TradingKey - On November 4, gold prices (XAUUSD) surged during the Asian trading session. As the Democratic Party won the U.S. midterm elections, the U.S. Dollar Index and U.S. Treasury yields weakened in tandem, driving gold back above $4,000, reaching an intraday high near $4,029. Based on today's low of $3,919.85, the intraday rebound approached $110.
Gold Price Daily Chart, Source: TradingView
From a fundamental perspective, the U.S. midterm election results became the core driver behind the gold rebound. According to the Associated Press, the Democratic Party won control of both the Senate and the House of Representatives in this election, while the Republican Party lost its congressional majority. This outcome means that the Trump administration's domestic legislative agenda over the next two years—including fiscal spending, tax policies, and certain economic measures—may face greater congressional resistance.
Following the release of the election results, the U.S. Dollar Index fell by approximately 0.38%, while U.S. Treasury yields pulled back in tandem. A weaker dollar reduced the cost of purchasing gold for holders of other currencies, while falling Treasury yields lowered the opportunity cost of holding non-yielding gold, providing support for the price rebound.
However, Federal Reserve monetary policy remains a crucial factor influencing gold's trajectory. According to the CME FedWatch Tool, the market currently prices in an approximately 77.1% probability of a Fed rate hike in December. If upcoming U.S. economic data continues to support rate-hike expectations, gold prices could remain constrained by a higher interest rate environment.
In the short term, the $4,000 mark will be a key level for observing whether gold's rebound can be sustained. If gold prices can stay above this level, the market may shift focus to resistance around $4,080; if prices fall back below $4,000, attention will turn to support near $3,970.
Looking ahead, investors need to continue monitoring the ongoing impact of the U.S. midterm election results on the U.S. dollar and Treasury yields, as well as the U.S. non-farm payrolls report to be released on November 6.
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