With Gold breaking all-time highs almost every hour and now up over 22% on the month, alarm bells started going off in my mind about what’s to come. When Gold makes parabolic upside moves, it usually signals that a recession may be on the horizon. For example, from September 2006 to April 2008, Gold rallied 65% and then during the 3-year recession, it rose another 70% before correcting for almost a decade. Hence, violent upside moves in Gold aren’t normal and are indicators of fundamental issues with the monetary & political systems, which breed uncertainty across all markets. However, with the S&P and the Nasdaq constantly making new highs, it begs the question: Is the Gold bug a result of a failure in the monetary system or Trump’s making?
Trump’s Presidency
Since Trump’s election win on the 6th November 2024, the Gold price is up 108% at the time of writing, and this is by no means just a coincidence. With Trump mandating mass tariffs on several countries and a weaker dollar to help with their trade policies, this created the perfect tailwind for Gold to be the safe-haven for institutional investors. Just this week, Trump stated ‘The Dollar is doing Great’ when asked about its year-long downturn, where it’s lost 12% of its value post the Trump inauguration. In Trump’s mind, the dollar has been ‘strong for too long’, and he believes that the dollar has acted as a tax on the US manufacturing industry because it has made US exports less lucrative to foreign nations, whilst competitors like China have profited from trade due to their cheaper currency. In addition to favourable trade, Scott Bessent also believes that a weaker dollar is one of the main ways to refinance the $36 trillion worth of debt, since a cheaper dollar lowers the real value of outstanding debt over time, and that, coupled with a looser monetary policy, the debt gets paid back in cheaper dollars. A win-win for both Trump and Bessent.
Why is this important to understand?
Ultimately, most of the world’s trade and assets that we all hold is paired to the US Dollar and as a result what the dollar does is give an insight into the directionality of the market. Hence, when President Trump and Treasury Secretary Scott Bessent call for a weaker dollar that means the bond market isn’t a safe haven for the institutions and as a result will look for other assets to park their money into.
Gold: The Ultimate Safe Haven
“Gold has intrinsic value. The problem with the dollar is it has no intrinsic value... Gold will store its value, and you’ll always be able to buy more food with your gold”. (Peter Schiff)
For centuries, Gold has been the only asset class that has been stress-tested enough to earn the name of it being called a Safe Haven. Gold has underpinned the evolution of every monetary system, and even as governments have looked to make their own version of money. Banks continue to hold Gold in their reserves because it’s the only asset that can be viewed as stable during periods of instability in the system. And this psychological belief about its utility has been etched into our minds for centuries because everyone believes in the fundamental value of Gold, and this trust is significant when there is mistrust in other monetary systems.
This mistrust was exemplified when the traditional centrepiece of global financial security — the U.S. bond market — became far less attractive under the uncertainty wrought by Trump’s presidency. For decades, U.S. Treasuries were considered the risk-free cornerstone of investor portfolios, offering predictable returns, liquidity, and the implicit backing of the world’s largest economy. Today, that assumption is under strain. Trump’s approach to governance - characterised by erratic policy pronouncements like the Liberation Day Tariffs or waking up one morning and announcing an attack on foreign countries such as Iran has undermined confidence in both the predictability and reliability of U.S. debt markets.
Investors rely on bonds for stability and predictable income, but this stability is predicated on a credible commitment to honouring debt obligations and maintaining monetary discipline. Under Trump, these pillars have been called into question. Repeated public criticisms of Jerome Powell’s hawkish policies, coinciding with calls for lower interest rates have injected volatility into interest rate expectations. Add to this the substantial federal deficits, ballooning debt levels, and ongoing refinancing requirements of $9 trillion now in 2026; investors have looked to Gold as a mid-term solution against Trump’s fickleness. This fickleness is exacerbated when Trump talks to the press about a country not honouring their tariffs and then threatens to increase their % in a bid to show America’s supremacy over them. This volatility of the TACO trade will continue, and as investors grow increasingly tired of Trump’s empty threats, they will continue to pivot their money into Gold.
The International Gold Bug
This political climate has also reshaped the behaviour of international investors. For decades, countries such as China, Japan, and members of the European Union routinely recycled trade surpluses into U.S. Treasuries, effectively financing American spending while earning steady returns. Today, this strategy is being reconsidered. Political unpredictability in Washington, combined with the weaponisation of the dollar in sanctions regimes, has made large holdings of dollar-denominated assets increasingly risky. Countries can no longer assume that U.S. policy decisions will remain neutral or that their access to dollar liquidity will be uninterrupted during geopolitical tensions, especially under Trump.
China exemplifies this shift. While still a major holder of Treasuries, Beijing has steadily reduced its relative exposure to U.S. debt and simultaneously increased its Gold reserves. The logic is straightforward: Gold carries no counterparty risk, is impervious to political or fiscal mismanagement, and cannot be frozen or devalued by policy shifts. In an era where the dollar is increasingly seen as a political instrument rather than a neutral reserve asset, Gold represents not only a store of value but also a tool for strategic financial sovereignty. Other nations have followed suit, diversifying reserves away from Treasuries and into assets that are immune to policy whims, signalling a structural rebalancing of global reserve holdings. Gold offers stability and a long-established track record of preserving purchasing power during periods of economic & geopolitical stress. As trust in traditional systems wavers, the psychological and practical appeal of Gold only strengthens, reinforcing its status as the enduring safe haven for global investors.
Gold Thesis: 2026
As we enter 2026, my thesis for Gold’s expansion hasn’t changed and any pullback will be an opportunity to add with a view that by the end of Trump’s presidency the Gold/USD pair will be at $10,000 per ounce. With the new Fed Chair coming in May who will be more dovish towards U.S monetary policies, this will mean the dollar should continue to weaken and all assets should continue to rise if inflation remains steady between 2.5-3%.
For most of 2025, both risk assets and Gold had risen simultaneously, hence as it pertains to whether we should see a breakdown in U.S equities. I believe that due to the mid-term elections, there will not be a major period of economic downturn in 2026, because Trump will want to show to the American public that the economy is stable and doing well. Hence, recession fears will continue to be an overhang but that is something to worry about in 2027 or 2028, at least for now.