According to analysts at Heraeus, the prospect of a second Trump administration could drive global investors towards gold, while both gold and silver prices stand to benefit from escalating tariffs and trade tensions.
In their latest report on precious metals, Heraeus highlighted that economic policies under a re-elected President Trump might provoke significant market volatility, geopolitical risks, and heightened inflation. With Trump holding a slight edge over Biden in recent polls, uncertainties loom regarding potential trade policies, including broad tariffs on imports and intensified trade disputes with China. Such scenarios historically correlated with increased gold prices, as observed during the 2018-2020 U.S.-China trade war.
The analysts expressed concern that a second Trump term could also threaten the Federal Reserve’s independence, potentially impacting monetary policy decisions. Previous criticisms and proposed changes to Fed leadership could influence market sentiment, driving up demand for gold as a hedge against inflation and currency devaluation.
In the Asian market, Heraeus noted robust gold demand in India, driven by strong imports and resilient jewelry consumption despite global fluctuations. They highlighted India’s significant role as the second-largest consumer market for gold globally, emphasizing steady demand trends despite challenges in other regions.
Turning to silver, Heraeus pointed out expanding demand driven by the U.S. solar manufacturing industry and increasing trade barriers. The analysts noted substantial investments in solar infrastructure and growth in electric vehicle (EV) charging stations, both contributing to heightened silver demand for industrial applications. They anticipate continued bullish sentiment for silver as trade barriers reshape market dynamics.
As of recent trading sessions, gold prices have held steady within a range, while silver has shown incremental gains amidst supportive market conditions.
