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| Money Metals News Alert | October 14, 2024 – Gold and silver prices fell sharply in the early part of last week before recovering.
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Gold ended the week essentially flat, while silver lost roughly $0.60/oz.
Silver shorts appear to be battling a breakout in prices above the key $32.50 level.
The equity markets moved higher, and the dollar strengthened versus other major currencies.
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Bonds, however, fell once again. The 10-year Treasury yield has been surging higher since September 27, which must be discouraging for Fed officials who are trying to engineer lower interest rates.
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 | Gold : Silver Ratio (as of Friday's closing prices) – 84.2 to 1 | | |
| How the November Election Could Impact Precious Metals Investors | | | |
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Donald Trump is picking up steam in recent polling. Bullion investors are tuned into presidential politics, this year perhaps more than ever. They wonder what the November election might mean for markets.
Absent some radical development, such as an assassination, either Trump or Harris will be president come January. Investors should prepare for either outcome.
If Trump wins, will markets behave similarly to what happened during his first term? Bullion prices fared well, gaining between 40% - 50%. Silver prices rose from the $17 range in November 2016 to a bit over $24/oz by election day in 2020. Gold went from under $1,300/oz to more than $1,900/oz.
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Trump's first term was also a buyer's market for physical bullion. Demand was relatively weak and premiums (the amount above melt value that it costs to buy bullion products) were the lowest they have been in recent times.
Investors anticipating a repeat of this market action could view his reelection as an opportunity to buy – bearing in mind that any post-election softness in investment buying of precious metals could also translate into a temporary dip in spot prices.
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Likewise, the election of Kamala Harris, could be viewed as an opportunity based on what happened to prices during her tenure as Vice President. Thus far, gold and silver are up 40% and 30% respectively.
There was unprecedented demand for bullion in the early part of the Biden presidency. COVID-19, geopolitical turmoil, and lack of faith in Biden and his government motivated waves of Americans to buy gold and silver coins, rounds and bars.
Demand for physical bullion drove premiums through the roof, though they have since come down.
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Using history as a guide to timing your investment might make sense, but there is no assurance history will repeat, or even rhyme. Much has changed in the world. While the precious metals markets are sensitive to geopolitics, basing investment decisions solely upon which person sits in the oval office would be beyond foolish.
Consider; it isn't just the past two presidencies which have mattered.
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Metal prices trended higher during the last four presidential administrations, because they all had something fundamental going on in the background. Central bankers went completely berserk. Among other things they have enabled the government to grow unrestrained by serving as the buyer of last resort for metastasizing federal debt.
The sharp swerve toward centrally planned markets over the past 24 years has also undermined confidence in key institutions, which stimulated demand for precious metals. This will almost certainly continue, regardless of what happens in November.
Americans and people around the world are living in chaotic and inflationary times. The upcoming election isn't likely to change that.
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| This week's Market Update was authored by Money Metals Director Clint Siegner. | | |
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