How Have US Elections Impacted Gold?

The following article is an excerpt from our FREE US Election Guide that analyzes how US Presidential elections have historically impacted the US dollar, stock market, and gold that we are republishing the in the run-up to the inauguration on January 20th. Please click the link above for more election analysis!

The historical relationship between US Presidential parties and gold’s performance is potentially even less clear than the association with stocks and the US dollar.

Looking at the chart below, gold rallied strongly under both Republican and Democratic US Presidencies throughout the 1970s until 1982, when it then fell under both parties until 2000. The precious metal then started a new secular bull market the continued regardless of the President’s party for the next couple decades:

Source: StoneX. TradingView data. Past performance is no guarantee of future results.

Drilling down to a shorter-term timeframe, gold’s performance in the period immediately after a presidential election has shown a slight tendency to favor of the Democrats. According to the U.S. Money Reserve study, Democratic victories saw an average gold price increase of +0.5% versus an average drop of -1.1% in the two weeks after a presidential election since 1980.

This impact is even greater during the period between Election Day and Inauguration Day. Democratic presidential election wins have led to an average gold price increase of +1.5%, while Republican wins brought a -5.5% decrease on average, perhaps on the assumption that Republican presidents will place a greater emphasis on fiscal conservatism and decreased government spending:

Source: US Money Reserve. Past performance is no guarantee of future results.

The majority of these short-term impacts has been driven by gold’s strong performance immediately after Barack Obama’s elections and weak performance following Ronald Reagan’s elections, so readers may (once again) want to take these trends with a grain of salt.

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