Did the mid-term elections affect the price of gold?

In the run-up to and after the announcements of the results of the U.S. mid-term elections the gold price barely moved. On the surface we can therefore conclude that the mid-term U.S. elections did not affect the gold price. But whether the Republicans or the Democrats won is not an issue for the gold market. What is an issue for precious metals is, can the U.S. government govern in the monetary area sufficiently to invigorate the U.S. economy and should they wish to do so, strengthen the U.S. dollar?

We found the result pointed to an emasculation of the government’s power on the monetary front. Far too much of a burden has fallen on the shoulders of the Federal Reserve, an institution with only limited powers to resuscitate the U.S. economy. Government should shoulder that role, supported in this by the Fed. Government does not appear to now have the capacity to resolve the economic problems of the U.S. This tells us that the enormous steps needed to be taken to strengthen the U.S. dollar are not going to be taken, so a fall in the U.S. dollar is widely expected. The difference for the dollar now is that its fall can be precipitous and not simply a repeat of the fall in the last two years. Control over the dollar’s value for the next two years appears to have slipped from the grasp of the U.S. monetary authorities. This is extremely positive for the gold price.