The 2016 presidential election is well underway; there have been a number of surprises early in the race and there is uncertainty about how the candidate field will shake out, and how the elections will all affect the precious metals markets.
Many of us believe that history repeats itself, so to predict what 2016 will hold for the price of gold and silver, we took a look back to previous years and elections:
- Markets fall: Historically, markets fall during the last year of a president’s second term. You may recall that during the last year of George W. Bush’s presidency markets fell by 41%. The fall is usually tied to the fact that markets don’t appreciate uncertainty, which presidential election years create. Pair that with this year’s concerns over the Chinese market and falling oil prices, and it wouldn’t be surprising if markets continued to fall.
- Precious metal prices swing up and down: Gold historically tends to slump prior to an election and then hit a high right after, regardless of presidential race outcome. While gold began a downward slide soon after the 2012 election, it only did so after topping out in price right after the election occurred, suggesting a speculative claim on gold in a presidential election year is worth considering. Moreover, silver tends to follow gold in its election year journey.
What the prices of gold, silver and other precious metals will actually do remains to be seen. Even with the recent strengthening of the dollar and low inflation rates, the looming low oil prices and weaker currencies abroad may continue to weigh on markets, while lower industrial demand may pull on the prices of some precious metals.
And yet, when markets are in flux, investors often turn back to the standby of standbys in wealth storage, gold. How do you think the precious metals markets will behave as we near election day?
Check out Provident’s wide selection of gold and silver bullion, or keep reading for more on factors affecting gold prices.
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“Gold historically tends to slump prior to an election” pretty spot on considering this was written in February!
Hillary election will mean more deficit and debt that we will never pay.
Lunatic Fringe is not a lunatic but a very smart person.
I am new at the investment of gold and silver. I am taking it slow to learn as much as I can so that I purchase correctly and know the meaning of many words used in this world. I do have one question. I would like some explanation of recycled gold. (its value)
Would you mind telling us a bit more about what you mean by recycled? Jewelry maybe? Really, gold is gold. It’s value is based on weight and purity. If you have a 10K gold chain for example, it’s worth less than a 14 K gold chain… more gold.
When all heck breaks loose I’ll be glad I spent these years stacking. I never valued a coin for how shiny it was like some do. I always appreciated the weight of my hoard growing into several hoards of their own. Most people invest in the future hoping it will all turn out rosey, I just don’t see it. There are a lot of us out here who believe cash won’t be worth the paper it’s written on anyway. So if the end comes, don’t try to impress us with shiny coins, weight is all that matters. At least for me anyway. Happy hoarding to all my fellow survivalists and good luck to us all.