As Donald Trump prepares to take office in 2025, his economic policies are already sparking intense speculation about their impact on financial markets. One asset poised for significant movement is gold. Investors and analysts alike are buzzing about how Trump’s economic agenda—marked by tax cuts, deregulation, and a focus on American manufacturing—could drive gold prices higher. Let’s dive into why Trump’s economic policies might send gold soaring and what this means for your portfolio.
Trump’s economic policies center on stimulating growth through lower taxes and reduced government oversight. His administration has historically favored massive tax cuts, like the 2017 Tax Cuts and Jobs Act, which boosted corporate profits but also widened budget deficits. Fast forward to 2025, and Trump 2.0 promises more of the same—potentially paired with aggressive tariffs on imports. These moves could fuel inflation, a key driver of gold prices rising under Trump’s economic policies.
Gold thrives in inflationary environments because it’s a hedge against currency devaluation. When the U.S. dollar weakens due to rising deficits or trade imbalances—both likely under Trump’s policies—investors flock to gold. With the national debt already ballooning past $35 trillion, Trump’s plans to juice the economy could push the Federal Reserve to keep interest rates low or even print more money, further boosting gold’s appeal.
Trump’s “America First” stance includes slapping tariffs on foreign goods, a tactic he wielded during his first term. In 2025, expect a redux: steep tariffs on China and other trading partners. While this might bolster domestic industries, it risks igniting trade wars, rattling global markets. Uncertainty is gold’s best friend. As stocks wobble and geopolitical tensions rise, investors will likely pile into safe-haven assets like gold, driving prices upward. Trump’s economic policies may contribute to this uncertainty.
Historical data backs this up. During Trump’s first trade skirmishes with China in 2018–2019, gold prices climbed steadily, peaking above $1,500 per ounce by mid-2019. Today, with gold already hovering around $2,700 (as of March 2025), a new round of tariffs could easily push it past $3,000.
The Federal Reserve’s response to Trump’s policies will be critical. Lower taxes and higher spending could overheat the economy, forcing the Fed to either hike rates to curb inflation or hold steady to support growth. Either way, gold wins. If rates rise, the dollar might strengthen temporarily, but persistent inflation fears would still lift gold. If rates stay low, the dollar weakens, making gold cheaper for foreign buyers and increasing demand. Therefore, Trump’s economic policies could influence the gold rally.
Trump’s past criticism of Fed Chair Jerome Powell suggests he’ll pressure the central bank to keep rates down. Low or negative real interest rates—where inflation outpaces yields—are a gold price rocket fuel. In 2020, when real rates dipped below zero, gold hit an all-time high of $2,075. A similar scenario in 2025 could shatter that record.
So, why are gold prices set to rise under Trump’s economic policies? It’s simple: inflation, uncertainty, and a weaker dollar form a perfect storm. His tax cuts and spending plans risk overheating the economy, while tariffs could disrupt global trade. Add in a Fed caught between growth and inflation, and gold becomes the ultimate beneficiary. Analysts predict prices could hit $3,500 per ounce by 2026 if these policies play out as expected.
For investors, now’s the time to consider gold. Whether through physical bullion, ETFs like SPDR Gold Shares (GLD), or mining stocks, exposure to this precious metal could offset risks from Trump’s bold economic moves. Gold prices are set to rise—don’t miss the train from Trump’s economic policies.
