Democrats sweep Congress: dollar slides, gold back above $4,000

London Open, Wednesday, 4 November 2026. Published 07:00 UTC.

Mixed: The dollar sell-off has not turned into a clean risk-on move: gold is +2.6% over 24h, oil -1.33% and indices average -0.09%, while JPY stays soft (-0.29) and CHF is flat (0.03).

In short

• Democrats won both the House and the Senate (52 seats). DXY fell to late-September lows near 101.25, 2y yields dropped to 4.566% (-5bp) and 10y to 4.90%. EURUSD is +0.36% since Asia Open at 1.12332, GBPUSD +0.35% at its highest since Sept 16, and USD has slipped to -0.06 on the strength table behind EUR (0.38) and GBP (0.29).
• Metals took the dollar leg hardest. XAUUSD is +2.29% at 4020.35, XAGUSD +3.78% at 51.625 off its one-year low, and XPTUSD +2.93%. Equities did not join in: USTEC is -0.91%, US500 -0.58% and JP225 -1.68% since the last note. USDJPY is -0.39% at 158.06, back below 158.60.
• Europe gets its own tests: HCOB PMIs from 08:15 UTC and flash HICP at 10:00 UTC (YoY f/c 4%, core 2.5%). The US follows with ADP at 13:15 UTC (f/c 69K) and ISM Services at 15:00 UTC (f/c 54.8). The desk sees firm US data and Fed-hike pricing as the main brake on the dollar's slide.

Themes

Election shock hits the dollar; data is the test

Democrats taking both chambers raises gridlock and policy uncertainty for the last two years of Trump's term, and DXY slid to about 101.25 as front-end yields fell about 5bp. ING and the news flow see no structural USD damage, and the data trend (JOLTS 7.523M vs 7.13M f/c, factory orders beat) plus Fed-hike bets are intact. That puts ADP and ISM Services in charge of whether the leg extends or retraces.

Precious metals squeeze off the lows

Gold is back above $4,000 at 4020.35 after the desk had it capped near $3,950, and silver has jumped to 51.625 from the $48.62 one-year low set on Nov 3. The platform flagged XAGUSD +4.99% and XPTUSD +4.66% over roughly two hours into 06:40 UTC. The desk's silver view had near-term risk skewed to violent rebounds within a downtrend, so a hawkish US data surprise is the swing factor for both metals.

Europe's own catalysts: HICP today, BoE tomorrow

EUR leads the strength table (0.38) and GBP is second (0.29), but EURGBP is flat (+0.01% since the last note), so both moves are USD stories. Flash HICP at 10:00 UTC can move December ECB pricing. Thursday's BoE decision has a 25bp hike to 4.00% fully priced, which leaves the vote split and guidance as the swing, with large speculative GBP shorts flagged by ING.

What moved

• XAU/USD +2.29% The Democratic sweep pushed the USD and Treasury yields lower, and gold broke past $4,000, well above the ~$3,950 cap the desk had been watching.
• EUR/USD +0.36% The euro rose on the USD selloff after Democrats took both chambers; the desk reads the move as dollar-driven rather than broad euro demand.
• USD/CHF −0.41% The franc had two tailwinds: Tuesday's hot Swiss CPI (1.5% y/y vs 1.3% f/c) pulled SNB hike bets forward, and the USD took the post-midterm hit.
• USD/JPY −0.39% Fresh USD selling and sliding US yields combined with intervention-driven JPY short-covering to pull the pair off its three-week high.
• USTEC −0.91% The index whipsawed through Asia: the platform flagged a 2.47% slide into 01:41 UTC and a 1.32% rebound by 05:11 UTC, and our feed links the swing to election-driven policy uncertainty without a tech-specific driver.

Releases

• CNY RatingDog Services PMI 50.8. The softer print did not dent AUD, which held its gains: AUDUSD is +0.26% since the last note at 0.69835.
• INR HSBC Composite PMI 56.2. The miss had no visible impact in our price set; headlines show the rupee gaining on broad USD weakness.
• INR HSBC Services PMI 55.8. Released alongside the composite miss, it was likewise overshadowed by the US election-driven dollar move.

Levels to watch

• EUR/USD 1.1276 Ceiling of the 4-week 1.1104–1.1276 D1 range; today's high at 1.12628 sits just under it.
• GBP/USD 1.3448 Former D1 resistance, now first H4 support after the breakout to the highest since Sept 16.
• USD/CHF 0.8149 D1 support at the seven-week lows; the H4 trend is extended with RSI at 26.
• USD/JPY 158.35 Prior H4 high where the move above it failed; price has since pulled back to 158.06.

Ahead

• 08:55 UTC EUR HCOB Services PMI Seen at 51.7, this is a growth check for the euro against weak retail sales, with EURUSD and EURGBP exposed.
• 09:00 UTC EUR HCOB Composite PMI Forecast at 51.9, unchanged; a miss would test the euro's standing as the strongest major on the 24h table.
• 10:00 UTC EUR Harmonized Index of Consumer Prices (YoY) Seen at 4% from 3.8%. A December ECB hike is already priced, so a soft print, hinted at by the 30 Oct national miss (2.8% vs 3.1%), would hit EUR harder than a hot one would lift it.
• 10:00 UTC EUR Core Harmonized Index of Consumer Prices (YoY) Forecast steady at 2.5%; the core read will shape how firmly the market holds December ECB hike pricing, with EURUSD and EURCHF exposed.
• 13:15 UTC USD ADP Employment Change Seen at 69K vs 90K previous. The desk flags a strong print as able to spark a sharp USD retracement after the election slide, with XAUUSD, EURUSD and USDJPY most exposed.
• 13:20 UTC EUR ECB's Lane speech Lane speaks after HICP and following Nagel's 'very likely' December hike remark, so his tone on hike pricing matters for EUR crosses.
• 15:00 UTC USD ISM Services PMI Forecast 54.8 vs 54.9. It is the main US growth test today for Fed-hike pricing (~79% December odds per the desk), with USD, gold and US indices exposed.
• 15:00 UTC USD ISM Services Prices Paid Previous 74; a hot prices component would reinforce Fed-hike bets and test the post-election drop in yields.

Watch whether ADP and ISM Services confirm the post-election dollar slide or start to unwind it; the desk's lines are DXY 101.25 as support and 101.50 as the first reclaim level.