Gold Prices Rising and Donald Trump: The Connection Explained

Donald Trump and GoldIs it just me? Am I the only one to notice that the more Donald Trump becomes a serious contender for president, the higher gold prices go? Well, that’s exactly what has been happening. Today, I’ll tell you why I think the two are connected.

The other contenders (Clinton, Rubio, and Cruz) are just more of the same. They will continue to believe in the policies of the Federal Reserve. They will let the Federal Reserve come to the rescue (each time the economy softens) with its easy money policies of low interest rates and money printing.

Trump’s Dislike of Fed Policies Pushing Gold Prices Higher

But not Trump. He has been openly critical about the Federal Reserve and its policies. He has gone on record saying the Fed has kept interest rates too low for too long. He’s an old-fashioned businessman. Maybe he thinks we shouldn’t print more paper money out of thin air without backing the currency with a hard asset. Of course, this is music to gold prices.

When you look at the chart of gold prices below, you will see that ever since the odd makers in Las Vegas started increasing the odds of Donald Trump winning the Republican nomination (the beginning of 2016), gold prices have taken off.

Uncertainty Over Trump’s Presidency Could Be Fueling Gold Prices Too

And then there is another part to the story. Can the concern over Trump becoming president be pushing investors into buying gold because of the uncertainty of him actually having the power in Washington? I’ve heard crazier things, but I really need to think about this one. After all, the Republican party’s well-known members, like Mitt Romney, have been giving speeches on the uncertainty a Trump presidency would deliver. How Wall Street will react to a Trump presidency is a big unknown.

For whatever reason, gold prices have been rising the closer Trump gets to the White House; it’s good news for old gold bugs like me. Gold prices are up an astonishing 17% so far in 2016. As I preached for most of 2015, I believe the stock prices of quality and senior gold-producing companies continue to be a bargain, Trump or no Trump.

Gold - Spot Price Chart

Chart courtesy of