The World Gold Council‘s latest paper, “Ballots to Bullion: Examining the US Election’s Effect on Gold,” investigates the relationship between US presidential elections and gold prices. Gold has traditionally been regarded as a safe-haven asset during times of political instability, such as elections. According to the paper, gold prices tend to fluctuate around US elections due to swings in investor sentiment and market dynamics.
According to the analysis, geopolitical uncertainty and prospective policy shifts might have an impact on gold prices during election years. Investors frequently flock to gold as a hedge against economic uncertainty, which can lead to increased demand and, as a result, higher prices. This pattern has been observed across multiple election cycles, with significant price changes occurring when market participants respond to polling data, election results, and the potential impact of new laws.
The study also looks at the larger economic background, noting that factors like inflation, interest rates, and fiscal policies implemented by new administrations can have a substantial impact on gold’s appeal. In example, expansive fiscal policies or greater government spending might raise inflationary worries, making gold a desirable investment.