Gold has hit a two-week high. Is it too late to buy it now?

Gold rose by more than 1% on November 5—reaching its highest level since October 20—amid a sell-off in the U.S. stock market and the Democrats’ victory in the midterm elections. However, analysts warn that the political momentum may prove to be short-lived: further gains will depend on the performance of the dollar and bond yields, as well as on whether the new Congress can keep inflation in check.

During trading, the price per ounce reached $4,146. These changes followed the shift in control of Congress from the Republicans to the Democrats following the midterm elections, according to Barron’s. The rise in gold prices, now in its second consecutive day, has been accompanied by a weaker dollar and a decline in yields on long-term U.S. Treasury bonds.

The rise in metal prices also boosted the stocks of gold mining companies. The VanEck Gold Miners ETF, which tracks the stocks of the largest gold mining companies, rose by nearly 4% at one point. Among the fund’s largest holdings, Newmont, Agnico Eagle Mines, Barrick Mining, and AngloGold Ashanti saw their shares rise.

Investors will now be waiting for the release of U.S. employment data on Friday, which could provide new clues regarding the Federal Reserve’s future policy, Reuters reports. Gold is traditionally viewed as a safe-haven asset during periods of political uncertainty and heightened geopolitical risks, including those stemming from a war with Iran, notes Barron’s. The dollar index fell to its lowest level since September 30, making gold, which is denominated in U.S. dollars, more affordable for buyers from other countries. The yield on 10-year U.S. Treasury bonds also approached a two-month low, according to Reuters.

At the same time, just last week, the metal fell to $3,885 per ounce—a one-year low and 27% below the record high set in late January at over $5,600.

Whether gold’s rally will be sustainable will depend on whether the new Congress can lower energy prices, curb government spending, and counter the Donald Trump administration’s inflationary measures, including tariffs, according to Aakash Doshi, an analyst at State Street Investment Management. “A potentially less hawkish Fed policy and a weaker dollar should be key factors supporting high gold prices,” Doshi noted.

A political stalemate in Washington does not in itself guarantee a rise in gold prices, according to Daniela Hathorn, an analyst at the brokerage platform Capital.com. What matters is whether investors will view the election results as a factor that reduces inflation and pressure on government borrowing or, conversely, as a source of additional uncertainty for the U.S. economy, Barron’s quotes Hathorn as saying. “Both scenarios could support gold under certain circumstances, but the direction of real bond yields and the dollar will remain the key factor,” she added.

At the same time, demand for gold remains high among central banks. According to the World Gold Council, central bank purchases of gold—particularly by China and Poland— increased by 6% compared to last year.

This article was AI-translated and verified by a human editor