Gold heads for best week since August as U.S. political shift lifts bonds

Gold prices edged lower on Friday, but remained poised for their biggest weekly gain since August. The shift was driven by the U.S. midterm election result, which weakened the dollar and Treasury yields. Investors also factored in ongoing losses in equities and expectations of a change in U.S. fiscal and monetary policy. Spot gold fell 0.1% to $4,083.31 an ounce by 8:22 p.m. ET (12:22 a.m. GMT), while U.S. gold futures slipped 0.5% to $4,092.67.

Silver gained 0.1% to $51.8615 an ounce, while platinum fell 0.2% to $1,517.17. Palladium slipped 0.9% to $1,025.28, with futures down 0.8% to $1,025.25. The U.S. dollar index ticked up 0.1% to 101.62. Bullion had surged more than 5% this week after the Democratic takeover of Congress pushed the dollar and Treasury yields down. However, gold remained susceptible to equity-market liquidations as investors sold assets to make up for losses.

The metal traded near $4,090 an ounce after a robust rally, while technology stocks kept falling for a third day on Friday. The decline followed worries that Democratic control of Congress could bring stricter regulation of artificial intelligence firms, especially amid rising public opposition to data center expansion. The resulting move to safer assets boosted demand for U.S. Treasuries, driving yields to their lowest since early September.

The dollar recovered marginally, making gold less attractive for buyers using other currencies. ANZ analysts noted that expectations of tighter fiscal constraints under a Democratic-controlled Congress had helped push Treasury yields down, though reduced government borrowing could also lessen one source of gold demand. They added that physical buying remained strong, with central banks adding a net 321 tons to their bullion reserves in the third quarter, the quickest pace since late 2024.

This surge was fueled by geopolitical risks and concerns over fiscal discipline, which bolstered institutional demand for bullion. Traders will now watch the U.S. nonfarm payrolls report later on Friday for fresh insights into economic momentum and the interest-rate outlook.