Gold, silver prices surge as US dollar drops after midterm elections

Precious metal prices surged Wednesday as a weakening US dollar and declining Treasury yields boosted commodity markets following key Democratic gains in the US midterm elections.

Gold prices jumped more than 2% during trading, reclaiming the $4,000-per-ounce threshold. Bullion was trading at around $4,024 an ounce, a daily gain of 2.37%, at around 0738GMT.

Silver posted a steeper gain, rising nearly 4% toward the $52-per-ounce mark. Meanwhile, the US dollar index slipped below 101.5, touching its lowest point in five weeks.

Markets weighed the prospect of Democrats securing control of both the House of Representatives and the Senate, potentially leading to legislative gridlock, limiting President Donald Trump's ability to advance his economic agenda and curbing federal expenditures.

A total Democratic victory might also clear the path for stricter artificial intelligence (AI) regulatory frameworks and intensified corporate oversight, potentially dampening broader economic growth projections.

Investors were monitoring the possibility of renewed US military action against Iran following the elections, as diplomatic negotiations between Washington and Tehran remained stalled.