Shares of iShares Gold Trust Micro jumped 3.17% to $40.31 after Democrats secured congressional control in Tuesday's midterm elections, triggering a sharp dollar selloff and a flight into gold. For holders of this low-cost gold-tracking fund, the overnight move erased a week of losses in a single session — but the sustainability of this political trade is far from certain. Gold Jumps Back Above $4,000 as Democrats Sweep Congress — Is IAUM's Election-Night Rally a Turning Point or a Head Fake?
Shares of iShares Gold Trust Micro surged 3.17% to $40.31 Wednesday morning after Democrats captured both chambers of Congress, triggering a swift dollar selloff and dragging Treasury yields lower — the exact cocktail that makes gold more attractive to global buyers.
• A Weaker Dollar Means Cheaper Gold for the Rest of the World
Spot gold jumped 2.64% to $4,031.98 an ounce , as the dollar weakened and Treasury yields fell following Democratic victories.
The dollar index fell to a one-month low of 101.41 after Democrats captured majorities in both chambers. Because gold is priced in dollars, a cheaper greenback instantly makes bullion less expensive for overseas buyers, boosting demand. IAUM — a physically backed fund that tracks spot gold at a 0.09% expense ratio, the cheapest among major gold ETFs — moves almost tick-for-tick with the metal.
• Markets Are Betting a Split Government Will Slow Spending and Cap Yields
Markets were interpreting the Democratic wins as reducing the likelihood of a deficit-expanding agenda under President Trump over the next two years.
Commonwealth Bank strategist Carol Kong noted that "a Democratic sweep would limit government spending over Trump's term," which is why the benchmark 10-year Treasury yield dropped nearly 5 basis points to 4.902%, while the 2-year yield fell 6 basis points to 4.55%. Lower yields shrink the opportunity cost of holding gold, which pays no interest — a direct benefit for IAUM shareholders.
• The Rally Claws Back a Brutal October but Faces a Quick Test IAUM closed at $38.70 on October 30, its lowest level in the recent window, after a nearly 7% decline in October driven by inflation concerns and expectations of further rate hikes. Today's bounce only returns the fund to where it stood on October 29 ($40.08). Analyst Matt Simpson at StoneX flagged $4,000 as "the obvious resistance level," and Friday's U.S. jobs report could reset expectations for the Fed's December meeting. A strong payrolls number would likely strengthen the dollar, pressuring gold right back down.
• Institutional Demand Provides a Floor, but Not a Guarantee
Central banks purchased a net 321 tonnes of gold in Q3 2026, contributing to a record 4,256 tonnes in gold ETFs.
IAUM itself holds roughly $8 billion in assets under management. That institutional backdrop gives the fund a structural bid, yet Capital.com analyst Daniela Hathorn cautioned that "the recovery remains fragile." Shareholders should treat today's pop as a politically driven short-term move until macro data confirms a lasting shift in the dollar-yield dynamic.