Gold prices climbed 1.5% to around USD 4,126 on November 5, extending a rebound after Democrats won both chambers of Congress in the US midterm elections. The metal reached USD 4,147 earlier that day, its highest since October 20, before retreating as oil prices recovered. Gold had fallen to a one-year low of USD 3,870 on October 30.
The election gave Democrats control of the House and Senate, creating new obstacles for President Donald Trump's legislative plans. Party leaders plan to pursue oversight and measures centered on affordability and accountability. Republicans, meanwhile, have urged Trump to change course after the losses.
Markets viewed the result as mildly supportive for gold. Greater congressional scrutiny could slow some AI and data-center investment, while disputes over spending or foreign policy could increase uncertainty. Still, Trump retains extensive executive powers over trade and foreign affairs.
Oil moved sharply lower as comments from Trump and Vice President JD Vance tied Republican losses to the Iran war. Investors weighed whether political pressure might increase the chances of a diplomatic agreement. Brent crude hit USD 93.22 on November 5, its lowest in more than four months.
The contract later recovered to about USD 96, nearly 2% higher on the day. Bloomberg estimated seven-day average Gulf crude and product exports at 17.8 million barrels daily on October 29. That compared with 18.3 million a week earlier and a 2025 average of 25.4 million. Across the war period, combined Gulf crude and product exports remained 39% below the year-earlier level through October 29, according to recent Bloomberg estimates.
The US dollar index dropped to 101.09 after the election before rebounding toward 101.44 on November 5. Treasury yields fell as US stocks came under pressure. The two-year yield reached 4.52%, while the 10-year yield touched 4.83%, a two-month low.
Yet incoming data pointed to economic resilience. Initial jobless claims fell to 189,000, while continuing claims rose to 1.718 million from 1.695 million. October manufacturing activity increased to 55.5 on the ISM index, beating the 54.5 forecast. Service activity eased to 54.5 but remained in expansion.
Federal Reserve officials continued to raise inflation concerns. Cleveland Fed President Beth Hammack advocated modest rate increases, while Richmond Fed President Tom Barkin said further tightening remained necessary. Interest-rate markets assigned a 74% probability to a December hike and priced roughly 2.22 increases by October 2027.
In Britain, the Bank of England lifted its benchmark rate by 25 basis points to 4%, its first increase since 2023. The bank projected inflation near 5% by mid-2027. Its decision added to the broader focus on inflation and policy rates.
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Central banks remained a major source of gold demand. Their estimated third-quarter purchases reached 321 tonnes, lifting the year-to-date total to 675 tonnes. China reported 63 tonnes and Poland 40 tonnes of buying, while unidentified buyers accounted for much of the remaining demand.
By contrast, known global gold ETF holdings declined for a fourth straight day to 100.80 million ounces. That marked the lowest level since September 25. Registered COMEX gold inventory stood at 14.38 million ounces, its lowest since May 29.
Strong US payroll data or another oil rebound could limit gains, while subdued yields may support further recovery. Gold faces initial resistance at USD 4,150, followed by USD 4,207 and USD 4,226.
Support stands at USD 4,065, USD 4,030, and USD 4,000. Traders are watching the November 6 US employment report and preliminary consumer sentiment figures. October inflation data on November 10 and producer prices on November 13 will add further evidence about the Fed's next move.
Gold prices recovered from their October low after Democrats secured both chambers of Congress. Lower oil prices and Treasury yields supported the move, while central-bank buying continued. Yet expectations of further Federal Reserve tightening may restrict gains. Upcoming US employment and inflation data will help shape the next test of resistance.