Effect Of Us Election On Gold Price

Gold has traditionally been regarded as a safe haven in challenging economic times and therefore if there is a positive outlook just prior to an election it is a predictable consequence that the gold price would come under pressure.

Effect of us election on gold price. Uncertainty surrounding the november 3rd u s. A high dollar value means a lower price for gold while a weaker dollar means a higher price for gold. Sebag added that political and macroeconomic uncertainty could add tailwinds to gold.

At the same time the price of gold has been incrementally increasing since november 2016 it s risen from us 1 183 per ounce at that time to around us 1 900 a month before this year s election. Kitco news the u s. Whether president trump or joe biden take office election years inevitably affect the us economy and gold.

This would mean the gold price would have to rise more than 200 from its current levels. After barack obama was elected in 2008 the price of gold jumped 17 8 by the end of the year. As nordea recently found us gdp has historically risen by 0 3 more in election years than other years since 1948 partially on the back of expanded fiscal policy as incumbent politicians seek to buy their way to reelection.

Bush was re elected in 2004 the price of gold climbed about 7 in the month after he won and rose 4 8 overall that year. The next month it decreased by 1 8. It s generally understood that the value of the us dollar correlates with the price of gold.

Politics creates price sensitivity. This year gold. Gold prices are no different to stock market indexes in as much as they are both sensitive.

Based on recent gold prices of 1 872 a troy ounce investors could expect the price of the yellow metal to surge as high as 2 263 if the democrats sweep congress and gold s price history repeats. Election including potentially contested results could be under appreciated by precious metals markets citi analysts wrote in a quarterly commodities outlook. In november 2016 the price went down 7 6.