Tuesday turned out to be a good day for Democrats across the country, but whether it becomes President Joe Biden’s golden ticket to a second term in 2024 remains to be seen.

Speaking of gold, U.S. Money Reserve, one of the nation’s largest distributors of government-issued precious metals, analyzed how the results of U.S. presidential elections influence the price of gold.

Based on data over the past several presidential election cycles, the spot price of gold was more likely to perform worse following Republican victories than Democratic victories.

Since 1980, in the two-week periods following a presidential election, Democratic victories saw an average gold price increase of 0.5% while that same period for Republican victories produced an average price drop of 1.1%, according to the U.S. Money Reserve study.

The impact is even greater during the period between Election Day and Inauguration Day. Democratic presidential election wins led to an average gold price increase of 1.5%, while Republican wins brought a 5.5% decrease on average.

“This effect may be attributable to gold buyers associating fiscal conservatism of Republican presidents with lower rates of inflation and a stronger dollar. On the other hand, progressive fiscal policies that favor increased government spending may be perceived by gold buyers to produce higher rates of inflation,” wrote Brad Chastain, U.S. Money Reserve director of education.

To determine how the price of gold changed after each presidential election, U.S. Money Reserve researchers calculated the two-week change in the spot price of gold following Election Day. They also calculated the change between the election and the inauguration, as well as the four-year change. The four-year change compares the spot price of gold between the days before each presidential election.

Source: U.S. Money Reserve analysis of gold spot prices

Gold is commonly used as a safe haven asset that retains its value during tumultuous times, according to Chastain. The demand for gold and its price tend to rise during American periods of economic instability, high inflation and low interest rates.

Economic turmoil and inflation in the 1970s saw a corresponding run-up in the spot price of an ounce of gold: from $176 in January 1978 to $653 in January 1980 — a 271% increase in just a two-year period, according to Chastain.

Similarly, during the subprime mortgage crisis and Great Recession, gold prices climbed over 119% from October 2008 to August 2011, he wrote. More recently, fears of global economic downturn starting in 2018 preceded the COVID-19 pandemic and subsequent inflation, all leading to a nearly 66% run-up of the gold spot price from September 2018 to July 2020.

Is now a good time to invest in gold?

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The price of gold as of Wednesday was $1,966 per ounce, down 0.13% from $1,969 the day before, according to Forbes Advisor.

Compared to last week, the price of gold is down 1.84%, and it’s up 7.26% from one month ago. The 52-week gold price high is $2,006, while the 52-week gold price low is $1,821.

Investing in gold hit an 11-year-high earlier this year, CBS News reported last month. Still, gold prices have been volatile lately and the long-term forecast for where they could be headed into 2024 is unclear. 

Per Investor’s Business Daily, “While a stubbornly strong dollar would typically keep a lid on gold prices, a clear reason for the surge of interest in the precious metal stands out: unrest in the Middle East. War breaking out between Israel and Hamas earlier this month provided a notable upside catalyst for the gold price rally.”

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