Former President Donald Trump has been officially named the Republican Party’s candidate for the upcoming November elections. With the election less than four months away, experts anticipate increasing geopolitical uncertainty as political dynamics evolve.
The weekend assassination attempt on Trump has surprisingly bolstered his chances of reclaiming the presidency. Though much can change in the next few months, analysts are beginning to predict the global economic landscape under a potential second Trump term.
A growing number of commodity experts suggest that gold could perform well in the coming years. Trump’s economic strategy includes significant tax cuts and a willingness to use tariffs to influence global trade. Additionally, he is expected to pressure the Federal Reserve to maintain low interest rates to stimulate the economy.
These policies—lower interest rates, tax cuts, and increased tariffs—are seen as major factors that could influence gold prices. Lower interest rates typically weaken the U.S. dollar, tax cuts could widen the deficit, and higher tariffs could escalate geopolitical tensions, all of which are favorable conditions for gold.
Thorsten Polleit, an Honorary Professor of Economics at the University of Bayreuth and publisher of the BOOM & BUST Report, predicts a 10% to 15% increase in gold prices by next year, contingent on a Trump victory in November.
Polleit’s perspective is echoed by Arslan Ali, a currency and commodity analyst at FX Empire, who notes that Trump’s policies could be inflationary and weaken the dollar, enhancing gold’s appeal as a safe-haven asset.
Despite the renewed focus on Trump, President Joe Biden’s policies also favor gold. Biden’s plan to raise taxes and boost spending will likely continue to increase the deficit, thereby supporting gold prices in the long term.
Some analysts argue that gold’s rally does not depend solely on presidential policies. Investors are already expecting the Federal Reserve to cut interest rates in September, with markets assigning over a 90% probability to this outcome.
Chris Weston, Head of Research at Pepperstone, forecasts gold prices could reach $2,600 an ounce. He points out that gold has historically surged in the six months following Federal Reserve rate cuts in three of the last four easing cycles, providing a pattern that traders might follow.
Despite the optimism, analysts caution about potential volatility. Gold has recently dropped from its all-time high of $2,480 an ounce, a decline seen as a correction after significant gains. This environment of fluctuating support and resistance levels could lead to instability, requiring investors to exercise patience and strategic foresight.
As the week ends, the outlook for gold appears promising yet unpredictable, with market participants advised to stay vigilant in these turbulent times.
