Chief Market Analyst Christian Henke, IG
The gold price could continue to shine in the coming year. Support comes primarily from volatility, which often rises sharply in midterm election years. In 2026, the precious yellow metal could once again be a safe haven for investors.
Key points:
- In midterm election years, stocks are not necessarily in demand. Instead, investors look for safe havens. And then gold is recommended as an investment in turbulent times
- Above all, the rising volatility in midterm election years plays into the hands of the precious yellow metal
- Under this condition, the gold price could continue its path in the coming year. The target could be the price range around USD 4,900 per troy ounce
Midterm election years are good years for gold
The midterm elections will take place in the USA next year. And a midterm year represents a good buying opportunity for the gold price. We have therefore taken a closer look at the seasonality chart. In the past fourteen midterm election years (period extends over 35 years), the precious yellow metal was able to increase by an average of 12.83% in over 64% of the cases.
Overall, there are four good periods in a midterm election year in which the gold price can increase. The best period runs from July 4th to September 6th. In the past, the increase was around 7%. In all four periods, the precious metal was able to please investors in more than 71% of the cases.
Seasonality of the gold price in the midterm election years
Source: Saisonax.com
Rising volatility – One man’s joy is another man’s sorrow
The global stock markets could suffer from increasing volatility in the coming year. In contrast, increasing uncertainty is particularly beneficial for the gold price. Many market participants then look for safe havens. And, as is well known, the precious yellow metal is one of them.
As can be seen in the seasonality chart of the VIX (volatility index on the S&P 500), the fluctuation in a midterm election year is extremely high. The VIX tends to increase significantly, especially in this year of the US presidential election cycle. In the past nine midterm years, the Vola has increased by an average of around 20% in 75% of the cases.
Seasonality of the VIX in the midterm election years
Source: Saisonax.com
In the following table, we have looked at the best period for gold in the US presidential election cycle. The highest performance was achieved in the midterm and pre-election years from the perspective of the last fourteen midterm years. The success rate was also the highest.
Performance of the gold price in the US presidential election cycle (14 midterm election years)
Gold – How far can the journey go?
A new all-time high was marked at USD 4,382 per troy ounce at the end of October. Since then, the precious yellow metal has been in a correction. However, this could be over shortly. A symmetrical triangle has formed in the weekly chart, which is one of the continuation formations. If the jump above the upper side of the triangle formation at USD 4,156 succeeds, the breakout would be in the bag. A price target of USD 4,663 can be derived from the height of the symmetrical triangle. If the gold price also leaves the current trading range upwards, it could even go up to USD 4,877. Here, too, the height of the chart formation was used to calculate the price target. Despite the very strong seasonality mentioned at the beginning, it is still recommended to set a stop loss. The lower limit of the sideways phase at USD 3,887 would be suitable for this.
Gold price chart on a weekly basis
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Author: Christian Henke
ig.com/de
