According to Bloomberg and some other online sources, the global trade war started by Donald Trump will eventually increase the dollar value of gold. In particular, they say that the price of gold may reach the 5-year high in the near future.
The mentioned prediction was made by Sprott U.S. Holdings Inc. CEO Rick Rule. He is reported to have been working with gold for over 40 years and therefore he has been good at predicting gold prices.
in particular, the expert is sure that the tougher relations between major economies will eventually force international investors into looking for safe-haven assets like gold. If that’s the case, this will start a new 30-year bullish cycle in the global market of gold. This year alone, the cost of an ounce of gold may reach 1400 dollars and even more. These days, the gold investments made by international investment funds are getting closer to the highest level in 5 years.
For those of you how don’t know, President Trump introduced customs duties on steel and aluminum imports and later signed a memorandum on resisting China’s unfair external trade practices. On top of higher duties on Chinese products, Donald Trump keeps on demanding from the U.S. Department of the Treasury to cap China’s investments in the American economy. By the way, China is reported to have already responded to President Trump’s actions with raising the duties on more than 100 American products.
At the same time, the experts interviewed by Bloomberg assume that the trade war will eventually cut the demand for American assets, which will affect the entire American economy through raising the federal budget deficit and making the dollar more vulnerable.
According to Rick Rule, the international investment community’s trust in the U.S. dollar and 10-year U.S. bonds has always been the most significant factor backing the stability of international financial markets.
