New rally in gold prices after the US elections: All eyes are on that data now

The political situation that emerged in the US midterm elections provided strong support to gold prices in global markets. With the Democrats gaining the majority in both the Senate and the House of Representatives, US Treasury bond yields and the retreat in the dollar increased the value of gold by 3 percent.

Capturing a rapid upward momentum in spot markets, one ounce of gold tested the level of 4 thousand 38 dollars during the day. Ounce of gold, which has provided 3.97 percent profit to its investors since the beginning of the week, is currently finding buyers at 4 thousand 29 dollars with an increase of 2.75 percent.

This upward trend in global markets was also reflected in the domestic market. Gram gold made a strong start to the day, gaining 2.85 percent in value and started trading at 6 thousand 483.25 TL.

EXPECTATIONS TO BRAKE TRUMP'S POLICIES

The main reason behind the rally in gold prices was the change in expectations for US President Donald Trump's fiscal policies.

It is predicted that Democrats gaining control of Congress will restrict Trump's fiscal expansion plans.

Evaluating the current situation in the market, Ole Hansen, Head of Commodity Strategy at Saxo Bank, pointed out that the expectation that a Democrat-controlled Congress will limit fiscal expansion directly supports gold prices.

Following these developments, the US dollar index decreased by 0.4 percent to 101.45. The depreciation of the dollar has made gold a much more attractive and accessible investment tool for investors holding other currencies.

GEOPOLITICAL RISKS AND THE SHADOW OF WAR

In the search for direction in the markets, geopolitical risks also remain hot. Gold, which was priced above 5 thousand dollars before the Iran war that broke out at the end of February, dropped below 4 thousand dollars at the end of October as the war pushed up energy prices and fed new interest rate increase expectations.

The question of whether the USA will launch a new military operation against Iran continues to be one of the main elements of uncertainty in the gold market.

EYES ON FED AND EMPLOYMENT DATA

The only factor that suppresses investors' demand for gold is the interest rate policy of the US Federal Reserve (Fed). According to CME FedWatch data, markets are pricing in a high probability of 77 percent that the Fed will raise interest rates at its December meeting.

A possible rise in interest rates may limit upward movements by increasing the alternative cost of holding non-interest-bearing gold.