Dear Investor,
you may have heard of the election cycle. As happened last year, a US president is elected every four years. The result of these elections impacts markets beyond just Election Day, every four years of the election cycle. Contrary to what many investors think, it is not so much the election outcome that has an impact on prices. Rather, it is which year of the four-year election cycle that we are in that matters to the markets. This is what I want to look at today for three markets: gold, the US dollar and technology stocks.
Gold in Post Election Years
Firstly, let’s look at gold. The chart below shows you the typical development of gold in post-elections years. In a sense, it is a seasonal chart in which only every fourth year is included in the calculation. This chart shows you the average trend of gold in post-election years from 1969 onwards.
Gold, typical course of post-election years only, 1969 to 2024
After a weak start, prices rise until the beginning of August. Source: Seasonax
Gold typically rises in post-election years with strong fluctuations until early June. Seen this way, the way for higher gold prices is now! After this year, there is an overall cyclical sideways movement.
The US dollar in post-election years
Currencies also depend on the election cycle. The next chart shows you the typical development of the US dollar index in post-election years.
USDX, typical course of post-election years only, 1969 to 2024
The dollar has been going sideways for months. Source: Seasonax
You can see that from the beginning of February in post-election years, the dollar index typically runs sideways until early July. From this point of view, no trend is to be expected at present. It would be more of a time for options writing trades.
After that, there will be a downward trend until autumn.
The NASDAQ in post-election years
The third chart in our small group shows the typical course of the Nasdaq in post-election years. Stock prices also depend on the election cycle.
Nasdaq 100, typical course only for post-election years, 1969 to 2024
February and March are problematic. Source: Seasonax
As you can see, the Nasdaq typically falls from the beginning of the second week of February until the beginning of April. After that it typically goes back up. From this perspective, the coming weeks will be critical.
If you want to examine other instruments for their cyclical behaviour, Seasonax’s filter function is right for you. To do this, log in to Seasonax, call up an instrument and then use the filter function on the right above the chart under “More”.
There you can display the average course of the post-election years by selecting the “Post Elections” filter.
One click to the election cycle. Source: Seasonax
You will immediately see the average performance of your instrument in the post-election year.
Extensive filter options
However, the filter function is considerably more extensive. For example, you can also apply other filters such as even/odd years, or select or deselect each year individually.
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Originally Posted February 5, 2025 – Three important markets: How do they fare in post-election years?
Disclosure: Seasonax
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