Gold extends rebound above US$4,100 as dollar and yields decline

Gold extended its rebound above US$4,100 on Thursday, following a surge of more than 3% the previous day. This gain came as a Democratic victory in the US midterm elections resulted in a decline in the dollar and Treasury yields. The precious metal rose as high as 1.9% to trade near US$4,140 an ounce, marking the most significant increase since August. Previously, gold had risen to back above the US$4,000 support threshold in the previous session.

Lower Treasury yields and a weaker dollar both contributed to the gold's rise, as gold does not pay interest and becomes more affordable for international buyers. Brent crude oil futures also continued their decline, falling below US$100 a barrel for the first time since early October, due to President Trump's dismissal of the prospect of Iranian strikes following the election results.

The rebound in gold marks its biggest break yet out of a prolonged slump. However, it remains down by more than a fifth since the US-Iran conflict began in late February. As the spike in energy prices pushed monetary policy tighter, Analysts from Oversea-Chinese Banking Corp expressed cautious optimism about gold's potential to stabilize, should expectations of Fed tightening ease and investment demand rise.

Spot gold climbed 1.7% to US$4,127.02 an ounce at 10:32 am Singapore time, while silver also rose by 1.8% to US$53.15 after jumping nearly 5% on Wednesday. Platinum and palladium also experienced gains. The Bloomberg Dollar Spot Index, which gauges the US currency, saw a 0.2% decrease, following a 0.4% drop in the previous session.