Gold Rose After 8 Of The Last 13 Midterms. The Exceptions Are The Interesting Part

Gold has recorded positive returns in eight of the last 13 US midterm election cycles, according to historical price data. The trend is drawing attention after the Nov. 3 elections, as gold and global equity markets respond to the latest political developments in Washington.

Democrats secured control of both chambers of Congress, while US stock markets rallied. The Dow Jones Industrial Average jumped 3% to close at 53,356.12. The S&P 500 advanced 1.6% to 7,688.62, while the Nasdaq Composite gained 1.4% to settle at 25,736.51.

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The positive sentiment carried into Indian markets on Nov. 5. The Sensex and Nifty 50 both gained around 2.4%, supported by stronger global market sentiment and the rally on Wall Street.

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Gold also remained in focus. On the domestic commodity market, MCX gold futures traded at Rs 1,44,950 per 10 grams at 4:04 pm on Nov. 5. This compares with Rs Rs 1,38,000 per 10 grams on Nov. 2.

Spot gold has risen from $3,880 to $4,130 between Nov. 2 and Nov. 5, reflecting a gain of 250 points or 6.4% in just three days.

However, the relationship between US midterm elections and gold prices is not straightforward. Historical returns vary sharply from one election cycle to another. Events such as changes in monetary policy, inflation and geopolitical tensions often play a bigger role in determining bullion's direction.

What Happened To Gold After Previous US Midterm Elections?

The historical record contains some striking differences. The strongest performance came after the 1978 midterm elections, when gold prices climbed 90.3% over the following 12 months.

That rally unfolded during a period of considerable global uncertainty. The second oil shock, the Iranian Revolution and the US hostage crisis increased concerns about economic and geopolitical stability. These developments strengthened gold's appeal as a store of value.

The 1974 election cycle produced a very different result. Gold lost 22% over the next year, marking the beginning of its first major bear market during the floating-currency era. The contrast between these two periods highlights how external economic conditions can shape bullion returns, regardless of the political environment.

More recent cycles also offer useful examples. Gold rose 20.5% in the 12 months following the 2018 midterms. The 2022 election cycle delivered a 15% gain over the same period.

The 2010 midterms provide another interesting case. Republicans won control of the House of Representatives, while Democrats retained the Senate. A day after the election, the Federal Reserve announced a $600 billion Treasury purchase programme under its quantitative easing policy. Gold subsequently gained 26.9% over the next 12 months.

The Federal Reserve's announcement is particularly relevant because it shows how monetary policy can influence gold prices during an election cycle. Lower interest rates and expectations of additional liquidity can support bullion by reducing the opportunity cost of holding a non-yielding asset.

These historical examples provide context for the current market environment. They do not establish a direct link between election results and gold returns. Investors also need to consider the broader economic conditions surrounding each election.

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Central Banks And Gold ETFs Support Underlying Demand

While political developments influence short-term market sentiment, institutional demand remains an important part of the gold market.

The World Gold Council's Q3 2026 Gold Demand Trends report, released on November 3, showed that global gold demand declined 1% year-on-year to 1,369 tonnes. However, the value of that demand increased 22% to $188 billion, reflecting the impact of higher gold prices.

Central bank purchases remained a major source of support. These institutions bought 321 tonnes during the quarter, a 42% increase from the same period last year. Their purchases for the first nine months of 2026 reached 675 tonnes, up 6% year-on-year.

Investment demand also remained strong. Gold-backed exchange-traded funds attracted 211 tonnes of inflows during the quarter. This pushed global holdings to a record 4,256 tonnes.

Consumer demand presented a different picture. Jewellery demand fell 17% to 313 tonnes, while purchases of bars and coins declined 19% to 268 tonnes. Higher prices appear to have weighed on these segments.

Technology-related demand moved in the opposite direction. It increased 3% to 85 tonnes, supported by demand linked to artificial intelligence manufacturing.

On the supply side, mine production reached a quarterly record of 1,071 tonnes, an increase of 3% year-on-year. Recycling moved lower by 8% to 314 tonnes.

World Gold Council Senior Markets Analyst Louise Street said geopolitical risks and financial market stress could support gold demand. She also pointed to rising interest rates and mixed inflation expectations as potential challenges for the metal.

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