XAU/USD ticks lower while early trend points to Democrats victory in House

• Gold trades cautiously around $3,930 ahead of the outcome of US Midterm Elections.
• Early trends show Democrats winning both the House and the Senate.
• The next key trigger for the Gold price will be the US NFP data.

Gold trades with caution at around $3,930 in the Asian trading session on Wednesday. The precious metal struggles to gain direction as investors shift their focus to United States (US) Midterm elections where early trend shows that Democrats would have a clear majority in House of Representatives.

According to BBC, 179/435 seats in the House of Representatives are counted and Democrats are leading with 114 seats. For a clear majority, any party needs to win 218 seats.

Several market experts had anticipated a significant chance of Democrats winning both House and the Senate.

Strategists at Brown Brothers Harriman (BBH) highlighted that betting markets “favor a Democratic sweep,” with Polymarket and Kalshi “putting the odds around 70%.”

ING argued that such an outcome “could make the case that the Dollar should come lower,” as a Democrat clean sweep would likely “lead to gridlock on the debt ceiling, a prolonged government shutdown next year and could encourage President Trump to pursue an even more activist foreign policy agenda.” Against that backdrop, Turner suggests investors will be weighing these political risks against the still-supportive mix of strong US growth, above-target inflation and ongoing Federal Reserve (Fed) tightening for the Dollar.

Lower US Dollar would make the Gold price a favorable risk-reward bet for investors.

Going forward, the next major trigger for Gold will be the US Nonfarm Payrolls (NFP) data for October, which is scheduled for Friday. The official employment data is expected to have a significant impact on Fed’s interest rate expectations.

Before that, investors will pay attention to the US ADP Employment Change data for October, which will be published at 13:15 GMT. The data is expected to show that the private sector created 69K fresh jobs lower than 90K in September.

Meanwhile, the US JOLTS Job Openings data for September has come in stronger than expected. The  Bureau of Labor Statistics (BLS) reported that employers posted 7.523 million fresh jobs, higher than 7.13 million estimates and the prior reading of 7.19 million.

In the daily chart, XAU/USD trades at $3,937.90, maintaining a bearish near-term tone as spot remains below the 20-day exponential moving average (EMA) at $4,050.63. The metal’s inability to reclaim this short-term trend benchmark suggests rallies are still capped, while the Relative Strength Index (RSI) at 37 keeps pressure tilted to the downside without yet signaling extreme oversold conditions.

On the topside, initial resistance is located at the 20-day EMA around $4,050, which gold would need to overcome to ease immediate selling pressure and open the way for a more sustained recovery. Looking down, the one-year low at $3,870.23 is the key support level.