Tags: gold | trump | fed | prices
OPINION

Gold Prices Poised to Surge as Trump Fights Fed

Gold Prices Poised to Surge as Trump Fights Fed
(Bashta/Dreamstime)

Adam Baratta By Wednesday, 12 June 2019 05:30 PM EDT Current | Bio | Archive

Donald Trump continues his attacks against the Federal Reserve and their strong dollar Tuesday with his most recent tweet….

“This is because the Euro and other currencies are devalued against the dollar, putting U.S. at a big disadvantage. The Fed Interest rate way too high, added to ridiculous quantitative tightening! They don’t have a clue!” he wrote on Twitter.

Since Trump began his attacks of the Fed in August of last year, gold has risen 12% and surged from $1,190 per ounce to around $1,337 in recent trading.

Gold bulls, which have been in hiding over the past five years, are coming out in droves inspired by the trade wars, global slowdown, and the Federal Reserve pivot from it’s tightening cycle.

In just a few short months the Fed has completely changed course. In October last year their dot plot called for four 25 basis point rate hikes by the end of 2020. Now the market has priced in three rate cuts.

What has gold bulls most excited is how effectively Trump has played the Federal Reserve. He has continued his pressure beautifully in this process, attacking them and their strong dollar policy in dozens of interviews and tweets and has ramped up his attacks in recent months.

Trump is certain that other countries receive a huge advantage by devaluing their currencies that puts the United States in Jeopardy. His trade wars are a direct result of this unfair advantage and rather than wait for the independent Fed to “wake up and take action” that truly helps the economy, Trump has taken matters into his own hands. The result has been that the Fed is now stuck, will succumb to Trump’s will, and be forced to cut rates now that the yield curve has inverted.

“Trump has been calling for a 100 point basis cut from the Fed and looks like his efforts are paying off. Trump understands the way the economy works. He understands that a weaker Dollar will launch us into a far more level and competitive playing field and has been calling out the Federal Reserve for nearly a decade for their bubble making policies that have hurt the real economy”.

As a result, gold prices have been on a tear and finds its price movement outperforming the highest flying stock market in history and is up more than 10% since Trump began his attacks. This looks like the breakout moment that we’ve been expecting. When both bond gurus like Jeffrey Gundlach, and now market geniuses like Stanley Druckenmiller alike all calling for much higher gold prices it’s a sign that momentum has changed.

The confluence of slowing global growth, loosening Fed, and a powerful US President’s laser focus on finding ways to weaken the dollar against countries that have manipulated theirs lower, spells the perfect storm for much higher gold prices. This is the perfect set up for gold break out above it’s five year ceiling of $1,360.

When it goes experts predict it could surge to $1,500 very quickly. My recent documentary The Mar a Lago Accord, highlights how Trump will make every effort to devalue the dollar to regain a competitive advantage for the United States, and by doing so would make America great again. To see that documentary, click here now.

Gold investors are all watching to see how this will play out in the short term. The FOMC meeting next week will determine the Fed’s next steps. Will Trump win and force their hand or will they continue to remain pat? The market is betting on Trump and is pricing in three cuts before the end of the year.

The real question will be if the Fed takes the bait before the markets roll over allowing for the stock market rally to continue, or will they only cut rates come after the market is down 20%? One thing looks fairly certain either way, gold prices should continue higher as both a hedge against a downturn, and a tool to take advantage of the coming dollar weakness should Trump prevail.

Adam Baratta is the author of the national best-selling book "Gold Is A Better Way." He is one of the leading voices in the field of investments and precious metals today. Adam is the co-owner of Advantage Gold, the highest rated precious metal firms in the country, and the creator of an educational member site. To receive a free copy of his book, go to: https://goldisabetterway.com/

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AdamBaratta
Gold bulls, which have been in hiding over the past five years, are coming out in droves inspired by the trade wars, global slowdown, and the Federal Reserve pivot from it’s tightening cycle.
gold, trump, fed, prices
745
2019-30-12
Wednesday, 12 June 2019 05:30 PM
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