Democrats take control of the Congress and move Trump out of the White House. Sounds unbelievable? So what is probable and what is not? We invite you to read our today’s article about the upcoming US Mid-Term Elections and find out what are the likely consequences for the gold market.
Elections are approaching the US again. Two years after Donald Trump was elected as POTUS, American voters go to the polls again on November 6th for the mid-term elections. They will elect all 435 members of the House of Representatives and 35 of 100 Senators (as well as 36 state governors and many other local officers).
Who is likely to win and how will it affect the gold market? Well, the expectations are that the Republicans keep the Senate but lose control of the House of Representatives. Indeed, Democrats are ahead in generic congressional polls, which indicate overall sentiment towards the parties across the country. According to the RealClear Politics, 49.4 percent of voters are in favor of them, while only 42.1 percent of them support Republicans.
But what about the seats? The FiveThirtyEight estimates the probability that Democrats win control of the lower house at 83.8 percent, but only at 17.4 percent to win the upper house (wait, why is that: don’t Republicans control the Senate by just a single vote? It’s true, but the majority of seats up for election this year are held by Democrats currently, so there are a lot more opportunities for them to lose than to win seats).
Should we trust these polls? Well, the presidential election (not to mention Brexit referendum) showed that skepticism is recommended. The US economy is doing well, so the support for Republicans may hold up. On the other hand, uniquely many of Republican representatives are retiring – and it is harder to defend open seats.
Historically, the party of incumbent president usually lose ground during mid-term elections. Indeed, there are few patterns in American politics as regular as the loss of House seats by the President’s party in midterm elections. In the last two centuries, there were only three exceptions: 1934 (during Roosevelt’s presidency), 1998 (during Clinton’s presidency) and 2002 (during George W. Bush’s presidency). And the losses are often dramatic: for example, in 2010, Obama lost 63 seats in House.
