Gold price and the 2000 election: Redux in 2016?

The question has been raised: What might the price of gold do if the 2016 US presidential election is too close to call, results are disputed, recounts happen and a clear winner is not immediately determined?

Generally, the more politically uncertain the climate, the more of a safe-haven asset gold becomes and gold prices tend to rise. But how much, and for how long?

To answer, here’s a look at the timeline, post-2000 presidential election (Gore vs. Bush), which took nearly 40 days to settle. Few post-election periods had more uncertainty than the 2000 election. Perhaps surprisingly, while gold moved higher, it wasn’t by much — around 4%.

Some key dates/times

November 7, 2000: Gold price settles at $264.30/troy oz. By 8 p.m., the major television networks call Florida for Gore, only to retract their projections by 10 p.m..

November 8: With the national result hanging in the balance, in the wee hours of the morning, Bush seems to take a sure lead in Florida. At 2:30 a.m., Gore even calls Bush to concede, but retracts his concession when it appears the Bush lead in Florida narrows substantially. The margin is reported to be just 1,784 votes; Bush leads Gore 2,909,135 (48.8%) to 2,907,351 (48.8%). A full machine recount gets underway in the morning. Gold price settles at $265/tr oz.

November 13: Gold dips back down to $264.30/tr oz, after Florida's Secretary of State, Katherine Harris, announces she will not extend the 5 p.m. EST November 14 deadline for certifying election results.

November 14-December 6: Gold gains 3.5% to $274.30/tr oz on December 6 from $264.90 on November 14 as the legal wrangling and recounting continues.

December 13: Gold has dropped back down to $268.60/tr oz. Gore announces in a nationally televised speech that he accepts Bush as the 43rd president. Bush promises to work toward reconciliation and unity in his acceptance speech.

December 14-27: Gold then moves steadily but modestly higher, reaching a peak of $275.20/tr oz on December 27 from $269/tr oz after Bush’s acceptance speech (December 13) — a gain of 2.3%. Now that the election is settled and a Republican president will follow eight years with a Democrat in the White House, the upward move could be attributable — in part — to the uncertainty of the new administration.

January 17, 2001: Gold hits its lowest mark of $263.20/tr oz since Election Day.

January 20, 2001: George W. Bush is sworn in as 43^rd President of the United States.

Throughout the timeframe, the change from November 7 to the peak of ($275.20/tr oz) on December 27 is just 4.1%, and then the decline from peak to trough ($263.20/tr oz) on January 17 is just 4.4%.

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