Written by Arkadiusz Siero?

We reveal how gold, silver, PM mining stocks and the S&P 500 performed each year of the 4-year presidential election cycle, on average, and suggests how one should invest in the various assets in the years to come.

Gold’s Average Annual Return In Presidential Election Years From 1973 to 2016

The chart below shows how gold performed each year of the 4-year presidential election cycle from 1976 to 2016:

(…Investors should be aware that [the above] analysis is based on rather few observations. It is very sensitive to the period chosen and the pattern does not always hold. For example, during presidential election cycle 1973-1976, gold performed the strongest in the first year after Nixon’s re-election…)

[As a result of the above caveat,] we are a bit skeptical as to whether we can apply such a historical analysis to the current environment of sluggish global economic growth and negative interest rates in many countries, but the difference between gold’s performance in a post-election year and other years is too large to ignore.

…[In the chart below] we present the average annual returns of gold (1972-2015; yellow line), silver (1972-2015; blue line), the S&P 500 (1948-2015; green line) and the gold equity indices XAU (1984-2015; purple line) and HUI (1997-2015; red line).

As can be seen, there is hardly any clear pattern: