I read an article not long ago where it was mentioned that the reasoning for the price of gold to be in the $1200 range as it is right now was because we are in an election year. The author mentioned that gold always had a tendancy to suffer during election years. Being a bit curious I decided to check out a few past elections to see if this was true.
At first glance, you could very well figure that maybe the writer was correct because after all, the price of gold is well off it's yearly high. As of today the price of gold is $1,270 and the high of the year was $1,365.00. So at this point in time, the gold price is $95 an ounce below the high. Gold's low was the first week of January and the price was $1,078 so at this point in time we are $192 higher than the low, which would mean that we are closer to the 52 week high than we are to the 52 week low.
But for the sake of visualization I decided to grab a few charts of the gold price during elections back to 2000 when gold was at the low just to see if there was a sell off in the gold price during election years as this author had stated. One quick look at the chart below will tell you the complete story.
In 2000 the gold price at election time was at its lowest for the year, however during the 2004 election you can see that the gold price is well off the 52 week low. In fact the price is on a rise. In 2008 the price was on a 52 week low but in 2012 aside from a slight dip with a quick rebound around election day the price was closer to the 52 week high than it was to the low.
Going by the last four elections the author was correct for half of the elections by stating that the gold price was suppressed or under pressure. However there was two years where gold was not. Infact it was far from being under pressure.
With less than two weeks left until the election this year we could have almost any kind of scenario. Gold could very well get slammed by the bullion banks and comex down to another low, there could very well be some kind of news like a war with Russia or something that would turn gold into a safe haven and it would rise, Hillary might get arrested, or the election could just come and go and the price of gold will do nothing.
I left a question mark in the above chart for you to decide. In reality though, the bigger question is what will gold do AFTER the election??
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