In 2020, Biden and Harris presented themselves as a team who would bring Republicans and Democrats together, challenging Trump’s divisive and populist rhetoric of making America great again. Although Trump ultimately lost that election, his popularity remained steadfast among his base.
During the first debate between Harris and Trump, which took place on September 10, 2024, Harris focused on her platform’s key economic policies, including increased support for first-time home buyers, families and small businesses. She was also committed to investing in diverse forms of energy, including renewables and oil and gas, to reduce dependence on foreign oil.
Meanwhile, Trump maintained a focus on the key issues of his base including policing and immigration, but also discussed his economic plan that would see continued economic pressures on trade with China by increasing tariffs.
When it came to the conflict between Russia and Ukraine, Harris pledged her support for both Ukraine and other US allies in Europe. While Trump did not say he supported Ukraine, he said he was also committed to ending the war, and planned to push Ukrainian funding to European partners while attempting to bring Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy to the negotiating table.
The gold price has climbed significantly under both administrations. It is currently holding at historic levels around the US$2,500 mark, more than double its price when Trump took office in 2017. Interest rates are expected to see cuts following a Federal Open Markets Committee meeting on September 17 and 18, which could give gold a further boost in the run-up to election day.
How does gold typically perform post-election, and how has it moved during Trump and Biden’s presidencies? While the past doesn’t necessarily dictate the future, reviewing gold price trends can help investors plan their election strategy.
Looking at past US elections can provide insight on how the gold price may move in the days and weeks following November 5. However, on a broad scale, changes post-election tend to normalize fairly quickly.
In 2016, when Trump ran against Hillary Clinton, the gold price climbed by about US$50 in the weeks leading up to the November 8 election, peaking at just above US$1,300 per ounce on November 4. Following Trump’s win gold fell substantially, moving as low as US$1,128 in mid-December. Following that low point, the gold price began to rebound, and by the middle of January 2017 was once again above the US$1,200 level.
The 2020 election was on November 3, and in the week leading up to the vote gold was trading at around US$1,900, although it fell as low as US$1,867 on October 30. After the election, the gold price performed positively, spiking from US$1,908 on the day of the vote to US$1,951 on November 6.
The gold price rose substantially during Trump’s presidency, increasing from US$1,209 when he assumed office on January 20, 2017, to US$1,839 on his final day, which was January 19, 2021.
While these gains can’t be directly attributed to Trump, his actions helped shape the geopolitical landscape both in the US and abroad. During his tenure, trade wars with both allies and competitors were in focus.
Gold has also seen sizable gains during Biden’s presidency. The price of gold was US$1,871 when he took over from Trump on January 20, 2021. And while Biden’s term as president is not over for another five months, as of July 23, the gold price was trading at about US$2,409. It reached a new record on July 17 of US$2,474.
Again, it’s hard to say how many of the Biden administration’s policies directly influenced these gains. Geopolitical conflict and black swan events outside of his control all affected the gold market during this time.
For example, Biden and Harris entered office one year after the start of the COVID-19 pandemic. Inflation was ballooning, which typically leads to higher gold prices. The US Federal Reserve has worked to counteract inflation and strengthen the US dollar by raising interest rates beginning in 2022, a move that tempered the gold price for a time.
Biden came into office on a promise of restoring the US’ place in the global community, and while his administration did close rifts among important trading partners like Canada and the EU, tensions with China remain. This rift is a holdover from the Trump administration’s more isolationist policies, but has also been representative of a more competitive global trade landscape as the BRICS nations seek to move away from the US dollar and America’s influence on world economics.
Additionally, Biden’s role in implementing a strict set of sanctions against Russia following its invasion of Ukraine in February 2022 deepened a divide between the US and Russia, as well as the other BRICS nations.
Though this year’s presidential election may have a limited effect on the price of gold, a rate decision by the Fed may impact the metal’s price. Decisions made by the US central bank, which is not controlled by the president, have a strong impact on the US dollar and thus often impact the gold price as well.
The Federal Open Market Committee, which is the board that ultimately decides whether to increase or decrease interest rates, is set to meet from November 6 to 7, just one day after the November 5 election.
After strong expectations for cuts at the beginning of 2024 didn’t pan out, with the Fed still holding rates steady as of July, market participants now expect the Fed to make its first reduction in September.
Gold tends to rise when rates are lower and fall when they are high, but this year gold has reached all-time highs in the face of elevated rates. A post-election rate cut could boost gold further, but with a Fed meetings still to come in September, it’s not yet clear how the November meeting will play out.
Which party controls Congress, which is comprised of the House and Senate, has had a far stronger influence on the gold price. Under Democrat-controlled Congresses, gold has averaged a 20.9 percent gain, compared to just 3.9 percent when Congress is controlled by Republicans. In cases where neither controls Congress, gold has averaged 3.5 percent.
With that in mind, investors should consider the effects of policies enacted not only by the executive branch of the US government, but also by Congress and the Senate. Those hoping to use the immediate aftermath of the election outcome to their advantage should also proceed with caution — when it comes to gold, past elections haven’t provided great investment opportunities, with losses and gains typically being short-lived.
This is an updated version of an article first published by the Investing News Network in 2020.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
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