Source: Wall Street See
According to the latest survey by the media, if Trump returns to the White House, gold will be the best investment portfolio hedging tool.
The survey, conducted from July 22 to 26, covered 480 respondents, including portfolio managers, analysts, and retail investors. The results showed that in the event of Trump winning the election, the number of people who support gold as a safe haven asset is twice that of those who support the US dollar.
At the same time, more than 60% of respondents believe that if this Republican candidate is re-elected as president, the US dollar will eventually weaken.
The logic behind it is that a series of loose policies advocated by Trump, such as reducing corporate taxes, raising tariffs, and relaxing regulations, stimulate economic growth while pushing up inflation and weakening the US dollar. Wall Street is concerned that Trump's aggressive fiscal policy may even force the Fed to restart rate hikes.
If the Republicans achieve full control of Congress, this will give Trump greater freedom to develop comprehensive economic policies, which may further support the gold price.
Morgan Stanley analyst Gregory Shearer recently released a report pointing out that geopolitical tensions, the continuously expanding US fiscal deficit, and global central banks have all pushed up the price of gold. Regardless of the election results, these factors may continue to exist and be further magnified under Trump 2.0 and Republican-controlled Congress.
Shearer wrote:
Gold is currently in a rising position.
Taking history as a reference, media data shows that in the four years of Trump's presidency (January 2017 to January 2021), the US dollar has fallen by more than 10%, while spot gold has risen by more than 50%.
It is worth noting that the rise in the price of gold during Trump's tenure was partly due to the special impact of the COVID-19 pandemic. At that time, the Fed lowered interest rates to near zero, and investors sought safe havens, pushing up the price of gold to the historical high in August 2020.
This time, the macro environment is once again bullish for gold. Wall Street expects the Fed to start cutting interest rates in September. In addition, since 2022, central banks around the world have been buying gold in large quantities to get rid of their dependence on the US dollar.
Editor / jayden