Kitco News-Gold Could Break $2,800 if Trump Implements Proposed Policies Post-Inauguration

As Donald Trump prepares to be inaugurated for his second term as President of the United States, market analysts are predicting a significant surge in gold prices, potentially breaking the $2,800 per ounce mark if his proposed policies are put into action.

Gold has already seen a strong performance in recent years, driven by geopolitical tensions, economic uncertainties, and central bank demand. In 2024, gold prices surged by 27% to reach record highs of nearly $2,800 per ounce following Trump's election victory. This rally was supported by large-scale central bank purchases, Federal Reserve monetary easing, and gold's status as a safe-haven asset amid global conflicts.

China, in particular, has been increasing its gold reserves ahead of Trump's inauguration. In December, China's central bank added 330,000 troy ounces of gold to its reserves, bringing its total holdings to 73.29 million ounces. This move is seen as a strategic diversification away from the US dollar and a hedge against potential economic challenges.

Analysts believe that Trump's policies, including potential tariffs on Chinese goods and other trade restrictions, could drive up inflation and increase market volatility, further boosting gold's appeal as a safe-haven asset. Marcus Garvey, the head of commodities strategy at Macquarie Group, noted that if Chinese investor buying returns or markets fear that President Trump's policy proposals could deliver a material deterioration in the US fiscal outlook, the price of gold could quickly challenge $3,000 per ounce.

Goldman Sachs has also projected that gold could reach $3,000 per ounce by the second quarter of 2026, driven by central bank demand and geopolitical uncertainties. Morgan Stanley has similarly raised its forecast for gold prices, predicting that they could break through the $3,000 mark in 2025.

As the world braces for potential economic shifts under Trump's second term, investors are increasingly turning to gold to safeguard their wealth and hedge against possible economic downfalls. The precious metal's performance in the coming months will be closely watched as Trump's policies begin to take shape.

References:

1.       Business Insider: China Is Back to Hoarding Gold Ahead of Trump's Inauguration - Business Insider

2.      MiTrade: Gold investors stay bullish for 2025 on Trump and volatility fears, abandoning Bitcoin

3.      MarketPulse: Markets Weekly Outlook - Trump 2.0 Takes Flight as BoJ Decision Looms

4.     Action Forex: Markets Weekly Outlook - Trump 2.0 Takes Flight as BoJ Decision Looms

5.     Live Mint: Gold hits 1-week high as safe-haven demand returns, but still down 4.4% in November. Should you invest now?

6.     U.S. Money Reserve: How the Price of Gold Changed After Each Presidential Election Since 1980

7.      Forbes: Shock Trump Leak Sparks Huge Crypto Price Rally-Boosting Bitcoin, XRP And Solana

8.     Monetary Metals: How does gold perform during presidential elections?

9.     Moomoo: Morgan Stanley predicts that the price of gold will rise in 2025 and is expected to break through the $3,000 mark.

10.    FX Empire: Gold Forecast for 2025: Target Exceeds $3000 Amid Trump, Inflation, and Geopolitical Shifts.