WASHINGTON (dpa-AFX) - Rebounding from the losses of yesterday's session, gold prices have surged on Wednesday as rate-hike worries associated with oil-linked inflation declined after crude oil prices plunged and the U.S. dollar slid following the U.S. midterm election results.
Front Month Comex Gold for December delivery has jumped by $115.70 (or 2.94%) to $4,056.10 per troy ounce.
Front Month Comex Silver for December delivery has soared by $2.577 (or 5.18%) to $52.330 per troy ounce.
The U.S. mid-term elections concluded yesterday.
Today, as the counting went on and results were announced, it was clear that Democrats maintained an enormous lead in both houses of the U.S. Congress.
As of now, the Democrats have won 54 seats in the 100-seat Senate and seized 228 seats in the House of Representatives. For a majority in the lower chamber, either party must secure a minimum of 218 seats.
Aside from the contest for Congress, the Democrats also won the Governor seats in several states.
In a setback to U.S. President Donald Trump, even Republican strongholds like Texas, Kansas, and South Carolina voted favoring the Democrats.
Of crucial importance, the results indicate that from January, when the incumbent candidates assume office, an approval from the Democrats would be needed for any legislation to pass. However, the U.S. President has the right to veto bills.
In an interview with the New York Times, Trump accepted the results but pinned the losses on the fact that he was not on the ballot.
Among a host of other reasons, analysts highlight the prolonged war with Iran and the consequent worries over increasing fuel costs along with the resultant inflation that is squeezing the American households as the main reason for the setback to the Republican party.
Iran's Supreme Leader Mojtaba Khamenei stated that the nation is on high alert for the possibility of renewed strikes. Khamenei also warned that Iran's response, in case of an aggression, would be on a larger magnitude.
However, other leaders in Iran have commented that the loss by the Republican party is a proof that U.S. citizens are against the war with Iran.
Reuters reported citing two Iranian sources that Iran is also concerned that Trump could attempt to compensate for the election losses with a military strike on Iran. Hence, Iranian forces are currently on high alert.
WTI crude oil for December delivery was last seen trading at $93.16, down by $2.93 (or 3.05%).
The U.S. Dollar Index was last seen trading at 101.35, down by 0.51 (or 0.50%). A weaker U.S. dollar makes the yellow metal relatively less expensive for overseas buyers, offering support to the prices on the upside.
On the economic front, data from Automatic Data Processing revealed that private jobs increased by 86,000 in October, exceeding market expectations of 69,000 and matching September's downwardly revised gain.
Mid-sized companies led with 33,000 new positions, followed by small firms with 28,000 and large businesses with 24,000.
Meanwhile, the Mortgage Bankers Association of America revealed that the Purchase Index in the U.S. decreased to 131.40 on October 30 from 134.10 of the previous week.
According to the CME Group's FedWatch Tool, currently investors are betting on a 79.20% chance of a 25-basis-point interest rate-hike at the upcoming meeting of the U.S. Federal Reserve on December 8-9 while the odds on rates being held at the current level stand at 20.80%.
The U.S. Fed left rates unchanged in its recent October meeting. Investors are watching out for the upcoming U.S. nonfarm payrolls report for further guidance on the policy outlook.
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