Market overview: gold spikes, pound tops Brexit level, stocks wobble after US midterms
ITF Team3 min read
Gold jumps above $4,050 and the pound hits its highest level since the Brexit referendum as Democrats win US midterms, while stocks like Qualcomm slip.
Key takeaways
- Gold rose over 3.6% to near $4,065 after Democrats swept the US midterm elections.
- The pound reached its strongest level against a basket of currencies since the 2016 Brexit referendum.
- Australian dollar reclaimed the 0.7000 level as the US dollar weakened post‑election.
- Qualcomm shares fell 7% following a weak earnings outlook despite beating estimates.
Asian markets opened on Thursday with a clear risk‑on tone after the US midterm elections handed a decisive victory to the Democratic Party. The biggest reaction was seen in gold, which surged past $4,050 per ounce, while the British pound climbed to its highest level since the 2016 Brexit referendum. Equities showed mixed moves, highlighted by a sharp drop in Qualcomm after a cautious earnings forecast.
Currencies and central banks
The pound sterling (GBP) strengthened against a broad basket of currencies, reaching a level not seen since the Brexit vote a decade ago. The rally was driven by expectations that a Democratic Congress will pursue more accommodative fiscal policies, easing concerns over the UK’s trade outlook. Meanwhile, the Australian dollar (AUD) rebounded above 0.7000 against the US dollar, recovering from a 12‑day low as the US dollar slipped on the election shock. The USD/JPY pair edged lower, trimming earlier losses but still forming a bullish pin bar pattern near its 200‑day SMA, indicating potential upside if the trend holds.
The People’s Bank of China (PBoC) continued to temper yuan gains by raising the foreign‑exchange reserve requirement ratio to 6% from 4%, locking up roughly $24 billion in FX. This move aims to curb rapid appreciation as the USD/CNY approached 6.65. In Europe, the euro remained steady ahead of the ECB President’s speech, while the Swiss franc saw limited movement despite a medium‑impact comment from SNB Chairman Schlegel.
Gold and commodities
Gold (XAU/USD) rallied over 3.6% to near $4,065, marking the strongest daily gain since mid‑August. The surge reflects safe‑haven demand as investors reassess risk after the Democratic sweep, which is expected to reduce geopolitical tensions and potentially lower real yields. Oil prices, however, fell more than 8% as traders weighed the impact of the US political shift on global demand and the ongoing Iran conflict.
Analysts note that the gold rally is testing a key resistance near its 20‑day moving average. A break above this level could signal a longer‑term bullish reversal, while a pullback may see the metal retest the $4,050 threshold.
Read also: SNB says it will act if price stability is threatened
Crypto and tech stocks
In the crypto space, Brazil’s Mercado Bitcoin announced a phased reopening on Monday, starting with account visibility while keeping withdrawals and trading paused for security checks. Meanwhile, broader market sentiment remains cautious as regulatory uncertainty persists despite bullish comments from firms like Grayscale and BlackRock.
Tech equities showed divergence: Qualcomm (QCOM) fell 7% after issuing a weak earnings outlook, even though the quarter’s results beat expectations. Figma’s shares slipped despite an earnings beat, as the company emphasized long‑term AI‑driven growth. Snap also posted a double‑digit decline after missing revenue and daily active user targets.
Key calendar events for the next 24 hours
- 12:00 UTC | GBP BOE Monetary Policy Report – high impact
- 12:00 UTC | GBP Monetary Policy Summary – high impact
- 12:00 UTC | GBP MPC Official Bank Rate Votes – high impact
- 12:00 UTC | GBP Official Bank Rate – high impact
- 12:30 UTC | GBP BOE Gov Bailey Speaks – high impact
- 12:40 UTC | CHF SNB Chairman Schlegel Speaks – medium impact
- 13:30 UTC | USD Unemployment Claims – medium impact
- 15:30 UTC | CAD BOC Gov Macklem Speaks – medium impact
- 18:00 UTC | EUR ECB President Lagarde Speaks – medium impact
- 21:00 UTC | CAD Annual Budget Release – medium impact
Frequently asked questions
Why did gold jump above $4,050 after the US midterms?
Gold surged more than 3.6% to near $4,065 as the Democratic sweep reduced political uncertainty, prompting investors to seek safe‑haven assets and pushing real yields lower, which typically supports precious‑metal prices.
What caused the pound to hit its highest level since the Brexit referendum?
The pound rose to its strongest level against a basket of currencies since the 2016 Brexit vote because markets anticipate more accommodative fiscal policies from a Democratic Congress, easing concerns about the UK’s trade environment.
How did the US midterm results affect the Australian dollar?
The Australian dollar reclaimed the 0.7000 level against the US dollar, gaining over 0.59%, as the US dollar weakened on election‑related risk aversion and a shift in expectations for US monetary policy.
Official data sources
Related news
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This article is compiled from international market news for information only. It is not investment advice.