The Election Outcome Will Likely Boost Gold’s Price … and Weaken the Dollar

Although October was rough on gold and silver, there is some hope for a recovery after the Democratic Party swept of Congress in this week’s election. That’s because gold tends to do better during times when Democrats control the purse strings of deficit spending, meaning they are consistently more liberal when it comes to spending. Gold has also tended to do well under Democratic Presidents, such as the gold bull markets of 1976-80 under Jimmie Carter, the 2008 to 2011 surge in Barack Obama’s first term and the 2021-24 gold surge under Joe Biden. Now, gold is surging following Tuesday’s election, as Americans historically have great hope for newcomers and want to “throw the rascals out.”

The House has flipped in six of the 10 midterm elections since 1990 and Senate control has flipped four times. The biggest swings in the House came during the Tea Party revolution in Obama’s first midterm election in 2010 and in the 1994 Republican Revolution in response to rising rates and “Hillary care,” a Clinton-created task for on national medical coverage.

The main reasons behind the Democrats winning and far outperforming polling were dissatisfaction with high gas and grocery prices. I heard this repeatedly from family, friends, customers and our Texas lobbyist that helped us get precious metals sales tax-free in Texas in 2012. Final polling in Texas missed toward Democrats by 8-10 points in statewide races. Democrats now control the Texas House but Republicans still hold a 19-12 advantage in the Texas Senate, which basically means there will be lots of debate before any compromise. 

Gold has done well in the years following this century’s biggest midterm revolutions – in 2007, 2011, 2019 and after the most recent reversals in the wake of the 2022 (Biden) midterm in the House. 

How much will gold gain next year? The average gold gain after the past two Democratic landslides (2006 and 2018) was +25%. One main reason for gold’s increase in those years was the decline of the dollar, especially when Democrats control the House of Representatives, where all spending bills must originate. In the four historical cases above, the U.S. Dollar Index (DXY) fell by an average of 3.4% in the 12 months after midterm reversals, and the dollar index has already fallen slightly after this week’s election.

Why the 1992 $10 American Gold Eagle is a Solid Buy

My recommended “Coin of the Week” is the low-mintage 1992 $10 American Gold Eagle in superb gem brilliant uncirculated MS69 condition for your portfolio or get some in a special NGC holder for your IRA inclusion.

This coin combines a relatively low-mintage, reasonable price, with room to grow and our great “secret sauce” capitalization component.

The 1992 $10 is an important component of our innovative 20/20 Program, which identifies the coins with the best growth potential. This coin has held its value and even increased this year during gold’s pullback. It has shown excellent performance since we recommended it at the beginning of this decade.

Be sure you don’t miss your opportunity to acquire one of these superb coins by calling our expert account representatives today!

Long-Term Investors in China (and India) Are the Main Engine for Gold’s Growth

China and India are home to about three billion people, roughly 1.5 billion each. That’s 36% of the world’s 8.3 billion people – and nearly all of those Chinese and Indian families are growing their wealth mostly in gold. Demand for gold in India fell slightly during the third quarter but Chinese demand accelerated.

China is the world’s #1 gold producer and #1 gold consumer. In China, investors have little choice but gold – a proven long-term store of real wealth not subject to government paper inflation or the vagaries of the Chinese real estate and stock markets, which have performed dismally over the past decade.

Chinese consumers (as well as their central bank) are purchasing gold at record rates. In 2025, retail investors bought 432 metric tons of gold, a 28% gain from 2024 and about one-third of all global gold bar and coin demand during 2025. In the first eight months of 2026, China’s gold imports topped 1,000 metric tons, worth over $159 billion. Gold has earned this rising level of demand, as gold prices have more than doubled in the past five years while existing home prices in China are down an average 22%. Still, Beijing keeps mandating the building of homes and office buildings well beyond demand for housing.

The Chinese stock market has also been declining and has seen many cases of corrupt insider trading and stock price manipulation lately, with over 20 major executives and investors under investigation this year. So, with two past pillars of wealth building – housing and stocks – failing to deliver, gold gives 1.5 billion Chinese a proven, tangible store of wealth incapable of being overbuilt or manipulated like stocks.

Meanwhile, China’s central bank has bought gold for 23 straight months, mostly by unloading its vast horde of U.S. dollars and other paper currencies. In September, the People’s Bank of China (PBOC) bought 23 metric tons of gold, its biggest monthly purchase in nearly three years. This brings their total estimated gold buying this year (although some of it is unreported), to over 210 metric tons so far in 2026.

Meanwhile, China’s U.S. dollar holdings dropped to an 18-year low in July of this year, and the Chinese realize the dollar will likely fall further after this election, so they will likely continue to sell dollars.

Gold jumped back above $4,000 an ounce and silver hit $52 early Wednesday as the dollar weakened amid the Democratic rout in the U.S. midterm elections. For the first three trading days of November, silver is up from $49.10 to $52.44 (+6.8%) and gold is up from $3,899 to $4,079 (+4.6%). The stock market also responded positively to Tuesday’s election results, with the Dow up 3% and the other major stock indexes up by an average of 1.5% on Wednesday, mostly in reaction to the election results. However, AI and tech stocks were pummeled and on Thursday there was a significant drop in both the Dow and the S&P.