Midterm Election and the Price of Gold
This week, the midterm elections were held in each state. Chances are, you have heard plenty about it on the news and hopefully got to the polls and voted yourself. Even though this is not the year a president is voted into office, a lot can happen that will affect the price of gold. Keep reading to learn more about the midterm election, how it impacts the price of gold, and the right time to buy gold.
What to Know About the Midterm Election
According to the US Embassy, most of the attention of midterm elections is focused on the two chambers of Congress: the U.S. Senate and the House of Representatives. Members of the House are elected for two-year terms, so all 435 seats are decided during the midterm elections. Senators are elected to staggered six-year terms. A third of the 100 seats are up for grabs in any midterm election.
Whoever controls the House or the Senate controls the agenda,” says Gary Nordlinger, a professor of politics at George Washington University. The majority party determines who leads important congressional committees. A president’s ability to accomplish his agenda has everything to do with whether his party controls the two houses of Congress, says Nordlinger.
While many state and local elections take place on the same day as midterm elections, state and local elections can take place in any year, at various times throughout the year. These include statewide elections for governor or state legislature, citywide votes for mayors, local elections for judges and local officials, as well as ballot initiatives at the local or state level.
While state and local races don’t usually grab national headlines, “the overwhelming majority of legislation in the country is passed at the state level, not the federal level,” he says.
How the Midterms Affect the Price of Gold
The midterms were just held this week, so seeing whether it impacts the price of gold has yet to be seen this year. However, there are many things that impact the price of gold, including changes in government and civil unrest.
According to Kitco, the gold market saw another $50 move higher as Americans cast their final ballots in the U.S. midterm elections on Tuesday. The rally is a follow-up to a similar move seen this past Friday, with the U.S. dollar retreating and recession concerns taking center stage. Markets are carefully following midterm elections news in the U.S., with polls forecasting the Democrats losing the House and the Senate. The first vote tallies will come in on Wednesday, but the final results might not be known immediately, with all 435 seats in the U.S. House of Representatives, 35 U.S. Senate seats, and 36 governorships up for grabs this time around.
What Impacts the Price of Gold
Some of the things that impact the price of gold include:
- Supply and demand
- Market risk
- Opportunity cost
- Economic issues
- Government
How to Know the Right Time to Buy
With the results of the midterm elections slowly trickling in, you might be asking yourself whether the right time to buy more gold is now or to hold off until the dust settles. The great thing about gold is that there is no better time to buy gold than now. Gold always holds its value and grows over time, which makes it the perfect investment for retirement.
Gold is also:
- Hedge against inflation. As the value of the dollar decreases, so does the value of your savings account. What you have saved today will not be worth the same when you retire. That is why it is important to invest in gold—so that as inflation rises, the value of your savings account stays the same when gold is part of the equation.
- Gold is never valued at zero. In its history, gold has never been valued at zero. It has a strong reputation as being a great investment, and few would dispute this.
- Highly liquid. Need cash quickly? Gold is one of the most liquid investments you could possibly have. It is so easy to buy and sell gold that you will have no problem getting the cash you need quickly. Unlike other investments, such as in small businesses or real estate, where it takes more time to get your money—sometimes years or more.
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