Gold hits 2-week high as dollar yields, oil falls after US midterms

Spot gold rose 1.9% on Thursday to $4,134.82 per ounce. During the session, it reached $4,146.63, its highest level since October 20, 2026. The move extended gold’s rally after the US midterm elections.

The comparison with the recent low shows the scale of the rebound. Gold had fallen to $3,869.85 on Friday, described as a one-year low. Thursday’s session high was therefore $276.78 above that low. Gold had also gained more than $250 during the week.

The rally was supported by weaker Treasury yields and a softer US dollar. A sharp fall in oil prices also eased inflation worries and expectations for higher interest rates. Gold rose nearly 3.4% on Wednesday, its strongest daily gain since August 19, while December US gold futures climbed 1.8% to $4,145.10.

Spot gold is the market price for gold available for immediate or near-term settlement. It differs from a futures price, which refers to delivery at a specified later date. The article reports both: spot gold at $4,134.82 and December futures at $4,145.10 per ounce.

Gold is quoted in US dollars because the dollar is the main currency used in international precious-metals trading. A troy ounce is the standard weight for precious metals, equal to about 31.1 grams. This common unit lets traders compare prices across countries without changing the measurement.

The convention also helps explain gold’s currency sensitivity. When the dollar weakens, the same ounce costs fewer units of many other currencies. The article links the weaker dollar to stronger demand because gold becomes less expensive for buyers holding those currencies.

Gold is priced in US dollars, but many buyers earn and spend different currencies. When the dollar loses value against those currencies, buyers need fewer units of their own currency to purchase the same dollar-priced ounce. The gold price has not necessarily fallen in dollars, but its converted cost is lower abroad.

For example, if a buyer’s currency strengthens against the dollar, converting that currency into dollars becomes more favorable. The buyer can purchase more gold, or the same amount of gold for less local currency. That can encourage demand from international investors and consumers.

The article reports that the US dollar was at a multi-week low as gold rallied. It specifically identifies the weaker dollar as a factor supporting demand for the precious metal. This currency effect worked alongside lower Treasury yields and easing interest-rate concerns.

Treasury yields show the returns investors can receive from US government bonds. When those yields fall, the reward from holding an interest-paying Treasury becomes smaller. Gold does not pay interest, so its relative disadvantage narrows when bond yields decline.

This is an opportunity-cost effect. An investor choosing gold gives up the income available from a safe bond. If that income falls, holding gold becomes less costly in comparison. Investors may then increase gold exposure, especially when they also want protection from economic or market uncertainty.

The article reports that Treasury yields were at multi-week lows during gold’s rally. It also says declining yields and the dollar, combined with falling energy prices and easing rate concerns, forced speculative short sellers to cover positions. Those purchases added momentum to gold’s advance.

Oil is a major energy cost for households and businesses. When crude prices fall sharply, fuel and other energy-related costs may face less upward pressure. That can make investors less worried about inflation staying elevated or spreading through the economy.

The article gives a clear example: Brent crude fell nearly 9% on Wednesday and remained below $100 a barrel on Thursday. The move eased inflation concerns. With less inflation pressure, markets can expect central banks to need fewer or smaller rate increases, or to keep rates high for less time.

That shift helps gold because lower expected interest rates usually reduce the relative cost of holding a non-interest-paying asset. In the article, falling energy prices worked with weaker Treasury yields and a softer dollar. Together, these factors supported gold and encouraged short sellers to close bearish positions.

Investors linked possible major Democratic gains in the US elections with a lower risk of further escalation in the Iran war. That expectation reduced the perceived threat to oil supplies and helped push Brent crude down nearly 9% on Wednesday. Brent remained below $100 a barrel on Thursday.

The oil-market reaction mattered for gold through inflation and interest rates. Lower oil prices can reduce energy-driven inflation pressure. Investors may then expect central banks to avoid keeping interest rates higher for longer. At the same time, the election-related market move weakened the dollar and Treasury yields.

Those conditions supported precious metals. Ole Hansen of Saxo Bank said precious metals emerged as major winners after the elections. He added that falling energy prices, easing inflation and rate concerns, lower yields, and a weaker dollar forced speculative short sellers to cover, adding buying pressure to gold.

Gold pays no interest, so it competes with assets that provide income, such as government bonds. When investors expect interest rates to fall, those assets may offer lower future returns. The income sacrificed by holding gold becomes smaller, making the metal relatively more appealing.

Lower-rate expectations can also pull Treasury yields and the dollar down. The article describes both developments during gold’s rally. A weaker dollar lowers gold’s price for buyers using other currencies, while lower yields reduce the relative advantage of interest-paying investments.

The article’s immediate market still reflected some uncertainty: traders saw a 79% chance of a US Federal Reserve rate increase in December. Investors were also awaiting Friday’s non-farm payrolls report for clues about the central bank’s path. Gold’s rise therefore reflected changing expectations, not certainty that rates would fall.