Increasing nerves regarding the Trump Presidency likely account for some of the gains. Although the fundamentals of the gold market remain strong even were Trump not becoming President of the United States of America.
A backdrop of financial repression and global currency debasement involving ultra loose monetary policies and near negative interest rates, a push for cashless society, a still massively indebted U.S. and global economy and still very fragile banking systems all bodes well for gold prices in the coming years – not too mention positive supply demand fundamental that is peak gold.
Trump is icing on the cake in this regard. While it is always best to fade short term noise about breaking news and the latest market developments, ignoring Trump in the White House as an investor is very much a case of trying to ignore a giant white elephant in a very small room.
We should indeed ignore the short term noise of the Trump inauguration next week – although it is set to be compelling box office viewing! However, it would be imprudent to ignore the likely impact of four years of the Trump Presidency on markets and particularly the gold market. On Wednesday past, we had just a little taste of this when his press conference led to turmoil and massive volatility in markets and gold rising on safe haven demand to over $1,200 per ounce.