Gold extended its rally on Thursday, moving above $4,130 an ounce as the Democratic election victory continued to pressure the US dollar and Treasury yields, supporting demand for the precious metal.

At 23:55 ET (04:55 GMT), spot gold was up 1.9% at $4,138.51 an ounce, while US gold futures gained 1.8% to $4,147.59. Other precious metals also advanced: silver rose 1.6% to $53.0750 an ounce, platinum climbed 2% to $1,529.40, and spot palladium gained 2.3% to $1,030.54. The US Dollar Index fell 0.3% to 101.27.

The election result, which was a setback for the Trump administration, was followed by broad declines in the dollar and US bond yields. Treasury yields fell across maturities on Wednesday and continued lower on Thursday, while the dollar had already lost 0.4% in the prior session.

Lower yields can make gold more attractive because it does not pay interest, while a weaker dollar makes bullion less expensive for buyers using other currencies. ANZ analysts said US bonds had also benefited from expectations that the changed political balance could constrain President Trump’s proposed tax cuts and spending plans. They cautioned, however, that limits on fiscal expansion could weaken government borrowing as a source of support for gold’s longer-term appeal.

Oil prices remained sharply lower after Brent crude fell below $100 a barrel on Wednesday for the first time since early October. Trump played down the prospect of renewed strikes against Iran after the election setback, easing concerns about further escalation and disruption to energy supplies.

Gold’s rebound is its strongest break yet from a decline that had lasted for months, though the metal remains more than 20% below its level before the US-Iran war began in late February. The conflict pushed energy costs higher and fuelled inflation, contributing to tighter monetary policy that had weighed on gold, which does not generate interest.

Investors are now looking to Friday’s US nonfarm payrolls report for fresh signals about economic conditions and the interest-rate outlook. Evidence of moderating inflation could give the Federal Reserve more room to ease monetary policy, potentially supporting gold.

Sources: Investing.com News.