Americans have been watching what President Donald Trump does very closely. Recently, he has shot missiles into Syria and bombed Afghanistan. He has also made sweeping changes for different things in the country, which has impacted the economy.
President Trump Issues a Warning
The United States dollar is one hallmark that affects the price of gold. Recently, President Donald Trump remarked that the strength of the U.S. dollar is getting too high. He says the change is because people have confidence in him. As the U.S. dollar strengthens, the economy also gets stronger. But, President Trump had a stern warning for people that the rapid increase in USD strength could spell trouble.
President Trump’s warning didn’t go unheeded. The dollar’s value dropped by .07 percent since the statement by President Trump. This is good news and bad news for investors, depending on what holdings are in a portfolio. For gold holders, this is almost certainly good news because the price of gold likely won’t falter due to the dip in the dollar.
Interest Rate Debacle
When the U.S. Fed recently raised the interest rate, President Trump expressed his pleasure. He is now rethinking that statement and has recently noted that he is going to ask that the Fed leave interest rates alone for a bit. This could help the price of gold since it tends to slip when the Fed raises the interest rate.
As the dollar strengthens, the price of gold drops. As interest rates increase, the price of gold drops as well. A strengthening economy in the U.S. can also make the price of gold increase due to the upswing in investor comfort. Which of these happens can vary greatly depending on other factors around the world.
Investors should keep an eye on what is going on the United States as this will have a significant impact on gold investments. Overall, gold is expected to stay fairly stable in the coming months. This might change if President Trump’s request to keep interest rates stable for the time being is honored by the Fed. Still, investors should monitor the situation to decide how they are going to handle their gold investments.
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