I. Event Overview

On November 4, 2025, the United States held midterm elections, in which the Democratic Party scored major victories in a number of key positions. This injected vitality into the party during Trump’s second term and served as an early barometer for the 2026 midterm elections.

In New York City, 34-year-old democratic socialist Mandeani was elected mayor, becoming the first Muslim mayor of the city. He advocates radical policies. This result triggered accusations from the Republican Party that the Democratic Party has shifted to the "far-left"; Trump called Mandeani a "communist" and threatened to cut off federal funding for New York.

In Virginia and New Jersey, former CIA officer Spielberg and former Navy officer Scherrer won the gubernatorial positions respectively. Both candidates secured victory with their pragmatic stance and anti-Trump positions. Although these states tend to lean Democratic, the Democratic candidates won by a wider margin, reflecting centrist voters’ resistance to Trump’s policies.

These victories came against the backdrop of the ongoing federal government shutdown. Trump’s approval rating has dropped to its lowest point, and voters have expressed dissatisfaction with economic burdens and political chaos. The Democratic Party’s local victories may exacerbate divisions in Congress, prolong the government shutdown, and heighten concerns about inflation and tariffs—driving investors to turn to gold.

II. Market Impact Analysis

1. Intensified Political Uncertainty:The Democratic Party’s victories in key states highlight the resistance during Trump’s term, which may prolong the federal government shutdown (which has lasted for weeks) and policy deadlocks, such as the review of the legality of tariffs and immigration reform. Historically, such events have stimulated demand for gold as a "safe haven."
2. Rising Inflation Expectations:The Democratic Party’s policies emphasize spending and taxation, which may amplify opposition to Trump’s tariffs, push up import costs and overall inflation, and benefit gold as an inflation hedge.

III. Technical Analysis

As of 13:49 Beijing Time on November 5, the spot gold price was quoted at $3,965.07 per ounce. In recent days, gold prices have fallen below the key support level of $4,000.

• The RSI (14) value is 50.187, in the neutral zone. Market sentiment is relatively balanced, with no obvious signs of overbought or oversold conditions.
• The STOCH (9,6) is 57.124, in the buying range, indicating potential correction risks.
• The STOCHRSI (14) is 89.355, having entered the overbought zone, which may signal short-term correction risks for gold prices and further confirm that selling pressure may be accumulating at high levels in the market.
• The MACD (12,26) is -7 (negative), sending a sell signal. This indicates that short-selling momentum still dominates in the short term, and gold prices may continue to face downward pressure.

Overall, technical indicators are in the strong buying range. Although gold prices face short-term downward risks, buying momentum is relatively strong, and a rebound may occur after an overbought correction. Investors need to pay attention to whether gold prices can break through key resistance levels.

IV. Outlook

1. Short-Term Rebound Potential: If the government shutdown continues, gold prices may rebound above $4,000, benefiting from risk-aversion sentiment.
2. Medium-Term Inflation-Driven Growth: The interaction between Democratic policies and Trump’s tariffs may push gold prices into the $4,300.00-$5,000.00 range.
3. Buffering from Global Factors: Central bank gold purchases and geopolitical risks provide support, but the Federal Reserve’s interest rate decisions will be a key variable.

Summary

The Democratic Party’s sweeping victories in the 2025 midterm elections have intensified U.S. political divisions and economic uncertainty, providing strong safe-haven support for gold. Although gold prices have come under pressure to around $3,935.00 in the short term due to China’s tax policies and technical corrections, medium-term inflation expectations and demand from global central banks will drive a rebound. Investors should closely monitor developments in the government shutdown, the Federal Reserve’s interest rate decisions, and the trend of the U.S. dollar. If the deadlock persists, gold prices are expected to hit new highs; otherwise, a short-term correction may occur.