A commodity expert said that although gold prices have been falling since Donald Trump won the US election, the significant uncertainty surrounding "Trump 2.0" means that gold prices are about to reach new highs.
Senior commodity analyst and founder of CPM Group, Jeffrey Christian, predicts that gold prices will reach a historic high by the end of January next year.
In a recent report to clients, he speculated that gold may remain stable for a few months before rebounding to a cyclical peak before 2026, meaning that in the first year of Trump's presidency, gold will reach multiple historical highs.
Since the election day, the gold price has fallen by about 4%. Christian believes that the decline in gold prices may be due to investors taking profits and cashing out when gold prices hit historical highs at the end of October.
Seeking a safe haven
For the above speculation, Christian explained that a large number of uncertainties surrounding the policy of the president-elect will drive this rebound, which will lead investors to rush to gold, silver, US treasury bond bonds and other defensive assets to seek security.
"There are internal contradictions in what they said (Trump's policy), and it is not clear what can be done. This has brought a series of new uncertainties, which will lead investors to avoid risks. When they are uncertain, when they are worried about the direction of the economy, they will buy dollars, buy US treasury bond bonds, buy gold and silver." He wrote.
Many economists believe that some of Trump's economic policies may have an impact that is contrary to his stated goals.
For example, experts described Trump's plan to impose high tariffs on imported goods as inflation, which Trump refuted. He implemented tariffs during his first term in 2017, but inflation did not increase significantly. However, economists say that his new tariff plan is much more comprehensive, which explains the difference in inflation forecasts before and after.
Christian pointed out that CPM Group insists on its forecast that the US economy may experience a recession in the next 24 months. He added that if Trump's economic policies have a widespread impact, the economic recession may come earlier or more severe.
The statements of President elect Trump and his colleagues are contradictory, "he said." You can look at some of the things they say, such as extreme austerity policies, budget cuts, and government spending cuts, which may accelerate (advance and deepen) the economic recession
However, currently, most economists still believe that as inflation approaches the Federal Reserve's 2% target and economic growth remains stable, the United States will achieve a soft landing. The inflation rate rose by 2.6% in October, in line with economists' expectations. Meanwhile, according to the latest GDP Now data from the Atlanta Federal Reserve Bank, it is expected that the actual GDP in the fourth quarter will reach 2.6%.