Gold and silver prices traded higher in international markets on Thursday, November 5, supported by a weaker US dollar following the US midterm election results, which eased some political uncertainty and lifted sentiment across global financial markets.
On COMEX, gold futures were trading at $4,111 per ounce, up $38, or 0.93%, from the previous close of $4,075.40 an ounce. Prices touched an intraday high of $4,128.50 an ounce, while the day’s low stood at $4,067 an ounce.
COMEX silver futures were trading at $52.53 per ounce, up $0.248, or 0.47%, from the previous close of $52.325 an ounce. The metal touched a high of $52.99 an ounce and a low of $52.275 an ounce.
The US dollar weakened after Democrats secured majorities in both the Senate and the House of Representatives in the midterm elections. The outcome eased concerns over a contested result and raised expectations of political gridlock in Washington, contributing to a decline in US Treasury yields and putting pressure on the dollar.
The dollar index, which measures the greenback against a basket of six major currencies, fell 0.06% to 101.41 on Thursday, after declining 0.36% in the previous session.
A weaker dollar generally supports gold and silver prices because it makes dollar-denominated commodities relatively cheaper for buyers using other currencies.
However, investors continue to monitor US economic data and expectations around the Federal Reserve’s interest rate trajectory for further cues. Markets are also watching developments in US-Iran relations and movements in bond yields.
Gold, silver prices in India
In the domestic market, gold and silver prices witnessed a sharp recovery on Wednesday, November 4, amid a rebound in international bullion prices and improving festive demand.
According to the All India Sarafa Association, gold of 99.9% purity rose by ₹4,800 to ₹1.46 lakh per 10 grams, inclusive of taxes. Silver prices gained ₹9,000 to ₹1.93 lakh per kg.
The recovery comes ahead of Dhanteras, which falls on November 6 this year. Jewellers have indicated that the recent correction in precious metal prices has improved consumer sentiment, although sales volumes are expected to remain broadly flat year-on-year.
What experts say about gold and silver
Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Ltd., President of the India Bullion and Jewellers Association and Chairman of Jain International Trade Organisation, said gold and silver had rebounded as the US dollar weakened following early Democratic gains in the midterm elections.
He said expectations of political gridlock and lower government spending could weigh on growth, while lower bond yields and a weaker dollar have supported bullion prices.
From a technical perspective, both metals are recovering from oversold levels.
What investors should watch
Movements in the US dollar, Treasury yields, upcoming US employment data and expectations around the Federal Reserve’s monetary policy are likely to remain important factors for precious metal prices.
-With agencies inputs
NOTE TO READERS
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.