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Thursday, November 05, 2026
What’s happening: Gold prices traded higher this morning, following the results of the US midterm elections.
What happened: The victory of the Democratic Party in the midterm elections raised hopes of an end to the ongoing US-Iran conflict.
Weakness in the US dollar provided a further boost to gold prices, while investors awaited the key NFP (nonfarm payrolls) report.
Why it matters: Gold prices extended gains this morning after recording their strongest daily rise since mid-August on Wednesday.
The US dollar, which fell on Wednesday, continued its decline this morning, after the Democrats won full control of the Congress in a sweeping midterm win. The crushing rebuke of President Donald Trump and his Republican Party raised hopes of an end to the US-Iran conflict, which in turn triggered a sharp decline in oil prices.
Trump admitted that the war contributed to the defeat in the midterm election, noting that rising gas prices also played a key role. He further signalled that the administration had no plans to escalate attacks against Iran anytime soon.
Spot price for WTI crude oil dipped 0.9% to trade at $86.64 a barrel this morning. Lower oil prices eased inflationary concerns pressures, reducing speculations of central banks hiking interest rates in the near term. This drove the demand for gold, as lower interest rates reduce the opportunity cost of holding the non-yielding bullion.
However, the Bank of England is still widely expected to hike its benchmark interest rates for the first time in three years today.
Weakness in the US dollar lent further support to gold prices as a softer greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.3% to 101.31 this morning.
Spot price for gold rose 1.8% to $4,133.68 an ounce this morning.
In other metals trading, spot price for silver rose 1.1% to $52.8330 an ounce, platinum climbed 1.5% to $1,522.69 and palladium gained 1.4% to trade at $1,021.27.
What to watch: Investors will keep an eye on the US dollar and the Bank of England’s interest rate decision.
NFP data from the US will be released on Friday. The US economy, which added 29,000 jobs in September, is expected to add 65,000 jobs in October. The US unemployment rate, which surged to 4.2% in September from 4.1% in the previous month, is expected to remain at 4.2% in October.
Context: The Dow Jones index jumped more than 1,500 points to a two-month high on Wednesday following the US midterm election results.
Details: Democrats have taken control of both the House of Representatives and the Senate, alongside winning major races in states like Texas and Ohio. This gives the Democrats the power to check President Donald Trump’s policies, including tariffs levied on various nations.
Data released on Wednesday showed that private businesses in the US created 86,000 jobs in October, in-line with September’s revised reading. The figure exceeding market estimates of a 69,000 gain.
The US trade deficit shrank to $105 billion in September from $105.7 billion in August and came in better than market expectations of a $108 billion gap. US imports climbed by 1.2% to a record $426.6 billion in September, while exports rose 1.9% to $321.5 billion.
The US composite PMI declined to 55.9 in October from 58.4 in the previous month, recording its weakest reading in three months. The services PMI slipped to 56.1 in October from 58.8 in September. The ISM services PMI also fell to 54.5 in October from 54.9 in September, missing market estimates of 54.8.
On the earnings front, McDonald’s shares rose around 6.5% on Wednesday after the company reported better-than-expected third-quarter earnings. Uber’s stock jumped around 5% following its third-quarter results. Shares of Advanced Micro Devices also closed higher following stronger-than-expected financial results.
Most key sectors on the Wall Street closed higher, with consumer discretionary and financial among the top performers. Energy stocks bucked the trend, falling around 4.8% on Wednesday.
The Dow Jones index jumped 1,569.40 points, or 3.03% to close at 53,356.12 on Wednesday. The S&P 500 climbed 1.58% to 7,688.62, while the Nasdaq 100 gained 0.91% to settle at 28,437.17.
What to watch: Data on US initial jobless claims (1730 UAE Time), nonfarm productivity (1730 UAE Time) and unit labour costs (1730 UAE Time) will be released today. The number of people claiming jobless benefits, which declined by 1,000 to 194,000 in the week ending October 24, is expected to rise to 196,000 in the latest week. Analysts expect US nonfarm business-sector labour productivity to surge by 2.8% in the third quarter following a 1.4% gain in the second quarter, while unit labour costs are projected to rise by 0.6% in the third quarter compared to a 1.2% gain in the previous quarter.
Other Markets: European indices closed higher on Wednesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 1.79%, 2.22%, 1.96% and 1.82%, respectively.
Canada joined a coalition of nations refusing to play ice hockey teams from Russia due to the ongoing conflict with Ukraine. The news sent the USD/RUB forex higher in forex trading this morning.
Australia’s trade surplus surged to A$2.83 billion in September from A$0.18 billion in August. The figure surpassing market estimates of a deficit of A$0.8 billion lent support to the AUD/USD forex pair.
UK’s S&P Global services PMI climbed to 52.8 in October from 52.1 in the previous month, which sent the GBP/USD pair higher in forex trading this morning.
Eurozone’s S&P Global composite PMI declined to 51.7 in October from 53.1 in the previous month. The reading remaining in the expansion zone lent support to the EUR/USD forex pair.
India’s HSBC services PMI was revised lower to 55.8 in October from the preliminary reading of 56.2, which sent the USD/INR pair higher in forex trading this morning.
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