Historically, gold prices have remained a perfect barometer for mapping the extent of economic uncertainty, but now, with elevated indecisiveness, gold bugs are increasingly relying on President Trump’s trend to predict the next directional move in .
Undoubtedly, this dependence has suddenly accelerated in Trump 2.0 as the gold bugs wait with an eye on Trump’s action on the diplomatic front, before flocking in the same direction.
At the beginning of the Trump 2.0, global central banks felt the need of raising their reserves with enhanced gold stake, and started buying spree at a higher pith soon the U.S. President Donald Trump imposed trade tariffs on the trading partners to treat them according to his political priorities behind his fake notion to make America grate as he used to proclaim when he was contesting 47th U.S. presidential elections in November 2024.
After his first term as the 45th U.S. President, from Jan. 2017- Dec. 2021, and loosing 46th U.S. Presidential election in 2020, Donald Trump resumed the office on Jan. 20, 2025 with his isolationist foreign policy “America First”- a policy that emphasizes taking foreign policy and domestic policy decisions which serve interests of the United States before the interests of all other nations and peoples. This typically manifests itself in policies of non-interventionism, American nationalism, and protectionist trade policy.
But soon Donald Trump took office, he reversed the meaning of this policy, which was a major part of his political agenda while he was contesting the 47th presidential election, and has achieved complete reversal to date.
Now, Trump’s agenda seems to be inclined towards forceful invasion of the oil-rich nations, like did on Jan. 2, 2026, in Venezuela before threatening Iran, and heading towards capturing Greenland.
President Donald Trump on Saturday appeared to change tack over Greenland by vowing to implement a wave of increasing tariffs on European allies until the United States is allowed to buy Greenland.
Trump has repeatedly insisted he will settle for nothing less than ownership of Greenland, an autonomous territory of Denmark. Leaders of both Denmark and Greenland have insisted the island is not for sale and does not want to be part of the United States.
Undoubtedly, any military action by the U.S. against Denmark’s vast Arctic Island would damage NATO and legitimize the invasion of Ukraine by Russia.
Moreover, Trump’s changing diplomacy seems to attain an extreme level, as on Saturday, Bloomberg News reported that the Trump administration wants nations to pay $1 billion to stay on his peace board, citing a draft charter.
On reviewing the historical movements of the gold futures since 2011, I find that the gold futures continued to trade in a range between $1,052 – $1,925 up to October 2023 despite geopolitical tensions and other global worries, as the price movements were primarily dependent on demand and supply equations.
But soon, Donald Trump won the presidential election, gold futures picked up an uptrend as the global central banks had mapped the advent of an era of economic and geopolitical upheavals, and he soon took office.
The gold futures found a breakout above the upper end of this range at $1,925 in October 2023 as the global central banks started a buying spree, led by the Chinese central bank, to maintain the second position of its gold reserve, as the fear of global economic uncertainty sparked after the imposition of trade tariffs by Trump’s administration.
Since then, gold futures have attained a record high, from where previous rallies tested in 1980, August 2011, and March 2022 look too small to be considered as peaks, as gold futures hardly reacted to geopolitical disturbances.
Now, the gold bugs look too keen to react over the geopolitical moves till Trump remains absent, but soon he intervenes, even a minor prob turns into a mountain, resulting in a sharp reactionary move by gold futures.
Undoubtedly, gold futures have witnessed sharp reversals after testing the previous peaks despite the presence of bullish momentum when the majority of the traders turned extremely convinced about the sustainability of the never-ending bullish momentum.
Now, the situation of the bullish sentiments is the same as it was during the previous rallies, while the majority of precious metal investors prefer to eye Trump’s daily announcements, gauge the directional moves by the gold futures, as the technical and economic equations have taken a back seat.
On Monday, gold futures, after a gap-up opening at $4,680.71, after testing the day’s low at $4,660.29 and day’s high at $4,688.50, currently trading at $4,675.50, have formed a ‘bearish dozi’ at the peak as Friday’s daily candle was a bearish candle, closed at $4595.40, after testing the day’s high at $4,625.84 despite testing the day’s low at $4,540.
Though, in an article, published by the Reuters, Morning Bid: US picks a fight with its biggest creditor, as its author Wayne Cole explains the current developments in a better way that how the Trump’s policies have gone beyond limits to hurt the Americans as the U.S. president threatens to pile an extra tax on American consumers in order to force a European country to sell him a territory it can’t legally sell. Oh, and the tariffs themselves might well be illegal, assuming the Supreme Court finally gets around to making a ruling.
Undoubtedly, this article attracted some criticism from the people who have turned bullish about the current momentum in gold prices, but they must not forget that every rally finally melts.
And, this rally is now missing the real drivers as seen during 2024-25 when the global central banks were the main buyers to lessen their dependence on the dollar by purchasing the yellow metal, which can be used to buy anything in the world.
Now, the gold has lost its safe haven potential a long time back due to artificially created hype of geopolitical uncertainty, as everybody knows that any step to over power to capture a sovereign country could lead to a third world war.
Since Venezuela’s capture has extended the confidence of Trump, who, as the President of the U.S., knows better that such an act would never be on the agenda of U.S. foreign policy, and could lead to extremely fatal consequences.
I find that this rally in precious metals seems to have overlooked the inflationary pressure, which has turned a global concern now, could lead to panic selling as soon as the central banks find it impossible to cut interest rates anymore, while the Japanese Central Bank is considering hiking the interest rates soon to control inflationary pressure.
Here, I find that any breakdown by the gold futures below the significant support at $4527 in a daily chart could accelerate the selling spree.
Disclaimer: Readers are advised to take any position in gold futures at their own risk, as this analysis is based only on observations.
