Some of you may recall that precious metals’ first reaction to the historic reelection of Donald Trump was to sink like a stone. It wasn’t a surprise, really; whenever businesses and investors feel particularly optimistic about the prospects for economies and markets, risk-off assets such as metals tend to suffer.
I, for one, didn’t see that backslide lasting long. My reasoning was simple: The world already was fraught with uncertainty…and once the election dust settled, Donald Trump, for all we know about him, likely wasn’t going to make it any less uncertain during his second go-round as president.
Gold Up 70% Since U.S. Presidential Election
Other observers felt much the same way. Following gold’s post-election drop. Ian Salisbury of Barron’s suggested that “gold prices’ slide in response to election results could be a head fake,” reasoning:
“From inflation to geopolitical uncertainty, the prospect of a second Donald Trump presidency only makes the investment case look stronger.”
Sure enough, metals regrouped in the weeks following the election and have kept surging. Gold did tumble 8% from the days leading up to the presidential election through the second week of November 2024. But from that point through today…a period that has seen the S&P 500 rise a little more than 20%…gold is up nearly 70% and is closing on $5,000 per ounce.
Now it seems that the broad climate of gold-favorable global economic uncertainty exacerbated by the mercurial Trump is poised to pay yet another dividend to the yellow metal. Recently, the Department of Justice (DOJ) suggested it may indict Federal Reserve Chair Jerome Powell in connection with testimony he gave before Congress about cost overruns associated with the ongoing renovations of the central bank’s headquarters. However, many, including the Fed chair himself, see this effort by the DOJ as being merely a pretext for intimidating Powell and the Fed into lowering interest rates on behalf of the president.
Attacks on Fed “a Key Bullish Wildcard” for Metals
With this latest and most direct attack (so far) on the Fed, concerns about the central bank’s independence during the second Trump administration are at their most pronounced. And given the implications of not only the emergence of another uncertainty “driver” but one with the potential to directly undermine confidence in the Federal Reserve, it makes all the sense in the world why faith in gold remains so high.
“We see increased interference with the Fed as a key bullish wildcard for precious metals in 2026,” Carsten Menke of global wealth manager Julius Baer Group Ltd. said recently.
Indeed, the possibility of an indictment against the chairman of the world’s most influential central bank underscores the importance of including not only safe-haven assets among one’s portfolio assets, but safe-haven assets which remain immune from the impacts of a diminishment in American exceptionalism.
More broadly, notes Saxo Markets chief investment strategist Charu Chanana, the possible indictment serves as “a reminder of how many uncertainties markets are juggling — geopolitics, the growth/rates debate, and now a fresh headline-driven reminder of an institutional risk premium.”
And a reminder, as well, of why the most politically and industrially neutral safe-haven asset available remains on track to keep climbing into the furthest outreaches of record territory.This post is created and published for general information purposes only. The Gold Strategist blog disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this post – or any other post featured at this blog – should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.
The Gold Strategist 