Precious metals rose by an average 9.4% (for gold) and 11.4% (for silver) in the five elections since 2004. All of these elections were hotly contended, especially the last election, Trump vs. Biden. That rematch is on track this year, with even more contention, as both candidates are not only older (78 and 82 on Inauguration Day, respectively), but both are under legal and political scrutiny like never before.

In 2020, silver rose 47.4% and gold rose 24.4%. Part of this rise was the aftermath of COVID but much of it was also due to the controversy over the election process and its long-unresolved results. That could be repeated this year, even though each party may draft a better, younger candidate by convention time.

The only negative number in the chart below is silver in 2008. During that year, silver rose from an opening price of $14 to $49 in April 2008 before falling to nearly $10 in December, during the worst panic months of the Great Financial Crisis of 2008. So, your investment success was dependent on when you bought gold and silver in 2008.

Election Year    Gold                 Silver               Election results

      2004           +5.0%             +14.2%             Bush (Rep) beat Kerry (Dem)

      2008           +3.4%             -26.9%             Obama (Dem) beat McCain (Rep)

      2012           +5.7%             +6.3%             Obama (Dem) beat Romney (Rep)

      2016           +8.6%             +15.9%             Trump (Rep) beat Clinton (Dem)

      2020           +24.4%            +47.4%            Biden (Dem) beat Trump (Rep)

      2024           ----??----           ----??----

Average            +9.4%              +11.4%

In addition to a controversial presidential race, we also have the highest interest rates in the last 15 years. During the Obama years, the Fed funds rate was held near zero 0% to 0.25% from 2009 to 2016. After raising rates to barely 2% late in Trump’s single term, interest rates returned to zero from March 2020 to March  2022. Since mid-2022 rates have been above 5% and will likely remain that high until at least mid-2024.

Also, we have seen two active wars start in Biden’s term – one between Russia and Ukraine, and another between Israel and several Iranian proxies, including Hamas. Plus, there is the potential for war as Venezuela is threatening to take control of Guyana and China threatened to invade and annex Taiwan.

So far this year, the U.S. Dollar Index has risen by 3.4%, from 101.3 to 104.8, as it has been the main “crisis hedge” for most investors, despite soaring U.S. Treasury debts. There will come a time, however, when investors lose faith in dollar debt and they switch to gold, sending gold soaring.

U.S. debt was already downgraded twice last year, by Fitch in August and Moody’s in November, so a third downgrade could send more investors out of the dollar and into other currencies or gold as a crisis hedge.

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Mike Fuljenz, president of Universal Coin and Bullion, taught classes on grading and counterfeit coin detection for over 20 years. He has also assisted the Texas Attorney General with drafting consumer alerts on coins and on counterfeits. He has lectured and conducted training for law enforcement with the Numismatic Crime Information Center. He has been a member of the National Anti-Counterfeiting Task Force, as well as assisting the Federal Trade Commission with their consumer alerts on coins.