Democrats took the House and Senate. Starting January: a Democratic Congress facing a Republican president.
The popular take is gridlock = bullish $GLD. We backtested it on monthly gold since 1971.
Democratic Congress + Republican president happened three times:
• 1971–76: +228.7%
• 1987–92: −16.1%
• 2007–08: +38.5%
Since 1981, gold averaged +0.26%/month in this setup vs +0.50% in all other months. Never statistically significant (p = 0.66).
Congress isn't the variable. The Fed is.
Since 1981, gold by Fed regime:
Hiking: −0.4% a year
Holding: +5.5%
Cutting: +7.1%
Not statistically significant (p = 0.16), but it held across every definition we tested.
The Fed hiked in September for the first time this cycle. One more hike and gold enters its weakest regime since Volcker.
Gold is −6.0% YTD going in.
The popular take is gridlock = bullish $GLD. We backtested it on monthly gold since 1971.
Democratic Congress + Republican president happened three times:
• 1971–76: +228.7%
• 1987–92: −16.1%
• 2007–08: +38.5%
Since 1981, gold averaged +0.26%/month in this setup vs +0.50% in all other months. Never statistically significant (p = 0.66).
Congress isn't the variable. The Fed is.
Since 1981, gold by Fed regime:
Hiking: −0.4% a year
Holding: +5.5%
Cutting: +7.1%
Not statistically significant (p = 0.16), but it held across every definition we tested.
The Fed hiked in September for the first time this cycle. One more hike and gold enters its weakest regime since Volcker.
Gold is −6.0% YTD going in.