Yesterday, Donald Trump became America’s 45th president. Although that means very different things to many people, investing in gold with Donald Trump president, is going to be very interesting.
Where can gold go after Donald Trump’s inauguration? The weather in DC. today isn’t at its best, there are reasons to be more optimistic about the price of gold.
Gold briefly dropped under $1200 during this week but surged back above the psychological barrier, of $1200, at the end of the week currently showing at $1213.
That shows a gold rebound in the hours leading to and after the inauguration of Donald Trump. This can actually be an indication of how the investors are feeling about the prospects of gold during the Trump years.
Will Interest Rates Be Higher In The Era Of Trump?
During the Obama administration, there was a complete lack of interest rates as determined by the Federal Reserve. Only recently we can actually see a slight move upwards. The potential for interest rates during the Trump administration is to be higher, and at the same time on the other side of the Atlantic, there are calls for higher interest rates in the European Union. That shows a lack of confidence in the stock market as a whole.
The US Dollar
The US dollar will definitely be the most important factor determining the price of gold in the years to come. The Federal Reserve chairperson Janet Yellen painted a picture with higher interest rates ahead. Higher interest rates make the dollar more valuable. The stronger the dollar is the more gold it can buy and that means less optimism for gold. At the same time, the Trump administration could bring excitement to the markets even though a market correction looms on many investors’ minds too.
Is There Going To Be A Trade War Between The US China And Europe?
We all know Trump’s policies include a closed economy, and we all now know, the Transatlantic Trade and Investment Partnership (the deal between the US and EU) is now dead, as the new President of the US announced. It looks like the economic ties between the US and Europe will weaken and the same will happen with the ties between the US and China. This could trigger a trade war, which could be good news for gold.
A serious investor will need to keep a close eye on the dollar index and comments and actions by the Federal Reserve, as there will be reactions to the new administration’s policies.
I will keep you informed on all the latest developments regarding gold, precious metals, the markets, the dollar, and the economy.