Gold has been on a historic rally, surging from $1,700 in 2022 to an all-time high of $3,500 in April 2024. But after this meteoric rise, prices have pulled back to $3,300, leaving investors wondering: Could Trump’s policies trigger a gold market crash?
Gold’s Recent Bull Run: What Drove the Surge?
Gold is known for long periods of stagnation followed by sharp spikes. Recent catalysts include:
✔ Geopolitical tensions (Russia-Ukraine war, Middle East conflicts)
✔ Inflation fears (Central banks hiking rates)
✔ US dollar weakness (DXY index below 100)
✔ Central bank buying (Record gold purchases in 2023-24)
But now, a new factor is in play: Trump’s trade policies.
How Trump’s Tariffs Could Impact Gold Prices
Trump’s aggressive reciprocal tariffs have already contributed to gold’s 25% rise in 2024. Here’s why:
Trade war risks (US-China tensions disrupt global supply chains)
Economic uncertainty (Tariffs could slow growth, boosting gold’s safe-haven appeal)
Dollar volatility (Trade wars weaken USD, supporting gold)
However, recent developments suggest a possible slowdown in trade tensions:
China exempted some US goods from tariffs
Trump softened his stance on Fed rate cuts
Dollar strengthening (DXY near 100)
These factors have led to gold’s recent pullback.
Could Trump Actually Crash Gold? 3 Key Risks
While gold remains strong, several factors could trigger a deeper correction:
1. Stronger US Dollar & Rising Yields
A rebounding DXY index makes gold more expensive for foreign buyers.
US 10-year Treasury yields at 4.5% reduce gold’s appeal vs. bonds.
2. Easing Geopolitical Tensions
If US-China trade talks progress, safe-haven demand may fade.
A stable global economy could shift investments to stocks over gold.
3. Fed Rate Cuts Delayed
Trump wants aggressive rate cuts, but the Fed may resist.
Higher-for-longer rates could pressure gold.
