Joe Biden announced Sunday that he is ending his presidential campaign, but he intends to finish the current term. This article may be political in nature, but it will have major ramifications for investors, including gold and silver bugs.

The bullion markets have been relatively quiet in recent months. The frenetic buying which kicked off in the spring of 2020 lasted for nearly 3 years, before metals investors paused for a breather. Premiums have since come way down, and dealer inventories are fully replenished.

Bullion investors in the U.S., who tend to skew conservative or libertarian, may be feeling less anxious in recent months.

Donald Trump has been rising in the polls, while Biden has looked more unelectable.

Pessimism about where the country is headed has been a major driver in the markets for physical gold and silver. For many, Trump seems to represent the "right track." His election in 2016 led to a couple of quiet years, and demand is subdued once again with Trump as the front-runner.

Whomever the Democrats select to replace Biden, the question will be whether they have significantly better prospects to beat Trump in November. If he or she does, expect U.S. investors to buy more gold and silver.

Vice President Kamala Harris looks to be in the pole position, though she was not immediately endorsed by all prominent Democrats. However, the Democratic National Convention won’t begin for nearly a month.

The months just ahead in the bullion markets may look a lot like the past few months, provided Trump can hold onto his current lead in the polls.

The failed assassination attempt may have only strengthened Trump’s odds, and it isn’t clear who Democrats might offer as a solid counter.

It is important to note that this commentary is about the potential demand for physical bullion products in the U.S. and how that impacts premiums – not the direction of paper prices. There often isn’t much of a connection, at least in the short term.

Any sustained surge in demand for metal in the U.S. will likely result in higher bid and ask premiums for coins, rounds, and bars.

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