Here's What the U.S. Presidential Election Means For Gold & Silver

After more than a year of anticipation, the U.S. presidential election is finally upon us. News coverage is at a fever pitch, and rhetoric from both sides has turned increasingly intense. Many people are experiencing election fatigue, ready to get past the noise and move on with their lives. Naturally, precious metals investors are wondering how the election outcome will impact their holdings. Is there a simple answer, such as "Democrats boost gold and silver, while Republicans don’t" (or vice versa)? In this article, I’ll explore historical data to address that question and share additional insights that support a bullish outlook for precious metals in the years ahead.

Since early October, presidential candidate Donald Trump’s election odds have risen significantly against candidate Kamala Harris. According to Polymarket, the world’s largest prediction market, Trump’s chances surged from 48.9% against Harris’s 50.0% to a peak of 66.9% against her 33.1% by October 30th. During this period, gold gained a solid 5.8%, and silver rose 8.5%. The U.S. Dollar Index, equities, and Bitcoin also saw increases, in what became known as the “Trump trade.”

By October 30th, however, Donald Trump’s election odds had peaked and subsequently declined to 55.4% at the time of writing. As Trump’s odds fell, precious metals, the U.S. Dollar Index, equities, and Bitcoin also experienced pullbacks. While other factors may be influencing these trends, the initial impression suggests that the prospect of a Trump presidency is bullish for gold and silver.

fter more than a year of anticipation, the U.S. presidential election is finally upon us. News coverage is at a fever pitch, and rhetoric from both sides has turned increasingly intense. Many people are experiencing election fatigue, ready to get past the noise and move on with their lives. Naturally, precious metals investors are wondering how the election outcome will impact their holdings. Is there a simple answer, such as "Democrats boost gold and silver, while Republicans don’t" (or vice versa)? In this article, I’ll explore historical data to address that question and share additional insights that support a bullish outlook for precious metals in the years ahead.

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Many are curious whether one political party tends to be more bullish for gold and silver than the other. To address this, the World Gold Council recently analyzed gold's performance before and after U.S. presidential elections from 1972 to 2022. Their findings indicate that none of the results are statistically significant, however, leading them to conclude, “Overall, our analysis of gold and U.S. presidential elections suggests that gold does not react directly to party affiliation or changes in leadership.”

The same World Gold Council study found that gold bullion coin sales were higher when a Democrat was in office. They theorized this trend is likely because gold buyers tend to lean Republican and feel more apprehensive when a Democrat is in office, making them more inclined to purchase gold, traditionally viewed as a safe-haven asset (a theory I agree with). I’d also like to point out that the major gold-buying episodes of the past few decades have coincided with Democratic presidencies, though were not due to the actions or policies of any particular party—for example, the Y2K scare in the late 1990s, the Global Financial Crisis from 2007 to 2011, and the COVID pandemic in the early-2020s.

As we’ve seen, there’s no clear link between the party in the White House and the performance of precious metals—at least historically. I believe that regardless of which party wins, the long-term outlook for gold and silver remains bright. Both parties have shown a strong tendency to increase the national debt—a factor that supports a bullish case for precious metals, as illustrated in the graph below.

Though Republicans are often viewed as the more fiscally conservative party, the national debt—now nearing $36 trillion—has grown at an average annual rate of 10.4% under Republican presidencies since 1980, compared to 7% under Democratic administrations. It’s worth noting that the higher debt growth during Republican terms is largely due to Ronald Reagan’s significant defense spending during the Cold War. There’s a real risk that ambitious Democratic-backed initiatives, such as a potential Green New Deal, universal basic income (UBI), and funding those through the principles of Modern Monetary Theory (MMT), would drive national debt far higher—an outcome that would be very bullish for gold and silver.

Examining U.S. federal budget surpluses and deficits as a percentage of GDP can also shed light on whether either party has a tendency to run larger deficits. My findings show that since 1980, there’s little difference between Democrats (an average annual deficit of -3.86%) and Republicans (-3.72%). This reinforces my view that the outlook for gold and silver remains strong, regardless of the party in power, as both are likely to continue running budget deficits well into the future.

Money supply growth is the reason for inflation, and gold and silver benefit from inflation over the long run. Nobel laureate economist Milton Friedman famously stated, “Inflation is always and everywhere a monetary phenomenon.” The graph of the M2 money supply below illustrates its steady increase, regardless of the political party in power—a trend I expect to continue.

The M2 money supply encompasses all currency in circulation, checking accounts, travelers’ checks, savings deposits, time deposits under $100,000, and shares in retail money market mutual funds. Since 1980, M2 has grown at an average annual rate of 5.63% under Democratic presidents and 6.93% under Republican presidents, with the latter figure notably skewed by the high growth rates during the Reagan era.

Examining inflation itself, the U.S. Consumer Price Index (CPI)—a measure of the cost of consumer goods and services over time—has steadily risen regardless of the political party in the White House. Since 1980, the average annual inflation rate during Democratic presidencies has been 3.1%, compared to 3.5% under Republican presidencies, with the latter figure skewed by the Reagan years. I expect inflation to keep climbing regardless of who holds office, which should bolster the case for gold and silver.

One key reason I expect inflation to accelerate in the years ahead is the increasingly precarious fiscal position of the United States. As the graph below shows, the national debt has been growing at a much faster pace than the economy, worsening our debt burden significantly. With the government nearing its fiscal limits, it will have far less flexibility to support the economy during recessions or national emergencies through traditional stimulus measures. This raises the likelihood that the government will eventually resort to outright debt monetization or "money printing" to cover expenses, which would lead to rapid inflation and push gold and silver to remarkable highs.

Even more concerning is the U.S. Congressional Budget Office's projection that federal debt held by the public, as a percentage of GDP, will soar from just below 100% today to around 170% over the next few decades:

Since the 2020 pandemic, the combination of America’s surging national debt and rising interest rates has more than doubled annual interest payments to over $1.1 trillion:

As of this year, gross interest on U.S. debt has exceeded spending on defense, income security, health, veterans’ benefits, and even Medicare, making it the second-largest expense for the U.S. government—trailing only Social Security, which stands at approximately $1.5 trillion annually:

In light of these factors, the long-term outlook for gold and silver remains robust, regardless of political leadership. With a steadily climbing national debt, mounting interest obligations, and an accelerating trend toward monetary expansion, the economic and fiscal environment is increasingly supportive of precious metals. Inflationary pressures, driven by aggressive monetary policies and large-scale government spending, are likely to persist and intensify, enhancing the appeal of gold and silver as safe-haven assets. Whether due to fiscal policies or structural economic challenges, precious metals are positioned to thrive in a landscape where financial stability is increasingly at risk.

Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. — Matt 6:19–21

Amen brother.

“A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences”

Proverbs 27:12

I have for years promoted God’s form of money, not our current “ unequal weights and measures “ form of money.

"When I was young, I walked around with REAL silver in my pocket. "

You were well off! I walked around with empty pockets. I remember taking weeks of scavenging pennies before I got the 25 cents for this.

U.S. President this time will have less to do with it than usual.

Sure, the destruction of the US$ dollar and therefore rise in price of gold and silver will come faster if Harris wins and Trump might be able to slow it down. But Russia and the other BRICS nations that are backing their money with Gold (and Silver) is what is going to be keeping them going up and up. And China and India’s cultural greed for gold (and silver) will add to it.

And all the recent ‘breakthroughs’ in technology that need silver to make them work.... The annual production of silver worldwide is already on the verge of being completely consumed by industry, and soon will likely ensue a ‘fight’ over those who want to store it as wealth and those who want to make the newest battery or electronic device / electrical contact or conductor out of it.

If Kamala “wins” gold and silver go up.
—————
You view it backwards. The value of a gold does not go up, the amount of Dollars to buy Gold is more, it takes more paper dollars to buy Gold. The USD purchasing power is collapsing- as we are witnessing.

Gold has a different purchase price in each country’s Fiat currency. The price of Gold in the world’s most stable currency, the Swiss Franc just now hit an historic high….all Fiat is declining.

That said, regardless of who gets in, PM’s will rise.

This author completely ignored the fact that in four years of Biden, gold increased from ~ $1600/oz to over $2500/oz. If Harris is elected it will soon exceed $3,000/oz. In fact forget the polls and watch the price of gold Nov 4 and 5th. Wall street investors usually have reliable information when making their investment.If their reliable sources tell them that Harris will win, watch gold markets move upward. If its Trump gold prices will not change much

Now, I believe this to be the Great Tribulation - IOW the last half of the 7 years of 'Peace and Security'

Ezekiel 7:19
New King James Version

19 ‘They will throw their silver into the streets,
And their gold will be like refuse;
Their silver and their gold will not be able to deliver them In the day of the wrath of the Lord;
They will not satisfy their souls,
Nor fill their stomachs,
Because it became their stumbling block of iniquity.

It was explained to me many years ago by a man much older and wiser than me. “Back in the 1880s you could buy a Colt Single Action Army revolver and a suit of clothes for a $20.00 gold piece. Today, if you have a $20.00 gold piece from the 1880s, you still can.” I suspect that is still true today.

“Gold has a different purchase price in each country’s Fiat currency. “

Which country is lowest and which is highest?

I would like to buy low and sell high for an easy trade

I remember back in the early 70’s collecting empty soda bottles to turn in for the Bottle Deposit ($0.05 for up to a 16oz bottle and $0.25 for a Quart bottle) and got enough in a few hours to buy a ticket to Astroworld Park in Houston. IIRC the tickets were like $18-$22 each. A small fortune for a Kid those days.

The next year We were All working after school at a shop making Displays and Loading them into 18 wheeler trucks for the Annual Oil Show at the Astrodome and Astrohall. We were bringing home $500.00 a week. We were living like Kings that year !!! And being stupid Kids We pissed it away on cars and parties...
To know then what We know now would have been really nice...

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