Jeffrey Christian, a veteran commodities analyst and founder of CPM Group, said gold prices have slipped since Trump won the election, but the significant uncertainty surrounding Trump's second term means gold will head for new highs.
Christian expects gold prices to reach an all-time high by the end of January next year. He speculated in a recent presentation to clients that gold prices could then remain flat for a few months before reaching a cyclical peak in 2026, meaning gold prices would hit new highs multiple times within Trump's first year in office.
Christian stated that potential upward movements will be driven by the high uncertainty of the president-elect's policies, leading investors to flock to gold, silver, U.S. Treasuries, and other defensive assets for safety.
Christian commented on Trump's proposed policies, stating: "There are inherent contradictions in what Trump says, which brings a whole new set of uncertainties that will cause investors to pause. When they are uncertain or worried about the direction of the economy, they will buy dollars, U.S. Treasuries, gold, and silver."
Economists point out that the effects of some of Trump's economic policies may be contrary to their stated goals. For example, experts believe that Trump's plan to impose high tariffs on imported goods will lead to inflation, which Trump has refuted.
He implemented tariffs during his first term in 2017, but inflation did not rise significantly. Economists say that his new tariff plan is much more comprehensive.
Christian pointed out that the CPM Group maintains its prediction that the U.S. economy may enter a recession within the next 24 months. He added that if Trump's economic policies are particularly contractionary, the economic downturn could come faster or be more severe.
Christian said: "There are inherent contradictions in the statements made by president-elect Trump and his aides. You can conclude from some of the things they say that they will significantly cut the budget and reduce government spending, which will be a highly contractionary policy."
However, most economists still believe that the U.S. is heading toward a soft landing, as inflation trends approach the Federal Reserve's 2% target, and economic growth remains solid. The October CPI year-on-year rate was 2.6%, matching economists' expectations. At the same time, according to the latest GDPNow reading from the Atlanta Federal Reserve, the actual GDP growth rate in the U.S. for the fourth quarter is expected to reach 2.6%.
Article reposted from: Golden Ten Data