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Gold has emerged as a shining star in recent markets, defying the downturn plaguing cryptocurrencies like Bitcoin. Throughout 2024, the precious metal has seen impressive growth, reaching an all-time high of $2,450 per ounce and accumulating a 17% gain over the past six months, making it an attractive investment option. This robust performance has fueled optimism among market analysts, with some at Bank of America predicting a potential surge to $3,000 per ounce within the next 18 months.
According to the analysts at Heraeus, a precious metals company, a potential second term for Donald Trump could further bolster gold's appeal. Their reasoning hinges on the economic policies a Trump presidency might implement. They anticipate renewed trade conflicts and heightened tensions with China, mirroring the issues that dominated Trump's first term. Additionally, Heraeus suggests Trump might take steps to weaken the Federal Reserve's independence, potentially through public pressure or personnel changes.
This speculation stems from Trump's past criticisms of Federal Reserve Chair Jerome Powell's decisions to raise interest rates. The Heraeus report highlights proposals from Trump's campaign that could undermine the Fed's autonomy and potentially lead to Powell's early removal. If Trump wins re-election, he could appoint a more dovish candidate to replace Powell after his term ends in 2026.
However, despite the current gold rush, a cloud of uncertainty hangs over the global economic landscape. Geopolitical tensions and potential policy shifts under the Trump administration are just some of the factors that could create unpredictable market fluctuations. The value of assets like gold and Bitcoin is intricately linked to a complex web of economic forces. In today's volatile world, predicting the exact trajectory of these markets remains a challenging task for even the most seasoned experts.
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