How Does Trump's Victory Affect Gold?

How Does Trump's Victory Affect Gold? 

Gold has been considered a hedge against economic and political instability for a very long time, particularly in an environment when interest rates are seen to be low. The conjecture over the effects that this would have on the economy and markets has reached a fever pitch now that the presidential election in the United States of America in 2024 has finally come to an end and former President Donald Trump is back in power. Gold is often one of the important markets that enjoys a spike in demand whenever there is a change in political leadership at the very top. There has been an almost 35 percent increase in the price of gold this year, and on October 29, it reached a record high of $2,769.25 per ounce in the United States. The win of Donald Trump carries with it some rather out-of-the-ordinary policy perspectives, which may be a factor in the fluctuations in gold prices. A study of the potential effects that his presidency may have on the gold market is presented here. The price of an ounce of spot gold on Wednesday, reaching a final value of $2,659.24 US dollars.

Interest Rates and Federal Reserve Policies

How Trump and the Fed get along may also be important. Trump wants interest rates to stay low because they help the economy grow. The U.S. dollar often falls when interest rates go down, which makes buyers want to buy gold. Because Trump wants low interest rates, having non-yielding investments like gold might become more appealing. 

Economic Policy and Inflation

As investors seek a hedge against the swings in market volatility that occur with a change in leadership in the world's largest economy, the movement of these financial markets has a big effect on the price of gold. This is because investors are looking for a hedge against that volatility. In addition, the trade tariffs would exacerbate inflationary pressures since they will cause an increase in the pricing of items that are imported, according to economists. President Trump's intention to lower taxes and deport illegal immigrants, which would result in a decrease in the supply of low-cost labour, is adding to the pressures that are already present. 

Geopolitical Tensions and Trade Policies

Even though markets are still concerned about geopolitical conflict, gold prices continue to be supported. When Trump was in office before, he was very tough on trade and foreign policy, especially with China. Markets throughout the world are likely to be in a state of chaos if tensions with foreign trade partners continue to escalate.

CONCLUSION

There was still a lot of uncertainty about how Trump's election would affect gold prices, but some of these signs point to gold possibly being one of the winners. One piece of study predicted that by the end of the third quarter of the next year, the price of an ounce of gold will have reached $2,900 in the United States. Given Trump's views on tariffs, government spending, taxes, and interest rates, a Trump victory would expedite that ascent.