29 AUGUST 2024
If you’ve read the earlier posts in this series, you can probably guess the answer – US elections do not tend to have a significant effect on gold’s performance, whichever party wins.
The chart below does suggest that gold does slightly better in the six months leading up to Republican win than it does when a Democrat takes office, but the six month period thereafter sees the reverse. Moreover, given the small number of observations and variability, the results are not statistically significant. Looking out over the full term in office, gold does not outperform consistently during the period depending who is in power.
Of course, maybe this time will be different, especially given the current extent of political polarisation and ongoing concerns over the escalating US debt burden. Given the stock market advances this year, now may be time to ensure that your portfolio also has robust longer-term hedges – a role that gold has traditionally played very well given its “safe haven” status. Just ensure that any allocation is made for reasons other than which party you think will come out on top in November.
The content of this communication is for information purposes only. Bentley Reid believes that, at the time of publication, the views expressed are a matter of opinion but cannot guarantee replication of depicted performance. Viewers intending to take action based upon the content of this communication should first consult with the professional who advises them on their financial affairs. Capital invested will be at risk, and you may get back less than you invest. Neither the publisher nor any of its subsidiaries or connected parties accepts responsibility for any direct or indirect loss suffered by a recipient as a result of any action or inaction, in reliance upon the content of this communication.
Key trends in portfolio management
Is India Leaving the “Fragile EM” Era Behind?
Discussion on the unrest in the Middle East
