Trump’s Victory Leads to Gold Price Boom

As Trump’s tariff gambit reshapes the economic landscape, gold has emerged as an unexpected winner.

Trump’s plans for tariffs are having a pertinent impact on the gold market. These potentially inflationary policies have led to a boom in gold prices as investors seek a more stable investment than the dollar. The potential implementation of these tariffs has created a ripple effect across various sectors of the economy, with the precious metals market experiencing significant volatility.

On the campaign trail, President Trump made many promises about his future economic policies. One of these policies was an extremely strict set of tariffs on China, which could reach up to a 60% tariff on imported goods.

The result of this action is evident, the prices of these imported goods are going to increase substantially, contributing to America’s already burdensome inflation. While the dollar is steadily losing its value now, this measure will almost certainly accelerate its decline.

Because of the dollar’s unsightly future, many investors are turning to gold as a potential safe haven from the upcoming inflation. Unlike the dollar, the value of gold is not heavily dependent on the FED’s monetary policies or the whims of a politician. Instead, its price is anchored by its concrete, real-world applications. As one of the heads of Saxon Bank, Ole Hansen put it, the resiliency of metals prices demonstrate that they are “driven by other factors including trade wars, inflation worries, and fiscal debt worries.”

This outlook has led to a mass purchasing of gold, leading to one of the largest gold value rises since 2010. The price of gold rose 26% in 2024, up to $2,650 per ounce. Silver also experienced its best annum since 2020, nearing $29 per ounce by the end of the year.

This is not a one-off phenomenon. The significant inflation-induced dollar instability over the past couple decades has resulted in significant gold price increases. From just December 2000 to the present day, the value of gold has increased by over 500%.

Trump’s election does not bode poorly for every area of the economy. One of the natural impacts of such heavy tariffs is an increase in domestic production of goods. As such, unemployment has substantially decreased in recent months. This is consistent with the typical economic view that inflation and unemployment are inversely correlated metrics.

The impact of Trump’s proposed tariffs on the gold market is significant. As the dollar faces potential devaluation due to inflationary pressures, gold has emerged as a beacon of stability for investors. The surge in gold prices reflects not only economic uncertainties but also a shift in investor sentiment towards safer assets. However, it’s crucial to note that while the precious metals market may benefit, the broader economic implications of such aggressive tariff policies remain a subject of debate among economists and policymakers. As we move forward, it will be essential to monitor how these policies unfold and their long-term effects on both the U.S. economy and global trade relations.