Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench

Will 2013 be another volatile post-election year for gold?

IMG Auteur
Published : November 05th, 2012
571 words - Reading time : 1 - 2 minutes
( 1 vote, 4/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...

 

 

 

 

The prevailing wisdom is that a Romney presidency would be viewed as gold negative and that a second Obama terms would be seen as gold positive. However, the history of post-election years since 1971 suggests that the gold market is decidedly indifferent, or apolitical, if you will, about the outcome of presidential elections.

Here is a rundown gold’s performance in post-election years:

1973………+73% (Republican victory)

1977………+21% (Democrat victory)

1981………-32% (Republican victory)

1985………+7% (Republican victory)

1989………-3% (Republican victory)

1993………+20% (Democrat victory)

1997………-21% (Democrat victory)

2001……… 0% (Republican victory)

2005……… +20% (Republican victory)

2009………+24% (Democrat victory)

Of the six “up” years following an election, three occurred when the Republicans won the White House and three when the Democrats triumphed. Of the three “down” years, two occurred following a Republican victory and one when the Democrats won. The average gain in the six “up” years was 27.5%. The average loss in the three “down” years was 18.6%.

The volatility of post-election years in the gold market stands in stark contrast to the relative equanimity of the gold market in pre-election years – a phenomena borne out by gold’s relatively quiet performance thus far in 2012.

Here’s how gold performed during election years:

1972……….+40%

1976……….-4%

1980………+5.4%

1984……… -11%

1988……… -15%

1992………-5%

1996……… -5%

2000………-3.5%

2004……… +3.5%

2008……… +3%

2012…….. + 7% (thru October)

For those who insist that a Romney victory would translate to a down year in 2013 for the gold market, it might be important to note that since 1971 there have been two secular bull markets in gold and both were launched during the presidential terms of Republicans. The first came under Richard Nixon in 1973-74 and the second under George Bush in 2002-2003.

Though it is difficult to make a connection between gold’s post election year performance and the politician who happens to be sitting in the Oval Office, it would be a mistake to assume that politics doesn’t play a role in the gold price. In short the policy matters not the political party orchestrating it.

Congress deliberately staggered the term of office for the Fed chairman to overlap presidential elections by two years in order to keep the electoral effect on monetary policy to a minimum. That means we are going to get two more years of Ben Bernanke’s policies no matter who occupies the White House. The “money helicopters” will take to the sky at the earliest sign of trouble in the banking system or the economy in general. The “technology” available to the government called “the printing press” will be cranked up and fully engaged should the unemployment rate return to pre-election year stickiness. Barring an unlikely early resignation, the lame duck at the Federal Reserve might play a more decisive role in next year’s gold market than the occupant of the White House. As such, the historic volatility in the gold market that normally follows an election year could very well work in the gold owner’s behalf.

Michael Kosares

_________________

***** For more information on the effect of Tuesday’s election on the gold market, please visit our latest USAGOLD-TV RoundTable. (This posting is an extension of arguments skillfully presented there.)

***** To keep up with the principle trends impacting the gold market, we invite you to sign-up for our regular newsletter, USAGOLD NEWS, COMMENTARY & ANALYSIS. It enjoys a five figure subscription base, it’s FREE of CHARGE and it’s available now by going to the link.

 

 

<< Previous article
Rate : Average note :4 (1 vote)
>> Next article
Michael J. Kosares is the founder of USAGOLD-Centennial Precious Metals, Inc., the author of "The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold", and numerous magazine and internet articles and essays. He is also writes a popular weekly Client Letter on the gold market. Mr. Kosares is frequently interviewed in the financial press and is well-known for his on-going commentary on the gold market and its economic, political and financial underpinnings. He has over 30 years experience in the gold business. USAGOLD-Centennial Precious Metals is one of the oldest and most prestigious gold firms serving private investors in the United States, Europe, Canada and Australia.
WebsiteSubscribe to his services
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
The Revisionist Theory and Histo...
05 Febovertheedge
"The key is in the hand of the U.S. government. It is the same key that was used to lockthe U.S. Mint to silver in 1873, and to gold sixty years la...
First Report since April, 2014
05 FebS W.
Here I was just 2 days ago thinking whatever happened to that evangelical silver guy. Low and behold up he springs, like some spirit from the g...
LBMA Silver “Price”: A Perfect S...
03 FebS W.
There is no doubt that the Comex can be used as a casino for those who want to trade Silver up/or down or maybe some just wish to take a small punt...
LBMA Silver “Price”: A Perfect S...
30 JanOzSILV1
Bron refuses to EVER admit this market is a Casino and the disconnect between Paper and Physical is a big clue to this
LBMA Silver “Price”: A Perfect S...
30 JanS W.
Usually I enjoy Bron's take on things,but to be perfectly honest, I can't understand 95% of what he his on about here. I get the feeling that h...
ANOTHER NAIL IN THE U.S. EMPIRE ...
30 JanDemosthenes0
Very naive and pretentious article! The author thinks he knows everything and yet knows next to nothing. Shale gas producers are neither stupid n...
LBMA Silver “Price”: A Perfect S...
30 JanOzSILV1
I'd say that this was More than a Farce , 5,000 silver futures contracts within a minute or two !!!!! ( some charts indicate NO increase in Vo...
LBMA Silver “Price”: A Perfect S...
29 JanJ T.
"Criminal" is not the same as "stupid"...and it's not a farce when it is intentional. The only Farce has to do with the criminals in positions of ...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Lara Expl.(Cu-Zn-Au)LRA.V
Revised Resource Estimate Report Filed for Maravaia Copper Gold Deposit
CA$ 0.34+1.47%Trend Power :
Corporate news
Black HillsBKH
Black Hills reports 4Q loss
US$ 50.90-0.59%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
Gasoline Inventories Rose Last Week despite Fall in Production
US$ 24.85-6.44%Trend Power :
Corporate news
United States Steel(Fe-Sn)X
U.S. Steel (X) States Ratification of Labor Agreements
US$ 7.94-3.64%Trend Power :
Corporate news
Black HillsBKH
4:34 pm Black Hills Corp beats by $0.04, misses on revs; guides FY16 EPS below consensus
US$ 50.90-0.59%Trend Power :
Corporate news
Black HillsBKH
Black Hills Corp. Reports 2015 Fourth Quarter and Full Year Results
US$ 50.90-0.59%Trend Power :
Corporate news
Transcanada PipelinesTRP.TO
TransCanada to Sign Substantial Agreement to Benefit Québec Economy
CA$ 48.65+0.16%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
4Q15 Crude Oil Prices: Fallout for the Energy Sector and SPY
US$ 24.85-6.44%Trend Power :
Corporate news
Comments closed