Donald Trump’s ascension to the White House has stirred mixed reactions in the global markets. While some fear trade wars intensifying, others believe his policies could make the US economy boom. Gold investors, who previously remained cautious as the stock market surged, now turned bullish as he retakes the White House in 2025.
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Why Are Gold Investors Bullish in 2025 Under Trump?
So why are gold investors hopeful that Trump’s presidency could push the glittery metal prices up? Money managers are seeing plenty of reasons why the precious metal could rally in 2025. The drivers include Trump’s tariff threats that could pull institutional investors into gold for safety. Tariffs could go both ways and interfere with the smooth flow of goods and cargo interrupting global trade.
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If trade gets interrupted, chances are that firms that use the goods will shell extra money on procurement. This will reflect on the overall prices making the end-user pay more to consume the commodity. The development could reflect badly on the consumer market, which in turn will spill into the stock market.
When the development plays out, gold will be the best asset to park for safety and act as a hedge. “Should trade relations deteriorate with the new Trump policy, we may see the equity market react negatively,” said Darwei Kung, Head of Commodities at DWS Group. He predicted that gold prices could rise to $2,800 by year-end of 2025.
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“Gold would be a good asset to hold to hedge against such risk,” he said. The XAU/USD index surged 27% in 2024, which is a record-high since 2010. The momentum could well play into this year and defy the odds, according to the commodity analyst.
“We would expect that central banks and high net-worth families will continue to find gold attractive,” said Greg Sharenow, a portfolio manager at Pacific Investment Management. He added that the bullish sentiments will be “a trend that will persist,” in 2025.
