The Golden Hand of Politics: How Democrat Presidents Influence Gold Prices
Table of Contents
Gold: The Ultimate Medium of Exchange
Gold has withstood the test of time, with its demand spanning civilizations and conflicts. It’s the ultimate medium of exchange that shields investors from inflation and has the potential to beat the S&P 500 during periods of economic uncertainty.
How Gold Performed Under Democrat Presidents
But does its performance vary if the President of the US is a Democrat or a Republican? In this article, we’ll explore how precious metals have performed under previous Democrat’s presidencies.
How Gold Performed During Biden’s Presidency
Despite its price surge in 2024, gold did not perform well for most of Biden’s presidency. The physical asset lost 3.73% in 2021 and gained 2.08% in 2022 before rallying by 13.14% in 2023. While gold got off to a slow start during the Biden administration, the asset’s big year-to-date rally has so far exceeded its gains in 2020 — the best year for gold during Trump’s presidency.
What Affected Gold Prices
Democrats, historically, have been tied to sizable government spending packages. Policies like the Inflation Reduction Act, while effective in reducing consumer prices, pumped money into the economy and drove up gold prices. However, it has been the Federal Reserve’s monetary policy that has had the most impact on gold prices during the Biden administration.
What Affects Gold Prices
Inflation, interest rates and geopolitical uncertainty are three primary forces that impact gold prices. Gold tends to gain value as inflation increases. Inflation reduces the purchasing power of fiat currencies, which investors use to buy gold.
More from Money:
Best Gold IRA Companies
Best Online Gold Dealers
Beginner’s Guide to Investing in Precious Metals
Source link
