The price of gold is rising after wide-ranging comments from U.S. president-elect Donald Trump that have heightened concerns about geopolitical instability.
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In an hour-long news conference, Trump mused about everything from using military force to take control of Greenland and the Panama Canal, to annexing Canada through “economic force” and banning wind turbines that produce clean energy.
Trump also reiterated his pledge to impose tariffs of 25% or more on many of America’s closest allies, prompting worries about impending trade wars and rising inflation. Consequently, the price of gold is up nearly 1% and trading at $2,682 per ounce.
Safe Haven Asset
Gold is viewed as a safe haven asset and its price tends to rise during periods of volatility. Analysts say gold’s price is likely to rise further as Trump takes office, inflation reappears, and concerns mount over a slowing U.S. economy.
Trump is to be sworn in as U.S. president on January 20. His proposed tariffs and protectionist policies are expected to be inflationary and could spark a trade war, notably with China. This in turn could ratchet up gold’s appeal as a safe haven asset and hedge against inflation, say some commodities analysts.
Gold is coming off one of its best years ever in 2024, having hit multiple all-time highs and rising nearly 30%, outpacing the growth in equities.
Is the SPDR Gold Shares ETF a Buy?
Wall Street analysts don’t offer ratings or price targets on the SPDR Gold Shares exchange-traded fund (GLD), which holds physical gold and tracks the price movements of the precious metal. So instead, we look at the three month performance of the ETF. As one can see in the chart below, the GLD ETF has only risen about 0.89% in the past three months following a big rally earlier in 2024.
