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Despite the dollar’s strength and lower prospects for Fed rate cuts, Trump’s second term has increased demand for gold. The precious metal’s price appears to be on track for a new high in 2025. 

Investors’ fears began last year. They turned to gold to protect themselves from global uncertainties. This is especially true as the US Federal Reserve cut interest rates three times. As a result, gold’s 27% price increase in 2024, the highest since 2010, made it one of the year’s top-performing investments. 

However, as 2024 elapsed, gold prices dropped between November and December. Apparently, there was a selloff after the US elections and a December meeting where FED officials lowered their predictions for interest rate cuts in 2025.

This month, investors are still unsure about Trump’s threats of US import tariffs. This has helped support the metal’s value. Analyst Robin Bhar said, “Geopolitical risks continue to bubble in various hot spots, adding to inflationary risks and continued safe-haven demand for gold.”

Gold is performing better than expected 

US President Donald Trump told his team to put a 25% tax on imports from Colombia due to issues with illegal migrants. However, the tax was paused after Colombia decided to take back all illegal migrants sent from the US.

Now, Trump has said he will soon add tariffs on companies that make medicines and computer chips. He also said that he could charge tariffs on aluminum and copper and consider tariffs for steel and other businesses.

As a result, it has raised concerns that Trump’s nationalistic policies could lead to higher inflation. it could also cause the yield on the 10-year US government bond to rise from a low it had reached in over a month. This situation supports the US dollar and puts pressure on the price of gold.

A survey of 36 analysts and traders shows that they expect gold to be priced at $2,756 per troy ounce in 2025. This is an increase from the previous prediction of $2,674 made three months ago. Is it possible? Here’s how the prices have been moving.

Yesterday, the XAU/USD remained steady below the 23.6% Fibonacci retracement level. This rise was seen from December to January. Also, today gold has a surge from yesterday’s last close of $2740 to $2743.

Spot gold/USD trading data. Source: Tradingview

Moreover, the indicators on the daily chart are doing well and staying in a positive range. This, along with the recent breakout through the $2,720-2,725 horizontal barrier, says that the path of least resistance for gold price is to the upside.

Next, the overnight high, which is around $2,786 mark. This was the highest point since October 2024 reached last Friday. The all-time high is close to the $2,790 level. If buying continues and drives prices above $2,800, it will encourage more bullish traders and strengthen the ongoing upward trend seen in the past month.

However, it’s wise to wait for clear signs of selling below the overnight low near $2,730 and the $2,725-2,750 barrier that has now become support before betting on larger losses. The price of the commodity could fall to around $2,707-2,705, which is the 38.2% Fibonacci level.

The Trump administration could spell trouble for crypto 

POTUS’s involvement in crypto affecting its credibility is a matter that needs coverage. The US president faced criticism for launching a memecoin. He, however, said that he doesn’t know much about crypto. 

This brought more criticism. For instance, Danny Scott, CEO of CoinCorner, “Trump’s comments about not knowing much about the coin back up my opinion that he is making a mockery of the industry. It’s a stunt.”

In addition, crypto insiders worry that the coins will make the public even more wary of an industry already filled with scams and bad-faith actors. Angela Walch, a crypto researcher and writer said, “The crypto sector put someone in power whose first act is to emphasize and take advantage of the opportunity for grift within crypto […] And that’s just embarrassing.”

Other investors claim that the coins will allow Trump to get money from foreign enemies and be distracted by personal interests. They claim that it will harm Americans as a whole.

To what extent is the crypto industry being affected by the choices of the pro-crypto administration?

For now, the good outweighs the bad.

According to BlockBeats, billionaire hedge fund manager and Bridgewater Associates founder Ray Dalio has issued a warning about a potential bubble in the U.S. stock market driven by investor enthusiasm for artificial intelligence. Dalio compared the current situation to the dot-com bubble that burst at the turn of the century.

Dalio highlighted that the current pricing levels in the U.S. stock market are extremely high and coupled with interest rate risks, this combination could potentially burst the bubble. He noted that the current phase of the market cycle is very similar to the conditions in 1998 or 1999. In his view, while there is no doubt that new major technologies will change the world and achieve success, some investors may be confusing this technological success with investment success.