Election 2024: Do Only Republicans Invest in Gold and Silver?
Tuesday, 10/22/2024 12:00
US bullion coin sales jump under a Democrat President...
IT'S A FACT that demand for gold and silver coins in the USA rises under Democrat Presidents.
That's why many
precious-metals adverts and promotions target conservative messages. Republican voters often seek to protect their wealth and savings against liberal and left-leaning Presidents.
Going into Election 2024 however,
Democratic states now lead gold searches online. This suggests that inflation fears and wider economic worries are crossing party lines.
Bottom line? Different gold products see different investment behaviors responding to US elections and politics.
Read the full report and access BullionVault's interactive data story below.
DO AMERICANS only invest in gold or silver if they vote Republican?
You might think so from the politics of TV and online ads for gold IRA investment accounts. And you'd be right according to data on US gold and silver coin sales.
The United States Mint sells far more new gold and silver Eagle coins when there's a Democrat President. Well over twice as many, in fact, on BullionVault's analysis of monthly figures since 2001. Demand in real value terms was 289% greater than when Republicans held power.
But despite what coin promoters and liberal media think, this seemingly political pattern – also seen in demand for 'retail' bars of gold and silver, but not in vaulted bullion or metal-backed ETF investment trusts – may have other explanations. It might also be changing. Because while right-wing voices warn against Kamala Harris' radical-left tax and spending plans, research by
BullionVault also finds that, ahead of this November's election, more people in Democratic states are searching for gold-related terms on Google than people in Republican strongholds.
Eight of today's top 10 states for 'gold price' searches voted for Biden in 2020. All but one of those – Nevada, now a key battleground – looks set to vote for the Democrats again this November.
Why might the apparently partisan politics of gold and silver demand in the USA be changing?
'Gold Price' Searches State-by-State in 2024 Election
See the full data of US "gold price" search volumes for each state, plus its political leaning, in the interactive table at the bottom of this report. Webmasters: You can embed this chart on your own site here.
As things stand today, demand for gold and silver Eagles from the US Mint has weakened as the Biden Government comes to a close.
Sales of new US precious metals coins have in fact fallen across the past 6 months to the lowest by weight since before Covid pandemic lockdowns began, back in the final year of Republican Donald Trump's 2017-2021 term.
This might suggest Republican voters don't expect or fear Kamala Harris beating the former President this fall, because it contrasts with the clear political pattern of the past 6 presidential terms:
America Buys More Gold and Silver Coins When the President is a Democrat
The split since 2001, under two red and two blue leaders, has been stark. So too is the partisan bias in today's precious-metal marketing and investment news:
- Donald Trump launched a range of gold and silver coins ahead of the 2024 presidential election;
- Fox News anchor Laura Ingraham urges putting gold coins into your IRA account to protect your savings against Kamala Harris becoming President;
- Liberal media meanwhile report US coin dealers targeting "conservative activists" with gold and silver promotions at gun shows.
The apparent politics of US bullion coin demand is an open secret in the precious metals industry.
"There's massive interest in this market that responds to right-wing messages," says one gold and silver coin dealer. And those messages appear to play best under Democrat administrations.
As this chart shows, demand for new US Mint gold and silver coins shows such a strong split along political lines that you might think retail bullion dealers would now be funding a Harris super PAC to win Election 2024.
US Gold and Silver Coin Sales Under Recent Presidents: Bush, Obama, Trump, Biden
During Barack Obama's two terms as Democratic President, data from the US Mint show that sales of newly-minted American gold Eagle and Buffalo coins rose 127% by weight compared to Republican predecessor George W.Bush's eight years in office.
In real terms, those sales leapt 370% by inflation-adjusted value.
Silver saw the same pattern. Sales of new silver Eagles more than doubled by weight during Obama's presidency compared to W.Bush, rising by 152%. In real Dollar terms, demand jumped more than 4 times over, rising by 433%.
But then, after Donald Trump beat Hillary Clinton in November 2016, demand for gold and silver coins sank. Sales of gold Eagles and Buffalos by the US Mint more than halved both by weight and by value. Month-average sales of silver Eagle coins dropped 46% in ounce terms in 2017-2021, and they fell 61% in inflation-adjusted dollars.
Coin demand has since rebounded under Democrat Joe Biden, with monthly silver sales averaging a rise of 20% by weight and 42% by value. Gold coin sales are up 110% in ounces and 158% in real terms.
This political split doesn't only impact new gold and silver coins. Across all 'retail' bullion products – adding small bars of gold and silver, and calculating the total net of investor selling – data from the mining industry's World Gold Council and the Washington-base Silver Institute says that US demand almost halved by weight during Trump's first term compared to the prior four years under Obama.
But since Biden replaced Trump? Retail US silver investment demand leapt 113% and it trebled for gold.
Coin and Small-Bar Demand Tracks the Political Cycle, Not Vaulted Gold or ETFs
Again, this apparently political pattern – shown on data gathered and produced by specialist consultants Metals Focus – only shows in US demand for bullion in the form of coins and small bars. It doesn't show in US investment demand for securely vaulted wholesale bullion, and it's completely reversed for gold-backed ETF trusts.
BullionVault for instance now cares for $5 billion of gold, silver, platinum and palladium owned by more than 100,000 users worldwide. All of that
fully allocated precious metal is securely custodied and insured in each client's choice of 5 international locations, led by Zurich, Switzerland. And American residents choosing to use this simple, low-cost service have spent 5% less on gold in real terms during Democrat presidencies than they have under Republicans.
Starker still is the contrast between US demand for retail gold products and exchange-traded trust funds backed by gold. Because net inflows into gold ETFs have run opposite to demand for coins and small bars under Republican versus Democratic Presidents.
Gold ETFs listed in New York, led by the giant GLD product, have grown far less during the Democrats' recent time in the White House than under Republican Presidents.
Indeed, US
gold ETFs have shrunk across the past three Democrat administrations combined, needing 38 fewer tonnes of bullion on average to back the number of shares in issue across Obama's two terms and Biden's term since January 2021.
In contrast, Republican W.Bush's second term and Trump's term from 2017-2021 saw US-listed gold ETFs expand by 787 tonnes on average.
Gold-Backed ETFs Show the Opposite Pattern to Coins and Small Bars
This pattern in bullion-backed exchange-traded funds runs counter to US bullion coin and small-bar demand. Instead, flows into US-listed gold ETFs map the direction of gold prices much more closely.
Adjusted by inflation to 2024 values, the price of gold has averaged a 4-year gain of 67% during the past two Republican administrations, but it rose only 19% on average under Obama and Biden.
ETF investors, in other words, have tended to buy gold when it's rising, but they held off or even sold when prices flattened or fell. Whereas US citizens buying retail bullion coins or small bars grew their demand during the weaker gold price action seen under Democratic administrations, and they eased back during the stronger bull markets under Republican leaders.
Might this relative discount in precious metals explain the divide in demand better than politics? After all, new coin sales have fallen this year as silver jumps and
gold prices set record after record in Joe Biden's final months as Democrat President. And known as 'Dollar-cost averaging', the strategy of growing your gold or silver holdings when prices are lower would be smart.
But retail gold bullion products come at retail prices. So choosing to buy coins or small bars raises your cost of investing – and it therefore dents your gains when prices rise and you choose to sell – compared to
trading securely vaulted wholesale bullion or using similarly low-cost ETF products. That contradicts the possibility that heavier US coin buying under Democratic Presidents is actually driven by cost-conscious, price-sensitive investors.
What's more, the idea that gold and silver might underperform during a Democrat term of office doesn't feature in any US retail bullion promotions today. So what messages might US voters choosing to invest in gold or silver be responding to instead?
Here's How the Case for Investing in Gold and Silver Looks Split by Politics
First, there's the economy. It was the No.1 concern for US voters going into Election 2024 according to a Gallup survey.
But while 2-in-3 Republican and Republican-leaning adults said that the economy was "extremely important" to how they would vote, barely half as many Democrats and Democratic-leaning independents said the same.
Red and blue voters also split over how they feel the economy is performing. This is led by worries over inflation according to an opinion poll by Bankrate. Because while 56% of Republicans named the rising cost of living as their top economic concern, only 28% of Democrats said the same.
Inflation is, of course, one of those key messages targeted by US gold and silver coin promoters. So perhaps it's no wonder that retail bullion sales rise under Democratic Presidents. Because inflation really has been worse when the White House turns blue.
US Economy: Annual data
| Inflation | Real GDP growth | Jobless rate (change) | Real wage growth | Consumer sentiment (change) | |
|---|---|---|---|---|---|
| W.Bush I | 2.4% | 2.4% | 0.4% | 0.2% | -0.3% |
| W.Bush II | 2.5% | 1.3% | 0.5% | 0.2% | -11.3% |
| Obama I | 2.3% | 1.5% | 0.2% | -0.5% | 5.0% |
| Obama II | 1.2% | 2.5% | -0.8% | 1.2% | 7.7% |
| Trump | 1.9% | 1.9% | 0.5% | 1.9% | -4.8% |
| Biden | 5.2% | 3.2% | -0.7% | -0.6% | -4.7% |
| REP | 2.3% | 1.9% | 0.5% | 0.8% | -5.5% |
| DEM | 2.9% | 2.4% | -0.5% | 0.0% | 2.7% |
This table of BullionVault analysis uses data from the St.Louis Fed. It shows how annual inflation since 2001 has on average been higher by over half-a-percentage point under Democratic Presidents than under Republicans.
Indeed, analysis for the
Washington Post says that the cost of living on the official CPI index rose by less under Donald Trump than under any President since Lyndon Johnson in the mid-1960s. Under Biden, in contrast, inflation was worse than during any modern President besides fellow Democrat Jimmy Carter. And back then, in the late 1970s, gold and silver prices vaulted 8-fold and 11-fold respectively to hit what were then all-time highs for US citizens.
Democrat inflation so far this century has also hurt real wage growth, because incomes were dead-flat across Obama and Biden's time in the White House. Whereas under W.Bush and Trump, American workers on average enjoyed an annual raise of 0.8% in real terms.
Yet despite higher inflation under the Dems, the US economy has on average performed better in real terms when the White House is blue. The unemployment rate has fallen, and consumer sentiment – just like GDP growth – has been stronger according to BullionVault's analysis of the Michigan Fed's widely-respected survey.
What drove Democrat growth and inflation? Was it big Democrat tax hikes and budget deficit spending?
US Federal Government: Annual changes in real terms
| Tax take | Total debt | Owed to foreign investors & governments | Defense spending | Debt-interest costs | |
|---|---|---|---|---|---|
| W.Bush I | 3.5% | 3.1% | 8.6% | 3.0% | 1.2% |
| W.Bush II | -3.5% | 4.1% | 8.0% | 3.4% | -1.8% |
| Obama I | 2.3% | 2.7% | 4.7% | -2.0% | -0.5% |
| Obama II | 0.0% | 1.7% | -1.4% | -0.5% | 1.1% |
| Trump | 2.4% | 5.2% | 1.5% | 1.4% | -3.6% |
| Biden | -3.6% | 1.6% | 1.8% | 1.7% | 8.4% |
| REP | 0.8% | 4.1% | 6.0% | 2.6% | -1.4% |
| DEM | -0.4% | 2.0% | 1.7% | -0.3% | 3.0% |
Contrary to how most people might feel today, the federal government's total tax take has in fact fallen in real terms under Democrat Presidents so far in the 21st Century.
Growth in America's national debt was also lower than it was under Republican administrations. Most dramatically, and again using data from the St.Louis Fed, the amount of money Washington owes to foreign investors and governments grew more slowly in real terms, too.
Part of this is because the two Democrat Presidents since 2001 both cut real-terms spending on defense. More worrying for anyone hoping (or fearing) that Harris win will in November, the Democrats have repeatedly presided over a surge in the cost of servicing the USA's outstanding debt.
The real cost of interest payments on bonds and T-bills jumped on average by 3 percentage points per year under Obama and Biden. That's money they couldn't spend on education, health, defense, welfare or other entitlement programs.
'Be Worried and Buy Gold If Harris Wins' Say Republican Campaigners
"No matter what the economy or the government policies are, gold and silver are assets that have stood the test of time," says Trump supporter and right-wing social media 'agitator' Laura Loomer, promoting a gold IRA provider to her 1.3 million followers on X.com.
Whereas "Being at the whim of the stock market or the Biden Administration doesn't make me feel safe or secure."
"I'd be very concerned if Harris is elected," agrees hedge-fund billionaire and Trump-campaign fundraiser John Paulson, warning against "the tax plans and other economic plans that she's articulated" – in particular, the threat of taxing the wealthiest investors by 25% on their unrealized capital gains.
"It would cause mass selling of almost everything," says Paulson: "Stocks, bonds, housing, art. That would result in a crash in the markets and an immediate recession." So he will sell stocks and switch into "cash and gold" instead if Kamala Harris beats Trump this November and starts to implement radical left economic policies in 2025.
But is gold or silver bullion always a good investment when Democrats replace Republicans in the White House? Not on the evidence so far this century.
US Investment Assets: Real annual change
| Bank savings | Stocks (incl.dividends) | Housing (no rent or costs) | Gold | Silver | |
|---|---|---|---|---|---|
| W.Bush I | -0.4% | -2.8% | 5.8% | 9.7% | 7.9% |
| W.Bush II | 1.3% | -7.5% | -1.4% | 16.0% | 9.5% |
| Obama I | -2.1% | 12.0% | -5.2% | 14.9% | 26.2% |
| Obama II | -1.0% | 13.0% | 5.0% | -9.9% | -15.2% |
| Trump | -0.6% | 13.8% | 4.6% | 11.2% | 10.9% |
| Biden | -2.3% | 7.4% | 3.2% | 0.9% | -2.1% |
| REP | 0.1% | 1.2% | 3.0% | 12.3% | 9.4% |
| DEM | -1.8% | 10.8% | 1.0% | 2.0% | 3.0% |
BullionVault's third and final table might surprise you. Because this analysis, built using data from the St.Louis Fed, S&P, Zillow and the LBMA, confound the idea that the stock market has done best when there was a Republican President, or that gold and silver have soared when there's a Democrat in the White House.
Instead – and measuring investment returns after accounting for inflation – gold and silver typically did much better when the GOP ran the Oval Office, whereas stocks performed best when the Dems were in charge.
Cash in the bank meanwhile lost purchasing power during 5 of the past 6 presidential terms, falling most badly under Democratic administrations. Residential real estate prices were more mixed, but here again, the average performance of this core household asset has been stronger overall in real terms during GOP presidencies.
So Should You Sell Gold and Buy Stocks If Harris Beats Trump?
None of the analysis offered here can predict the US 2024 Election result, much less how the economy, government or investment assets will perform afterwards. Far from it.
Many other factors impact the financial markets besides politics, ranging from Federal Reserve interest rates to the state of the global economy and geopolitical tensions more broadly. And while gold's gains have, historically, been lower under the Dems than the Republicans since 2001, the precious metal jumped to hit record-high prices under both Obama and Biden. This fall's run of fresh all-time highs also marks the best year-to-date gains for gold since 1986, rising more than 28% so far as
fears grow over America's government deficits and debt continuing to surge whoever wins the White House for 2025.
Bottom line? Investing based solely on which political party wins power might not be the best strategy for protecting and growing your wealth. Whoever wins Election 2024, financial volatility and geopolitical tensions look sure to continue if not worsen. That might explain why people living in Democrat-voting states are now researching gold-related terms on Google more than in Republican strongholds.
Might Gold and Silver Protect You Against Harris Winning the White House?
This trend in gold-related search behavior is shown in our interactive map of the USA at the top of this report, and in the data table below. It also echoes a change in another area seen to "symbolize the culture war between Democrats and Republicans," as French newspaper
Le Monde puts it: Gun sales.
Like gold and silver coins, demand for firearms in the US also has tended to rise when there's a Democrat in the White House rather than a Republican. Data from the FBI analyzed by BullionVault show that, since the year 2000, background checks for firearms permits have on average been 37% higher under a Democrat president. Background checks have also been 5% higher than the overall average during presidential election years, regardless of the result.
Here again however, Democrat voters are increasingly behaving more like people in Republican areas. Asking whether people own or live in a household where someone owns a gun of any kind, the latest NBC News-
Wall Street Journal poll found that 41% of registered Democrat voters said 'yes' in late 2023, leaping from 33% five years before. Among Republican voters, the percentage edged up to 66% from 64%.
Wanting to protect yourself is, in short, becoming a bipartisan issue in America as this election draws near, and with good reason. To buy and own fully allocated and insured physical bullion, safely custodied in your choice of 5 global locations including Singapore and Zurich, Switzerland, take a look at the simple, low-cost service provided by
BullionVault.
"Gold Price" Searches by State
Ready to buy gold or silver today? Whatever your political fears and hopes, you'll find the safest, simplest and most cost-effective way is to use BullionVault, now caring for more than $5 billion in physical precious metals for over 100,000 private investors worldwide.
