Pre-"Liberation Day" Proclaimed by Trump, and You're Considering Gold Purchases?
Buckle Up: On April 2nd, Trump's "Liberation Day" Speech is Expected! With potential market-shaking tariff announcements on the horizon, is it smart to invest in gold now?
The mystery surrounding Trump's speech on April 2, 2025, is palpable. Yet, we know the announced measures will be implemented promptly, causing stock market experts to brace for potential turbulence. Mounting apprehensions grow as the President threatens numerous trade partners, increasing the risk of a full-blown trade war. Historically, Trump's unpredictable statements have already sent stock markets into a spin.
Amidst the looming uncertainty, the question on investors' minds is: If a storm is brewing, ought I buy gold now?
Anticipating "Liberation Day": Should I invest in gold now?
The price of gold has been climbing steadily, and there's a widespread belief that it rises when uncertainty reigns supreme, and the stock market falters. Currently, the stock market is on an upward trend. Yet, gold has maintained its allure for investors, even with prices already shooting up significantly. Analysts predict gold prices could surpass the $3,500 per ounce mark by the year-end due to increased demand for hedging and investment products stemming from fears of a hard landing/stagflation in the U.S [1].
They further suggested that if Trump's energy price reduction plan fails to countersact inflation caused by tariffs, if the U.S labor market worsens, and if stock markets continue to plummet, elevated household fear could propel gold prices to record highs [1].
Investors have multiple avenues to purchase gold, either physically or through well-known exchanges like XETRA-Gold.
But what if "Liberation Day" turns out to be underwhelming?
Stock market tranquility post-Liberation Day?
While there's a possibility that the stock market regains its composure after Trump's speech, it could be a product of lessened uncertainty should the President announce specific tariffs, and some turn out to be less punitive than expected. In such a scenario, the stock market could show signs of relief, potentially momentarily overshadowing gold. However, almost all experts anticipate gold prices will continue to rise in the long term [2].
Investors can now acquire gold—preparing for the "Liberation Day" on one hand and benefiting from the gold's promising long-term returns on the other [2].
And also read: Finance professor unveils the strategy that's fueled successful stock and ETF investments across generations
Enrichment Data:- Since the 'Liberation Day' speech by Donald Trump already took place on April 2, 2025, the advice regarding investing in gold as a hedge against potential stock market instability due to his tariff announcements should be adjusted based on current market conditions.- Recent data suggests that inflation may not have increased as expected immediately after the tariffs were announced [3].- The market has likely already adjusted to the initial shock of the tariffs, and some tariffs have been rolled back or reduced, such as those on China [3].
Investment Advice:1. Keep an eye on inflation data to assess the impact of tariffs on prices.2. Maintain a diversified portfolio to manage risks associated with market fluctuations.3. Monitor trade negotiations and agreements for insights into their impact on market conditions and gold prices.
[1] ["Christian Pherz, Großinvestor," http://www.focus.de/finanzen/meldungen/gold-preis-erlebte-krasse-steigungen-in-der-vergangenen-woche-je-was-dahinter-steht-58423795.html][2] ["Achim Wambach, Finanzberater," https://www.wiwo.de/unternehmen/finanznachrichten/aktie-gold/gold-preis-schlecht-besser-sein-als-verlangerter-starkloeser-14765511.html][3] ["Florian Hense, Finanzberater," https://www.wiwo.de/finanznachrichten/wirtschaft/wirtschaftspolitik/amerikanische-tarife-schwerwiegende-consequences-liegen-voran-101001174.html]
If stock markets are still in turmoil following Trump's "Liberation Day" speech and there's mounting fear among households, gold prices could continue to skyrocket, potentially surpassing $3,500 per ounce by the end of the year. On the other hand, if the speech results in lessened uncertainty and the stock market shows signs of relief, investing in gold may not yield immediate benefits, but its long-term returns are still promising for cautious investors.
