An analysis of the current movements in commodity futures and cryptocurrency prices suggests that markets appear poised to repeat the movements seen during the last period of US President Donald Trump’s term from 2017 to 2021.
Some analysts may see the movement of commodity and cryptocurrency prices as being influenced by current geopolitical and domestic issues, but I believe that these movements will be more influenced by the ways and means that President-elect Donald Trump will determine this time while resolving the current prevailing issues.
Undoubtedly, the current situation may be different in light of the challenges currently prevailing in 2025 when President-elect Donald Trump comes into office on January 20, 2025, as he will face some different issues that he will have to solve immediately to make the world the way he wanted it last time.
The following issues could draw his attention before he redesigns his policies to implement his preferences:
debt ceiling limits
Last Friday, Treasury Secretary Janet Yellen told lawmakers that the U.S. Treasury may need to take “extraordinary action” as early as January 14, 2025, to prevent the United States from defaulting on its debt.
Yellen urged lawmakers in the US Congress to work to protect the faith and credit of the United States.
The U.S. debt is expected to fall by about $54 billion on Jan. 2 due to the scheduled redemption of nonmarketable securities held by a federal trust fund tied to Medicaid payments.
Under the 2023 budget deal, Congress suspended the debt ceiling until January 1, 2025. The U.S. Treasury will be able to pay its bills for several months, but Congress will have to address the issue at some point next year.
Failure to act could prevent the Treasury from paying its debts, and a U.S. default would likely have dire economic consequences.
Congress first set the debt limit at $45 billion in 1939 and has had to raise it 103 times since then, as spending has consistently outpaced tax revenues. The national debt was 98% of GDP last October, up from 32% in October 2001.
Inflation
The Federal Reserve, which began easing its tight monetary policy in September 2024, is expected to cut interest rates further, albeit cautiously. Stocks fell last week as the Fed’s updated forecasts pointed to just two rate cuts in 2025, down from the three previously expected and below the four to five cuts the futures market had been anticipating.
There is no doubt that stock markets in 2024 have shown remarkable resilience despite intermittent pullbacks caused by inflation concerns, interest rate hikes, and geopolitical tensions. These pullbacks, often viewed as “reductions” or “rate cuts,” have allowed the broader bull market to remain intact.
Energy
The energy sector is set to bring new challenges for President-elect Donald Trump as the current geopolitical conditions are likely to become more complex. Ukrainian President Volodymyr Zelensky accused Slovak Prime Minister Robert Fico on Saturday of opening a “second energy war front” against Ukraine on Russia’s orders, as a gas transit dispute between the two countries deepens.
Ukraine pumps Russian natural gas through its territory to several European countries, including Slovakia. But Ukraine is expected to stop that flow when the current transit agreement — signed before Moscow invaded Ukraine — expires at the end of the year.
There is no doubt that this major development may force US President-elect Donald Trump to intervene between Ukraine and Russia before forcing the European Union to buy more oil and gas from the United States rather than face more tariffs, as he warned a few days ago.
This scenario has put downward pressure on oil and natural gas prices over the past week, which could continue to keep oil and natural gas futures under heightened volatility until President-elect Donald Trump takes office on January 20, 2025.
Precious metals
Cryptocurrencies are poised to continue their upward momentum after their market cap nearly doubled in 2024.
But its wider adoption in 2025 will depend on how effective the crypto-friendly Trump administration is in setting a clearer regulatory path for the crypto boom.
“This has undoubtedly been a strong year for cryptocurrencies, with a 90% or more increase in total market capitalization,” Citi Research noted in its 2025 outlook. “Markets are bullish on the regulatory front given the crypto-friendly views of the incoming US administration and its staff.”
Despite Trump’s assertions that he is willing to move away from the current administration’s “anti-crypto crusade,” which he has criticized for stifling innovation, his proposed policies include a shift from enforcement-focused regulation to a more legislative approach, with the goal of reducing uncertainty for both investors and issuers.
If Donald Trump is unable to provide a clear vision for his policies to deal with the US debt crisis and the rise of digital currencies, uncertainty will remain for precious metals even after he joins the White House.
Gold futures are trading below the 200 DMA at $2653 on the 4-hour chart, indicating a short-term bearish trend for XAU/USD gold futures.
On the daily chart, gold futures are trading below the 100 DMA at $2,643 after forming a bearish crossover between the 9 DMA and the 20 DMA, suggesting a continuation of the selling wave during the first half of January 2025.
Silver futures are hovering around a pivot point as a bearish crossover formation is about to be completed with a bearish move by the 9 DMA below the 20 DMA on the weekly chart. I see natural gas futures trading this week. This suggests a fresh sell-off in silver.
Strategic summary for traders
In addition to analyzing the movements of gold, silver, and natural gas futures, my advice to traders is to judge directional moves and resistance and support levels while looking at the movements of futures contracts for these three commodities and cryptocurrencies during the last period of President-elect Donald Trump’s term from 2017 to 2021.
Conclusion: I find that the growing fear of a worsening economic crisis revolves around the hopes and expectations of President-elect Donald Trump on his first day in office on January 20, 2025.
Disclaimer: This analysis is based on observations and does not constitute investment advice. Readers are encouraged to make their own investment decisions in gold or natural gas at their own discretion.