On Wednesday, November 4, the price of gold returned above $4,000 per ounce following the results of the US midterm elections. For holders of the metal, this is the strongest intraday gain since August, and the weakening dollar additionally makes purchases more affordable for foreign investors.
Market participants are betting that political gridlock in Washington will restrain the growth of government spending. If this scenario does not materialize, bond yields and the dollar could head higher again, and those who bought the metal at its highs risk losing money.
Why gold went up
During trading, gold rose by 2.6% to $4,040 per ounce. Silver gained 4.3%, to almost $52 per ounce, while platinum and palladium also posted notable gains.
The rally began after a convincing Democratic victory in the US midterm congressional elections. The market is betting that partisan confrontation will limit Donald Trump's ability to launch new spending programs that increase the budget deficit.
Against this backdrop, US Treasury yields fell across all maturities, and the dollar index (DXY) dropped by 0.4% — the most in two months. Gold pays no interest, so it benefits when bonds yield less, and a weak dollar lowers the metal's cost in other currencies.
What happened to gold before the rebound
The rebound followed a difficult October: on October 30, gold ended its worst month since the 2008 crisis at $3,875 per ounce. Prices are now back above the support level around $3,970, which the metal broke through at the end of the month.
Before the rebound, speculators had been cutting positions for a fifth consecutive week: from September 22 to October 27, they sold $19.5 billion worth of gold, according to Goldman Sachs. The return of such participants could accelerate the price increase, while their continued exit keeps the risk of a new decline alive.
Central banks, meanwhile, are providing the market with long-term support: in Q3 2026, they bought 321 tonnes of gold, 42% more than a year earlier, according to the World Gold Council. Government demand supports the price and benefits long-term investors, although private buyers are increasingly rarely purchasing bars, coins, and jewelry.
The question remains open whether the period of prolonged decline in precious metal prices is over. On the intraday chart, the RSI has risen to almost 80, and such a level signals overheating and the risk of a short-term correction.
Cryptalist analysis: Gold's rally above $4,000 is primarily political and currency-driven rather than a reflection of a fundamental reassessment of demand. The combination of an overheated RSI, recovering speculative positions, and steady central bank buying creates a volatile but structurally supported setup. Cryptalist views current levels as a zone of elevated risk for a short-term correction while the long-term bullish trend remains intact.