Source: Wall Street News

With rising risk sentiment regarding Trump, both Gold and Emerging Markets MMF, typically moving in tandem with the USD, have shown rare divergence in trends.

According to Bloomberg data, the 30-day correlation between Gold and the MSCI Emerging Markets MMF Index has fallen to its lowest point in nearly three years.

Over the past three years, these two Assets have been positively correlated 86% of the time, and now, they have shown a 30-day negative correlation, which is only the fifth occurrence in three years.

With Trump's imminent presidency, demand for the USD among investors has increased, driving the USD Index to its highest level in more than two years. The market expects significant changes in USA economic policy, which has led to a decline in risk Assets such as Emerging Markets MMF.

Nick Rees, a Senior Analyst at Monex Europe Ltd., stated:

"The market is attempting to adapt to the new normal under Trump, but there is currently a lack of certainty about this state. Gold may perform well, despite expectations of long-term rising USA interest rates putting pressure on Emerging Markets MMF."

Unlike Emerging Markets MMF, Gold, as a safe-haven Asset and inflation hedge tool, has resisted the effects of a strengthening USD. In 2024, Gold recorded its largest annual increase since 2010, currently priced at 2,657 USD per ounce.

Goldman Sachs predicted in a report last year that by 2025, Gold prices would reach 3,000 USD, supported by the expectation of a rate cut by the USA, stable demand from central banks, and tariffs imposed by Trump on trading partners.

Rees believes:

"If concerned about trade conflicts in the USA, buying Gold now is a good choice."

编辑/jayden