Gold is seen as the best hedge if Donald Trump returns to the White House, according to a Bloomberg Markets Live Pulse survey. The survey, which included 480 respondents, found that proponents of gold outnumbered those favoring the US dollar by two-to-one. Over 60% believe the dollar will weaken if Trump is re-elected.
During Trump’s previous term, a Bloomberg gauge of the dollar dropped more than 10%, while the spot price of gold surged over 50%. Trump’s policies, including tax cuts, tariffs, and reduced regulation, are considered inflationary and could prompt the Federal Reserve to raise interest rates again.
Gold’s rise during Trump’s presidency was also driven by investor anxiety during the Covid-19 pandemic and a near-zero federal funds rate. Gold reached a record high in August 2020 amid global lockdowns.
However, some top Wall Street economists argue that Trump’s policies could strengthen the dollar through harsher tariffs and deficit-boosting fiscal measures, potentially delaying expected interest rate cuts by the Fed. MLIV Pulse respondents were divided on this potential impact.
