How much do the US elections impact the gold price?

Over the last 20 years, the price of gold in US dollars has risen by an average of 9.4 per cent in every US election year – which, however, also corresponds to gold's average annual performance since the turn of the millennium. If a candidate's success was expected to result in a significant change in politics or the security situation, this showed in the price of gold, such as in 2016, when Donald Trump won against Hilary Clinton and the precious metal rose by 8.6 per cent, and especially in the most recent election in 2020, when Trump lost to Joe Biden and the price of gold rose by 24.4 per cent.

The value of gold increased by 60 per cent in a single term of office

According to a recent study by the World Gold Council, the price of gold rose by around 30 per cent during Trump's first three years in office and by a further 30 per cent in 2020 – the last year of Trump's presidency – meaning that the price of gold rose by a total of 60 per cent during his term in office. This clearly shows what a major influence external factors had on the gold price: from late February 2020, the coronavirus pandemic kept the world on tenterhooks – including the US. Many people will remember TV reports that New York's hospital morgues and funeral parlours had run out of space to store the victims of the pandemic.

Geopolitical risks have far more impact than the presidential election

During Biden's time in office, gold has risen by over 30 per cent so far, after initial sideways movements that were primarily due to the Fed's change in interest rate policy and the resulting extremely strong US dollar. This rise is partly due to ongoing record purchases by central banks and the further tensions in the geopolitical situation caused by renewed conflict in the Middle East.

In the 2024 election year, a number of geopolitical and economic factors will play a role that could boost or slow the price of gold. A recent analysis of US-specific geopolitical risks by the asset management firm BlackRock shows that the US elections might have a rather minor impact on the precious metal: the presidential elections are nowhere to be seen in its list of the ten biggest risks for the US in 2024.