US Presidential Election History Suggests This Is a Good Time to Buy Gold

Amine Bouchentouf

While studies show the stock market performs better under Republicans during the first year after an election, they also show that the market performs better during the overall 4 years under a Democratic president.

External factors also come into play: Does the incumbent lose, or win a second term? Markets favour stability and tend to perform better during the second term of an incumbent president rather than the first term of an incoming president.

In addition to the broader stock market performance, the outcome of presidential elections may have a significant influence on commodities markets as a whole.

Over the last few election cycles, gold prices have tended to drop or stay flat during the election year, only to see positive performance throughout the rest of the term.

If history is any indication, now is a good time to start loading up on gold. With the election so close, history suggests that gold prices will begin another uptrend soon after a winner is announced.

Gold markets—unlike the broader stocks and commodities markets—don’t discriminate based on which political party enters the White House. Rather, gold markets are more interested in stability and market visibility. This has been the case throughout the last decade and looks like it will be the case in this coming cycle as well.

At the end of the day, who enters the White House is important; however, it’s not as important as the actual policies that are implemented and which will have a broader effect on the economy and the markets.

The astute investor will therefore analyze the fiscal policies and budget policies implemented by the president-elect to determine how those changes will affect their portfolio. While the election is a critical moment in time, the work done after the election is the deciding factor for markets.

source: hardassetsinvestor