How to Trade Gold Before and After the Election, plus a special Election update!
Historically, U.S. presidential elections have a substantial impact on gold prices. After all, a change in leadership can bring a change in fiscal policy.
So, how do you trade it heading into elections?
One, invest in gold in the months leading up to the election.
“Charts dating back to the 1970’s, reflect trends of gold prices soaring in the month of September before election day and a significant drop in the final days leading up to the event. On average gold prices continue to decrease until January of the following year,” says BellevueRareCoins.com.
Prior to the 2012 election (Obama v. Romney), gold rallied from a January low of $1,556.80 to a high of $1,733 by the time of the election. Following that election, gold collapsed to a low of $1,395 by April 2013.
Prior to the 2016 election (Trump v. Clinton), gold rallied from a January low of $1,061 to a high of $1,308 by the election. Gold then plummeted post-election to a low of about $1,125 before recovering to $1,309.30 by December.
Prior to the 2020 election (Trump v. Biden), gold jumped from a January low of about $1,519.70 to a $1,912.20 by November. Post-election, gold dipped to about $1,776.50 to a high of $1,962.50 by December.
Two, invest in gold on any pullbacks between election day and Inauguration.
“Since 1980, in the two-week periods following a presidential election, Democratic victories saw an average gold price increase of 0.5% while that same period for Republican victories produced an average price drop of 1.1%, according to the U.S. Money Reserve study,” according to Deseret News.
“The impact is even greater during the period between Election Day and Inauguration Day. Democratic presidential election wins led to an average gold price increase of 1.5%, while Republican wins brought a 5.5% decrease on average.”
Three, invest in gold no matter who wins the election.
It also doesn’t matter who wins the election, as once pointed out by HSBC analysts.
“In addition to economic and financial events, gold is sensitive to geopolitical and even social developments,” they said, as quoted by Markets Insider.
“This US election may be particularly important in setting the course of US economic policy and foreign policy and hence for gold prices, given the severity of the challenges facing the economy (including still-sluggish economic growth, income inequality, high debt levels and low productivity) and foreign policy entanglements and challenges.”
New 2024 election forecast could shock markets
There’s a “shadow candidate” for President of the United States.
I’m not talking about Biden.
Or Trump.
No one is talking about this third candidate… yet.
But when this candidate announces his run, America will change forever.
Who is this candidate?
And how will this impact investors in 2024 and beyond?
