Will the Midterm Elections Affect Gold Prices?

gold price after election

Whenever there’s a presidential election, people tend to turn their eyes to the stock market. Will a new president cause prices to rise? Will a change in leadership scare investors, or put them at ease?

That got us thinking about November’s midterms. What will this year’s closely-watched Congressional races mean for gold prices and people looking to buy and sell gold? Let’s take a closer look.

Gold prices after elections

Historically speaking, elections do affect stock prices and gold prices. After elections, these prices can go down, and the markets might be shaky in the run-up to a presidential election.

But when a new president takes office – or is reelected — gold prices seem to jump, which is what happened in 2012 and 2016 with Presidents Obama and Trump.

Where does that leave things with mid-terms?

According to State Street Global Advisors, data going back to 1971 shows that a Democratic-controlled House “appears to be friendlier to gold over the S&P 500 Index than a Republican controlled house,” keeping in mind that this data is skewed by oil price tremors in the ‘70s and ’80s.

Gold also did better when Democrats controlled the Senate, State Street says, noting that gridlock can also help boost gold prices.

“Gridlock—when neither the Democrats nor the Republicans have a single party control over the House, Senate and presidency—historically has still been positive for gold performance, but at only half the performance rate of the S&P 500,” they wrote.

At the same time, State Street’s analysts say it’s important to remember that factors outside of politics can affect gold prices.

“Consequently, we believe it is not the political party that drives gold’s performance but rather underlying factors such as economic growth, consumer confidence, inflation expectations and oil prices,” they say.

Get help determining gold prices after election

Regardless of what happens to gold prices after elections, we always come back to the same point: think of gold and silver as a steady way to hold onto, rather than add to, your money.

As our owner Greg Glemser once put it:

“It’s the idea that I want my $100 today to be worth $100 next year. You’re not really investing to make money, you’re investing to preserve money.”

But before you buy or sell gold, we’d recommend talking with an expert. At Doylestown Gold Exchange, we get calls or visits each day from people who want to learn more about precious metal investment, and our advice is always the same: consult first, talk about price second.

We’ve been providing consultations on the price of precious metals for more than two decades. Whether you want to invest in gold or sell it, contact us today to find out more. We also invite you to visit our homepage, where we offer around-the-clock pricing for gold, silver, platinum and palladium.