Impact of Trump and the Fed on the Gold Price
The gold price is currently heavily influenced by a combination of political uncertainties and central bank purchases, which is pushing the price close to its yearly high. In particular, the policies of Donald Trump and the behavior of the US Federal Reserve (Fed) play a significant role in this.
- Trump Policy: The planned higher tariffs and rising federal deficit under Trump are considered inflationary, which could normally put downward pressure on the gold price. However, these measures also have secondary effects: Chinese authorities might respond to the tariffs by devaluing their Renminbi, which could spur demand for gold in China – one of the largest precious metal markets. Additionally, inflation in low-growth regions like the EU could be exported, favoring stagflation and accelerating a rate-cutting cycle. This, in turn, has a positive effect on the gold price.
- Fed Influence: The monetary policy of the US central bank remains a central factor for the gold market. Rate cuts or expansive measures tend to increase the attractiveness of gold as an inflation-proof investment.
Current Market Development
- The average gold price in March 2025 was around $3,119 per troy ounce.
- In April 2025, the price even reached peaks around $3,310, with a short-term peak of nearly $3,500 on April 22.
Forecasts for 2025
- Experts expect a moderate to strong upward trend in the gold price until the end of the year, with values between about $3,000 and over $3,350 per troy ounce.
- Especially in the summer, an increase is expected, driven by trade conflicts and an increasing de-dollarization of global trade, leading countries to rely more on gold as a hedge.
Importance for Private Investors
The combination of geopolitical tensions (e.g., trade conflicts under Trump’s presidency), monetary policy decisions by the Fed, and global economic uncertainties make precious metals like gold an important hedging option against risks such as inflation or currency depreciation.
Therefore, private investors should:
- Cautiously observe the political situation, particularly regarding trade policy and central bank decisions.
- Consider market volatility, as short-term fluctuations are possible.
- Be able to benefit long-term from the expected upward trend if they invest in time.
In summary, political uncertainties surrounding Trump’s trade policy combined with monetary policy impulses from the Fed currently drive the gold price close to its yearly high and offer both opportunities and risks for private investors in 2025.