Gold and That Election Thing
“Obama is just the man for the job if you’re hoping for a significant increase in the gold price,” writes Jan Skoyles.
Uh-oh, here we go again: Another reason to “root for” Obama, even if you follow our guidance… and Doug Casey’s… and you don’t vote tomorrow.
Full disclosure: Ms. Skoyles is a Brit — but a highly perceptive one, as you’ll soon see: She heads up research at a U.K. bullion dealer called The Real Asset Co.
“The evidence showing Democrats destroying the dollar more than Republicans, and second-term presidents benefitting gold prices even more during their second innings, is overwhelming,” Ms. Skoyles writes.
“Even though Democrats prove to be the best party for gold investors worried about the gold price, the Republicans don’t do too badly themselves — accounting for a net increase of 121.27% across their terms in office since Nixon, versus 358.68% for the Democrats.”
What’s more, “Our research also found presidents granted a second term have a marvelous time showing everyone just how much money they can spend, devaluing the currency further and making that precious metal glister even more.
” Then again, “If the Republican gets in, then theoretically, the gold price won’t increase by as much. It may even drop slightly in the first year or so, but look at it as an excellent buying opportunity. Who sits in the White House is not something that fits in gold price fundamentals these days. Gold is going up, just how quickly depends on the president.”
Gold is getting back on its feet after getting knocked around on Friday – up $7 as of this writing to $1,684.
The $40 sell-off coincided with a “better than expected” jobs report, but as the saying goes correlation isn’t causation. Technical selling and profit-taking by weak hands also figured into the mix. Interestingly, many bullion dealers reported heavy “buying on the dip” from institutional investors Friday.
Whether it’s pre-election jitters, or another factor — or maybe no factor at all — a slump in sales of bullion coins from the U.S. Mint might finally be turning around.
October was the first month this year in which sales of Gold Eagles outpaced sales from the same month a year earlier.
The pattern is the same for silver. But it’s not shaping up to be a fifth straight record year for silver bullion from the Mint — barring a major market dislocation before year-end. Through October, Silver Eagle sales this year total 28,948,000 ounces — 21% below last year’s pace.
Gold Eagle sales are down 40% for the same period.