Here’s How U.S. Elections Impact Precious Metal Prices

 

How Do U.S. Elections Impact Precious Metal Prices? 

In just two weeks, Americans will hit the polls to decide the next President of the United States. Vice President Kamala Harris is virtually tied with former President Donald Trump in the latest polls, and experts say that the winner is nearly impossible to predict. The outcome of this election will have significant ramifications for both the United States and the rest of the world. 

With Election Day on the horizon, many investors are wondering how U.S. elections impact precious metal prices. The truth is that the outcomes of U.S. elections both directly and indirectly influence the value of precious metals like gold and silver.

Directly, a hotly contested election can inject uncertainty into markets, which increases demand for safe haven assets like gold and silver. When traders are uncertain about the future of the international economy and geopolitical scene, they tend to purchase more safe haven commodities, including precious metals. 

The indirect effects of American elections can have an even more significant impact on precious metal prices. The policies instituted by U.S. elected officials directly influence the economic and geopolitical climate of the entire world. Because precious metals tend to thrive during periods of economic and geopolitical uncertainty, certain election outcomes can lead to higher gold prices. 

So how do elections impact precious metal prices? The outcomes of U.S. elections directly and indirectly influence the value of gold, silver, and other precious metals. On this page, learn more about what to expect in precious metal markets before, during, and after election season. 

How Will the 2024 Presidential Election Impact Gold and Silver Prices?

Ultimately, it’s hard to say whether Donald Trump or Kamala Harris will be better for precious metal prices. On one hand, precious metal markets have historically performed better under Republican presidents than under Democratic ones. On the other hand, concerns from some voters about the consequences of another Democratic presidency could increase demand for precious metals, which are considered hedges against uncertainty and international stability. 

Among presidential terms since 2000, 2024 has been an interesting exception. Under Democratic President Joe Biden, gold has increased by over 32% – the largest percentage increase for the precious metal since 1979. Would another Democratic administration produce similar results for precious metal investors? 

To answer this question, we’ll have to take a much closer look at how metals have performed under various presidential administrations – and the policy factors that influence precious metal markets. 

Historical Trends: Gold Prices Through Presidential Terms

The United States of America holds elections for hundreds of different political offices, but the office of the President is often considered the most prestigious. The presidential election, held every four years, is both the costliest and the most publicized election in the United States – and with good reason. The President wields an enormous amount of influence over the executive (and legislative) branches of government, and the President of the United States is the functional face of our country. 

It should go without saying that the presidential election can have a major impact on the value of financial assets – including precious metals. 

To understand what investors should expect from precious metal markets during American election cycles, we’ll need to take a closer look at how precious metals have performed during various presidential administrations. Take a look at the chart below, which analyzes precious metal price trends from 2000 until 2024. 

As you can see, both gold and silver prices increased consistently under the administration of President George W. Bush, a Republican. Precious metals trended up for Democratic President Barack Obama’s first term before falling during his second. Silver prices stagnated before increasing during Republican Donald Trump’s time in the White House, while gold prices consistently climbed before the 2020 election of Joe Biden. 

During Democrat Joe Biden’s presidency, gold prices increased significantly. Silver prices decreased for most of his tenure during this same time period but jumped significantly during the President’s last year in office. Overall, it seems that precious metal prices increase more under Republican presidencies than Democratic administrations. 

This chart might not tell the whole story, though. 

Key Events Play a Major Role in Precious Metal Prices

It appears that precious metals fare better under Republican presidencies, but certain world events may play a bigger role in determining where metal prices go. The outbreak of major conflicts, economic recession and crises, and pandemics are three significant events that have directly influenced precious metal prices since the year 2000. 

Below, we’ve labeled our charts with some of the major events that influenced gold and silver prices from 2000-2024. 

Clearly, precious metal markets are influenced both by American elections and the events that occur during a given leader’s tenure in office. The first half of Democratic President Barack Obama’s administration was characterized by one of the largest gold and silver bull runs in history due to the Global Financial Crisis. Following the resolution of the Eurozone Debt Crisis one year later, metal prices fell to their pre-2008 levels. Similarly, metal prices were relatively stagnant during the first year of George W. Bush’s presidency until the 9/11 Attacks and subsequent U.S. wars in the Middle East, which drove gold and silver prices higher. 

To get the full picture of how precious metals perform under various American leaders, let’s take a closer look at gold and silver price trends during the presidencies of Joe Biden, Donald Trump, Barack Obama, and George W. Bush.

Gold and Silver Prices Under Joe Biden 

Under Joe Biden, a Democratic President who will finish his single term in January of 2025, gold prices decreased during the COVID-19 pandemic before increasing after the outbreak of the Russia-Ukraine conflict in 2022. After this war began, gold prices increased significantly, reaching new all-time highs several times in 2023 and 2024. 

President Biden’s foreign policy during this period was characterized by a withdrawal from Afghanistan and steady support for Ukraine in its defensive war against Russia. The U.S. leader also showed consistent support for Israel as it continued its war against Hamas, the Palestinian terrorist organization that orchestrated the October 7th massacre in Israel. 

Silver prices followed a similar trend during Biden’s presidency, increasing as markets reacted to uncertain global geopolitical and economic conditions and stressors. 

How did precious metals perform under Joe Biden’s presidency? Overall, both gold and silver increased during President Biden’s time in the White House. Metal prices decreased to begin his presidency, but the outbreak of wars in both Ukraine and Gaza resulted in record-breaking gains for gold, silver, and other precious metals. 

Precious Metal Price Trends Under Donald Trump

During the administration of Republican President Donald Trump, the silver market remained largely stagnant until 2019, when the lead-up to the COVID-19 pandemic sent silver prices soaring. Gold prices followed a different trend, increasing significantly throughout the Republican’s entire presidential term. 

Donald Trump’s foreign policy primarily involved renewed economic tensions and a brewing trade war with China, as well as a focus on border security domestically. According to some analysts, Mr. Trump’s hawkish, America-first stance on foreign policy injected uncertainty into global markets, which provide tailwinds for gold bullion. Silver prices changed only moderately toward the beginning of Trump’s presidency but increased as COVID-19 became a more significant threat to global stability. 

How did precious metals perform under Donald Trump’s administration? Donald Trump’s White House was generally good for gold, with the precious metal increasing by a wide margin during the Republican presidency. Silver price action was stagnant for most of Mr. Trump’s presidency, although prices began to increase rapidly in the last year of his tenure in America’s highest office. 

Gold and Silver Prices Under Barack Obama 

Gold and silver prices were highly correlated during Democratic President Barack Obama’s administration. Both precious metals appreciated rapidly in the wake of the 2008 Financial Crisis before returning to pre-2008 levels after the world economy began to recover. In 2011, global silver supply shortages and skyrocketing demand in the green energy sector sent silver to a decades-long high above $35 per troy ounce. Gold prices also reached new heights during the peak of the 2008 Financial Crisis before falling years later during Obama’s second term. 

By the end of former President Obama’s administration in 2016, gold and silver prices had largely stagnated. 

How did gold and silver markets perform during Barack Obama’s presidency? Gold and silver prices increased rapidly in Barack Obama’s first term, due primarily to the global instability caused by the 2008 Financial Crisis. Prices for both metals decreased as the global economy recovered heading into Obama’s second term, and metal markets steadied by the time Donald Trump was elected President. 

George W. Bush Gold and Silver Price Trends

Precious metal prices increased consistently throughout George W. Bush’s presidency. The Republican President began his first term with the September 11th Attacks, which catapulted the United States – and the world – into over a decade of conflicts in the Middle East. The geopolitical and economic turmoil caused by this event impacted several commodity markets, particularly oil and precious metals.

Bush’s presidency illustrates the vital role that geopolitics plays in determining market demand for precious metals. When investors are uncertain about international economic and political stability, precious metals tend to increase in value. The litany of global conflicts ignited in the wake of the 9/11 attacks pushed both gold and silver to new heights – and prices have not fallen since. 

How did precious metals perform under George W. Bush’s presidency? Both gold and silver prices increased considerably during George W. Bush’s presidency. Safe haven assets like precious metals were aided by an increasing sense of international instability following the 9/11 Attacks and subsequent armed conflicts in the Middle East. 

2024 Election – How Will Metals Be Impacted? 

Truthfully, the impact of the 2024 U.S. presidential election on precious metals is anybody’s guess. The race is currently virtually tied, with most pollsters struggling to make a call one way or another. Gold and silver prices have already benefited from the controversy surrounding this hotly contested election – gold and silver are both currently up by more than 30% on the year. 

Given historical trends, however, we can take an educated guess at how gold and silver would fare under either a Harris or Trump presidency. Historically, precious metal prices have increased more under Republican presidents than under Democratic presidents. Since the year 2000, gold and silver prices have increased during every presidential term, regardless of political party. The rate of increase tends to be higher when Republicans control the White House, though. 

Consider Policy, Not Party 

As these same historical trends show, the party of a president has less to do with how precious metals perform than their policies, as well as the events that occur during their leadership. During Democrat Barack Obama’s tenure as Commander in Chief, for example, precious metal prices increased significantly during the 2008 Financial Crisis but returned to normal levels after the international economy began to recover. 

If you’re trying to figure out which Presidential candidate will be better for metal prices, consider three main policy areas: 

1. Inflation
2. Economic strength and stability
3. International uncertainty and conflict

Below, we’ll take a closer look at how gold/silver prices correlate with these key policy positions and economic-political climates. 

Inflation 

Gold and silver prices tend to increase during periods of intense inflation. Take a look at the chart below, which visualizes the correlation between inflation numbers and the value of gold per troy ounce. 

Gold and silver are popular assets for investors who seek to hedge against inflation, so both precious metals become more valuable as demand increases during inflationary climates. What does this mean for the impact of elections on precious metal markets? The short answer: it’s hard to say. 

Partisan analysts will often say that either Republicans or Democrats contribute to lower inflation numbers, but the truth is a bit more complicated. Here’s a brief overview of the average year-over-year (YoY) inflation rate for every President since the year 2000: 

1. George W. Bush: 2.8 Percent. 
2. Barack Obama: 1.4 Percent. 
3. Donald Trump: 1.9 Percent.
4. Joe Biden: 5.2 Percent (Still In Progress). 

Both the highest and lowest average inflation rates of sitting Presidents since 2000 belong to Democratic Presidents. In other words, a slew of factors contribute to the national inflation rate – not just the political party that is currently in power. Since inflation is a good key indicator for precious metal prices, traders betting on the U.S. election should consider how their candidate’s policies would impact the national inflation rate. 

Economic Strength/Stability 

A wide range of factors contribute to the overall economic strength of the United States, but the winner of a presidential election plays a key role in the financial future of our country. One important indicator of economic strength is the federal interest rate, which determines the overnight cost of transferring funds between banking institutions. 

Here’s an expression of how gold prices are influenced by interest rates. 

One common belief among gold investors is that low interest rates mean higher gold prices. This is sometimes true, but not always. From 2005 to 2010, gold prices directly correlated with the federal interest rate. During other periods, though, interest rates and gold prices climbed in close correlation. 

In 2024, interest rate speculation helped drive gold to multiple all-time highs throughout the year. Rumors of interest rate cuts have traditionally played as significant – if not a more significant – role in gold’s price action than the actual real interest rate. 

International Uncertainty and Conflict 

Gold and silver are considered safe haven assets, which are investments that tend to retain (or even gain) value during times of geopolitical or economic uncertainty. If you take a look at our chart displaying precious metal prices by presidential term, this trend becomes very clear. During global crises like COVID-19 or the 2008 Financial Crisis, gold and silver prices soared to record heights. 

The outcome of a presidential election matters to precious metal markets because each candidate in a given race has a different approach to balancing international tensions and conflicts. Foreign policy has perhaps never been more pivotal than in the 2024 election, when the world faces several major wars in both Europe and the Middle East. 

As a general rule, election outcomes where a candidate prone to inflaming tensions is victorious tend to lead to higher gold prices. During his single term in office, Republican President Donald Trump’s escalation of economic tensions with China helped drive gold to new heights. Another record performance for gold happened during George W. Bush’s tenure, when multiple wars in the Middle East pushed demand for safe haven assets to fresh records. 

Key Events Could Play a More Pivotal Role in Metal Prices Than Policies Or Party

One of the classic adages of both life and investing: expect the unexpected. Even under perfect conditions, certain events can disrupt international markets, inflame tensions between world powers, and give tailwinds to safe haven assets such as gold and silver. The September 11th Attacks, COVID-19, and the Russian invasion of Ukraine are three examples of key events that directly influenced the value of gold and silver. 

This complicates our analysis and makes it nearly impossible to answer with certainty which candidate in 2024 would be better for precious metal prices. Historically, Donald Trump’s track record shows that another Trump presidency is likely to produce the kinds of uncertain international relations and conditions conducive to higher precious metal prices. But unexpected events occur in every presidency and could change the trajectory of gold/silver prices under either candidate. 

Final Thoughts: How Will the 2024 Election Impact Gold and Silver Prices? 

With a contentious 2024 U.S. presidential election just two weeks away, precious metal investors are wondering how the race may impact their portfolios. Historically, precious metals have performed better under Republican than under Democratic presidents. There have been several notable outliers to this trend, though, and the data suggests that a leader’s policy and random international events influence precious metal prices more than the political party affiliation of a given White House administration. 

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