Here is a look at Trump trades in 2025 and why gold will benefit.
February 19 (King World News) – Gerald Celente: “Trump trades”—bets that the dollar would continue to strengthen and bond yields rise—that were popular after Donald Trump’s re-election to the presidency have taken a bearish turn. Indeed, leading up to the race for the White House, the U.S. dollar was on an upswing, rising 7 percent since September and hitting a two-year high in January.
But now the dollar has weakened to a two-month low as Trump wages his trade war and bond prices are up. Yields fall as bond prices rise.
“Despite what it feels like, if you zoom out to the beginning of this year, a lot of the Trump trades haven’t worked,” Jerry Minier, co-chief of the G10 countries currency trading at Barclays, told the Financial Times. “That is causing people to reassess.”
The tariffs have been less aggressive than many expected. If the import duties had been higher and quicker, trade among targeted countries would have been hobbled and the dollar’s value should have risen against other currencies.
Trump has championed the idea of weakening the dollar to make U.S. exports cheaper abroad…
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Trump’s global trade war might be “potentially having some growth implications,” giving rise to “an underlying fear that growth might be slowing,” Torsten Slok, chief economist at Apollo Capital Management, wrote in a note.
Bond traders “are caught between a fear that inflation might be higher because of a trade war and a fear that U.S. growth might be slower,” David Kelly, JPMorgan Asset Management’s chief global strategist, wrote in a note.
Emerging nations were assumed to be prime victims of any trade war, but they also have flipped expectations. In the past month, Chile’s peso has gained 3 percent on the dollar, with Brazil’s real and Colombian peso up more than 6 percent each.
TREND FORECAST: Gold Will Benefit
Trump’s trade policies also have been expected to reignite inflation, which would push both bond yields and the dollar’s value higher.
Instead, the dollar has edged down 0.4 percent against other major currencies this year.
If inflation had turned upward again, bond yields would have risen. However, after rising to a 14-month high of 4.8 percent last month, the yield on the bellwether 10-year Treasury note had fallen back to 4.54 percent on 12 February.
The guess on The Street is that the Feds will keep interest rates higher for longer and that will be bullish for the dollar, which Goldman Sachs says will appreciate another 3 percent this year. And on Tuesday, the euro and other major currencies went down, and the dollar went up. Indeed, as we had forecast as two of our Top Trends for 2024, there is the Trump Card and the Wild Card that no one knows how they will be played.
But again, as we have forecast, should the equity markets and/or the U.S. economy go down, as he did when he was President back in 2018, Trump will force the Federal Reserve to lower interest rates which will in turn, bring the dollar down and gold prices up.
MAJOR GOLD PRICE PREDICTION 2025!
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JUST RELEASED! Gold Hits New Record High This Week!
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