Why is gold price up today? Precious metal rises by 1.6% to $4,124.89 per ounce after US midterm election results

Gold price is climbing new heights on Thursday. The precious metal has posted its biggest daily gain since mid-August on Wednesday. The spot gold rose by 1.6% to $4,124.89 per ounce by 0752 GMT. It touched $4,146.63 per ounce, its highest level since October 20, earlier in the session.

Why is gold price up today?

There are three reasons why gold prices have risen:

• The US dollar has dropped.
• US Treasury yields have fallen.
• The US midterm elections have had an impact on expectations for financial markets and geopolitical factors.

This has pushed gold prices up.

Gold is traded globally in US dollars and when the dollar falls gold becomes cheaper for investors holding other currencies. It can drive the demand for gold.

The low treasury yields have pushed the gold prices high. Gold doesn't pay any interest so when interest bearing investments like government bonds fall investors may look to gold.

"Gold has been helped by a weaker dollar and lower Treasury yields," Linh Tran, market analyst at XS.com said. However, it will be important to see whether gold can sustain its rise above $4,000.

What impact have the US midterm elections had?

The US midterm elections have impacted expectations for the political and economic direction of the country. Republican Party led by President Donald Trump have suffered losses in the congressional elections this week. It has had an effect on market expectations due to change in the direction of US foreign policy.

Investors are looking at whether this could reduce the chances of further escalation in the US-Israeli war with Iran. This has also led the oil prices down.

Oil prices had fallen for four consecutive days before seeing a small rise on Thursday. The market believes that the elections could reduce the chances of further escalation. The possibility of reduced geopolitical tensions has affected the expectations for energy prices.

Could gold prices hit $4,200 or $4,400?

The market analysts are closely watching the possibility of gold sustaining its rise above $4,000. "If gold continues to have support from investment flows and bond yields then it could consolidate above $4,000. If it can sustain this price then it could give gold a chance to rally back towards $4,200 per ounce, followed by $4,400," Linh Tran, XS.com told Reuters. These are potential price targets.