Gold Over Dollar: Investors' Top Hedge for Trump 2024

Why Investors Prefer Gold Over the Dollar as the Best Hedge in a Potential Trump 2024 Victory

Editorial Team (ET)June 30, 2025

Gold is proving to be the go-to asset for investors preparing for a potential second term for Donald Trump. According to the latest Bloomberg Markets Live Pulse survey, gold is favored over the US dollar as the best portfolio hedge in the event Trump retakes the White House. The survey, which gathered opinions from 480 respondents, highlights a significant preference for gold, with proponents outnumbering those picking the dollar two-to-one.

Historical Context

History supports the survey's findings. During Trump's first term, a Bloomberg gauge of the dollar slid by more than 10%, while the spot price of gold surged over 50%. This period saw significant economic policies that influenced market behavior, including tax cuts, tariffs, and deregulation. These measures were viewed as inflationary, which historically benefits gold.

Survey Insights

The Bloomberg Markets Live Pulse survey provides a snapshot of current market sentiment. Over 60% of respondents anticipate the greenback weakening if Trump secures another term. This preference for gold as a safe haven is rooted in the belief that Trump's policies will continue to drive inflation and potentially force the Federal Reserve to increase interest rates.

Gold's Performance During Trump's Presidency

From 2016 to 2020, gold saw a substantial rally. Investors flocked to the precious metal seeking safety amid the economic uncertainty fueled by Trump's policies. The Covid-19 pandemic further amplified this trend, with gold prices reaching record highs in August 2020.

Economic Policies and Market Impacts

Trump’s economic policies, particularly his tax cuts, tariffs, and deregulation, are seen as inflationary. These measures, combined with a potential Republican control of Congress, could grant Trump greater leeway in enacting sweeping economic changes. Such a scenario is likely to boost gold prices even further.

Federal Reserve’s Role

The Federal Reserve’s interest rate decisions play a crucial role in the performance of gold. Under Trump’s policies, the Fed might be compelled to hike rates to combat inflation. However, the anticipation of rate cuts in the near future also supports gold's appeal, as lower interest rates make non-yielding assets like gold more attractive.

Geopolitical Tensions and Gold

Geopolitical tensions have historically driven gold prices higher, and a Trump second term could exacerbate these tensions. Factors such as the growing US deficit, reserve bank diversification, and inflation hedging are likely to continue driving bullion prices higher.

Market Sentiment

Investor sentiment towards gold is overwhelmingly positive in the context of a Trump second term. Many investors are adjusting their portfolios to increase gold holdings, anticipating a weaker dollar and higher gold prices. This trend is evident in the survey responses, with several respondents citing severe disruptions to markets and trade as key concerns.

Gold vs. Dollar Debate

The debate between gold and the dollar as the preferred safe haven continues. Proponents of gold argue that its historical performance, coupled with current economic policies, makes it the better choice. On the other hand, some economists believe that Trump's policies could strengthen the dollar, particularly through harsher tariffs and deficit-boosting fiscal policies.

Technical Analysis

Technical factors also support gold prices. Analysts predict that the favorable macroeconomic backdrop will continue to drive gold's performance. Factors such as geopolitical tensions, inflation, and central bank diversification away from the dollar are all seen as supportive of gold.

Central Banks and Gold Accumulation

Central banks have been aggressively accumulating gold since 2022, seeking to diversify away from the dollar. This trend is expected to continue, further supporting gold prices. The survey highlights that two-thirds of respondents expect a Trump reelection to undermine the dollar’s status as the world’s reserve currency.

Survey Respondents’ Opinions

The survey respondents provided diverse opinions on the impact of Trump’s economic policies. While many see gold as the safer bet, some believe the dollar could still perform well. For example, some respondents highlighted the potential for sustained high deficits and lower interest rates to push further de-dollarization.

Economic Risks and Opportunities

Trump’s policies present both risks and opportunities for investors. While the potential for higher inflation and geopolitical tensions pose risks, they also create opportunities for gold investors. As such, many investors are positioning themselves to benefit from these potential market shifts.

Conclusion

In conclusion, the Bloomberg Markets Live Pulse survey clearly indicates that gold is the preferred safe haven in the event of a Trump second term. With a historical precedent of strong performance under similar conditions, and current economic policies supporting further gains, gold appears to be in a prime position to rally. Investors are advised to consider gold as a key component of their portfolios to hedge against potential economic and geopolitical risks.

Donald Trump

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