the possibility of renewed US military action against Iran following the elections, as diplomatic negotiations between Washington and Tehran remained stalled. The developments came as bullion markets continued to price in geopolitical risk alongside the shifting domestic political landscape.