Explainer – Why gold prices increase after elections, will it be a record this time too?

If any asset is considered the safest in the world, it is gold. Gold has never disappointed investors. Gold becomes more important if we talk about the election season. Especially when people in more than 50 countries of the world will be voting to choose their leaders. India has seen an increase in gold prices after all the Lok Sabha elections from 2009 to 2019.

Yes, call it a coincidence or something. The kind of momentum seen in gold during the 2024 elections was not seen in the 2009 and subsequent Lok Sabha elections. Now the big question is whether gold prices will increase after election results in 2024 like in 2009, 2014 and 2019 or not? Let's try to understand from the figures…

What was the state of gold in 2009?

After the 2009 Lok Sabha elections, gold prices saw an increase. While in one month of the beginning of the election i.e. in March, the price of gold decreased by 2.37 percent. Elections started in April and gold fell by 4.16 percent. After the arrival of May, gold prices saw an improvement and in June gold prices rose 2.90 percent and investors lost more than 3 percent.

Gold prices started to rise from July and saw an increase of 2.43 percent. This increase was seen continuously till the month of November. Gold returned 10.37 percent to investors in November 2019. Since June, the price of gold has seen an increase of 3200 rupees. If we talk about the whole year, gold has returned 22.42 percent to the investors.

After the 2014 election, it was amazing

The year 2014 was nothing special for gold investors. Investors lost around 18 percent from gold in the entire year. But after the election, Sona left no stone unturned to spoil the investors. Gold returned 8 percent to investors in June after the election results in May.

While this return in the month of July was very insignificant. These two-month returns were also significant because after that, gold prices continued to decline until November. From July to November, the price of gold decreased by about 10 thousand rupees. Meanwhile, gold prices saw a decline before June, i.e. during and before the elections.

After the 2019 elections, there was a jump in gold prices

After the 2019 elections, gold returned better than 2014. What is special is that gold has returned more than 20 percent to investors throughout the year. Let's try to understand from these figures. Before the elections, gold had seen a decline in the months of February and March. A decrease of 1.68 percent and 5 percent was recorded during the election period i.e. in April and May respectively. Gold declined by 0.12 percent and 3.35 percent.

It means that in these four months the price of gold decreased by about 4 thousand rupees. After the election results, there was a boom for three consecutive months. Gold prices rose by 2.75 percent in June. Gold prices rose by 10.08 percent in July and 13.46 percent in August. In these three months, the price of gold has increased by more than 10 thousand rupees.

Will there be a boom even after the 2024 elections?

In the last 5 months in the year 2024, an increase of 17.78 percent is being seen in gold investors. Excluding the months of January and February, the price of gold has seen a tremendous increase. Gold has returned 8.17 percent to investors in the month of March. An increase of 4.05 percent has been seen in April. So far in May, gold has returned 5.72 percent to investors. Now all eyes are on whether the price of gold will increase after the elections? According to experts, the price of gold may continue to rise.

Increase in gold prices

A boom is being seen in the multi commodity exchange on Monday. According to the information, the price of gold is increasing by Rs 363 per ten grams at 12:45 pm. While its price has reached 71,619 rupees per ten grams. While the price of gold reached a high of Rs 71,697 during the trading session. In May, the price of gold has seen an increase of Rs 1,282 per ten grams.