WGC examining US, Ballots to Bullion: Report

Jul 25, 2024

1 11Recently, the World Gold Council (WGC) published, Ballots to Bullion, Examining the US Election’s Effect on Gold! WGC said in the report of 8 pages that, a brave new world! Given the US’s pivotal role in the global economy, coupled with the prevailing geopolitical uncertainties, the upcoming presidential election is viewed by many as a watershed moment with far-reaching implications.

As it stands, Republicans led by Donald Trump are ahead in the polls, but the outcome is far from secured. Furthermore, the recent events in the campaign trail – both the assassination attempt on President Trump and President Biden stepping down from the presidential race – have increased the level of uncertainty for an already divided US electorate. In this context, investors are asking about the effect of the election on gold.

Our analysis suggests that while US gold bar and coin demand seems to increase, on average, during Democratic presidencies, this is not the case with other segments of investment demand. In addition, party affiliation does not have a consistent impact on price during US elections. Instead, economic policies, both domestic and foreign, of any given president are more relevant to the behaviour of financial assets, including gold.

And while, historically, the US election has not been seen as a geopolitical risk, both the world and the US electorate remain highly polarised. This in turn highlights the need for robust hedges in investor portfolios, a role that gold fulfils effectively.

Elections have not, historically, had a significant or immediate effect on gold’s performance but, regardless of the winning candidate, near-term geopolitical risks remain high and may serve as a catalyst for gold.

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