Prime Minister Rishi Sunak has confirmed that the next UK general election will take place on Thursday July 4th, 2024. Things have changed immeasurably since Britain last took to the polls in December 2019, with the world facing Covid-19, the war in Ukraine and Gaza, soaring inflation, and a cost-of-living crisis.

Since Boris Johnson delivered a huge majority in 2019 the Conservative party has struggled with scandals and infighting, leading to three Prime Ministers in less than five years. Polls suggest a historic swing back to the Labour party who are consistently polling above 40%, with the Conservative party just above 20%.

240524 Poll

The latest polling data from the BBC suggests a win for Labour is on the cards. Source: BBC.

With less than six weeks to go until election day, customers have been asking us ‘how will the general election affect the gold and silver price?’ Below we look at some of the key things to consider surrounding the general election and what impact they could have on gold and silver.

The Pound

The biggest impact a general election would typically have on gold and silver prices would relate to the strength of the pound. As gold and silver are priced primarily in US dollars, the pound’s strength relative to the dollar can have a profound impact on the price of gold and silver in the UK. If the pound strengthens, gold and silver would drop in price, while a weaker pound would see gold and silver prices rise.

Since announcing the election date, the pound has risen against the dollar. Although the timing of the election has been something of a surprise, markets knew it would happen in the next few months, and while polls can be wrong, the consensus is that the Labour party will win with a large majority. As such, markets will have currently priced-in a Labour victory.

If polls narrow as election day approaches, and uncertainty over the winner increases, then this could bring some volatility to the pound. A surprise hung parliament would likely result in the pound weakening and the UK gold price increasing.


Other factors impacting the pound will be the policies brought in by the new government. As seen following the Brexit referendum in 2016 or the infamous Truss-Kwarteng ‘mini budget’ of 2022, the policies governments enact can have a profound impact on the pound. If Labour wins, the more centre-left pro-business approach of Kier Starmer could help to assuage market concerns and stop the pound from falling. The prospect of Kier Starmer with Rachel Reeves as chancellor are much more welcome to financial markets than 2019s Jeremy Corbyn and John McDonnell partnership.

Any big policy announcements from parties during the campaign period could have an impact on the pound as we near the July 4th election. Any manifesto tax cuts perceived as unfunded or mentions of the post-Brexit trade relationship with the EU, could easily see the pound rise or fall based on the market’s perception of the policy. Geopolitical concerns have become key since the last general election and each party’s stance on Russia, Israel, China, North Korea and other issues could have implications for the pound.

The SNP and Scottish Independence

Scottish Independence is another issue that could impact the pound. The dominance of the SNP in recent elections has taken away key seats from both Labour and the Conservatives, and focused calls for Scottish independence, resulting in the 2014 referendum on the issue. The last year however has seen the SNP’s fortunes turn, with the resignation of Nicola Sturgeon, financial scandals, and the recent resignation of Humza Yousaf.

Scottish polls suggest Labour could regain up to 30 seats, not only helping their expected overall national majority, but also putting independence talks firmly on the back burner given both the Conservatives and Labour refuse to hold a second referendum on the issue of independence. If the SNP were to surprise however and hold onto their overwhelming majority, their ongoing push for Scottish independence (and another referendum in particular) would weaken the pound, sending gold and silver higher in the UK.

If the polls prove correct and Labour win with a large majority, then we are not expecting any significant movement in the pound initially. As the past five years of British politics has shown however, there is plenty of potential for shocks and volatility, and even the next five weeks could have surprises in store to affect the pound. With the wider world also seeing historic levels of uncertainty, the next Prime Minister will face choices no less challenging than those of the last five years, and gold and silver could be far higher in price by the time the next general election rolls round regardless of who wins on July 4th.