Tic-tac. The race for the U.S. presidency is about to kick off its first round—a major event that could have a direct impact on gold prices.

US Presidential Election 2024: How will it affect Gold?

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America is about to choose its 47th president of the United States and it is a tight race. Not only will voters pick between Kamala Harris, presidential nominee for the Democratic Party, and Donald Trump, of the Republican Party, they will also elect people to fill various federal, state and local positions. 

But the impact of the election will reach far beyond the US. Who resides in the White House has a direct influence on the US's economic, fiscal, and monetary policies, as well as its foreign relations 🗺️ . And when there is political uncertainty, 

 - a widely recognised safe asset - which drives the price up.

But before we explore what could happen to gold prices, let's look at 

How much do US elections impact the price of gold?

pamp gold bar

Gold prices often fluctuate during US election periods. Put simply, when there is uncertainty - for example, when we don’t know who will lead a Government and therefore what economic and geopolitical decisions will be made - gold becomes more appealing. This is because investors seek assets that offer stability and protection against inflation. And when demand for gold is high, it pushes the price up 📈 .

But the price of gold is affected by lots of different factors, not just elections. The 

, the strength of the US dollar, global markets and other big events all play key roles.

combination of these global events - rather than changes in US leadership alone

 - that affect the price of gold. Likewise, what happens 

 an election also affects demand for gold. For example, the decisions that a new Government makes. 

However, the World Gold Council has found that the 

⭐ The gold price can slightly underperform around the election (compared to the long-term average).

⭐ Gold has a tendency to perform slightly better in the six months preceding a Republican victory.

⭐ Gold can underperform before a Democratic presidency. Also, the demand for gold bars and coins in the US can increase during Democratic presidencies.

How have previous US Presidential elections affected gold prices?

Before we examine what the 2024 election might have in store for the price of gold, let’s look at the history of the gold price during the past five US election cycles.

, the gold price was around $54.40 per gram. Six months after, it was around $56.60 per gram. However, uncertainty linked to the 

 meant gold prices fluctuated during this time. Although the price of gold initially spiked after the 2016 Presidential Election, it stabilised as new economic policies began to take effect.

, the gold price was around $53.50 per gram. However, the Eurozone crisis and other global economic issues influenced the market. During the Election in November 2012, the gold price was approximately $54.30 per gram. In the months after the election, the gold price was around $42.20 per gram - in part, because the economic outlook improved and investor demand decreased.

, gold prices were rising due to the global financial crisis. Six months after Barack Obama was elected, the gold price dropped slightly - but then rose again as the market stabilised and stimulus measures took effect.

Overall, while political change appears to have impacted the price, it is also clear that other factors - like 

 and financial crises - had an effect too.

How have other elections affected the price of gold?

uk general election

If other elections around the world create geopolitical uncertainty, they can affect the price of gold.

For example, when the UK announced a snap election for July 2024, there was a 49% rise in the number of people buying precious metals via the Royal Mint 🪙 . Gold purchases increased in volume by over 100%, with popular products including Britannia coins and large gold bars. 

After Marine Le Pen's National Rally had failed to achieve a clear victory in the French legislative elections in June 2024, the Euro strengthened, causing the gold price in Euros to fall 🇪🇺 .

Here are the reasons why certain elections influence the global gold price:

Any new trade policies implemented by new Governments could impact the price of gold. For example, after the US election, if there is more geopolitical tension between the US and other major world powers, this could create more economic uncertainty, prompting more investors to turn to safe havens such as gold. 

Could a second Trump presidency lead to more political tension between China and the US, potentially pushing up the gold price? 

Or if investors expect a Trump but Harris wins unexpectedly, could this create more economic uncertainty and boost the demand for gold? Only time will tell.

Changes made by the US Federal Reserve, like raising or reducing interest rates, could also impact the price of gold.

If investors have more confidence in the US economy after the election, the value of USD is likely to go up. However, if there are signs of an economic slowdown, investors may have less faith in USD as a safe storage of wealth - at least in the short term. This is when demand for, and the price of, gold may go up. 

Greater political tensions, such as further escalations in the Middle East or new trade wars between the US and China, could push up the gold price if investors feel less secure keeping their wealth in stock markets. It is likely that a Harris administration may have very different foreign policy objectives to a Trump administration, although both candidates will be under pressure to keep inflation down and employment rates high - two key performance indicators of a strong economy. 

When it is difficult to predict who will win the US presidency, it creates more uncertainty for investors.

The graph below (Reuters, LSEG) shows how gold prices have climbed recently as uncertainty surrounding the US election, the war in the Middle East, and other factors have prompted investors to seek out the safe-haven asset.

gold price chart

How has the gold price performed during previous US administrations?

During Biden’s time as US President, the gold price rose to record highs - partly thanks to greater economic uncertainty due to the rapid spike in inflation in 2022. Other factors have contributed to gold’s growth, including the Russian invasion of Ukraine and conflicts in the Middle East.

When Trump was president, the gold price also rose sharply, a trend which can at least be partly attributed to growing geopolitical tensions between the US and China under his tenure. Relations with India and Iran deteriorated, adding an extra layer of geopolitical instability to the global economy.

Additionally, the Covid-19 pandemic sent shockwaves through the financial markets - prompting more investors to turn to gold during the upheaval.

What will happen to the price of gold during the 2024 US Presidential election?

Kamala Harris and Donald Trump, US presidential election 2024

Whether Kamala Harris becomes the first female president of the US or Donald Trump is reelected, GOLD AVENUE’s own expert Nicky Shiels suggests things look bright for the precious metal ⭐ .

“Kamala Harris’ economic plan is very progressive and simply inflationary (using higher taxes on corporates & high income earners to fund assistance for low-middle income earners who haven’t yet built wealth. It for example includes addressing America yawning housing shortage by sending up to $25K in down payment assistance for first time home buyers). Both Trump and Harris are both ‘bigger government’ candidates which is structurally bullish for Gold.”

 by the end of 2024. Goldman Sachs predicts they will reach $2,900 by early 2025. This is because:

🪙 Central banks, particularly those in emerging economies, are increasing their gold reserves as a hedge against economic uncertainty.

🪙 Individual investors have been flocking to gold for both short-term and long-term gains.

These all drive demand and prices up - and have all led to the price of gold reaching new highs this year. Regardless of who wins the US election, gold is highly likely to remain a safe haven for investors. So check out 

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