Trump’s return to the White House has triggered significant shifts in the financial markets. Unlike Biden, who has decades of political experience, Trump’s strong personality and business background mean this new cycle will be vastly different from the past. Under Biden’s leadership, policies were relatively traditional and outwardly moderate, often relying on allies and teams to implement strategies collaboratively. Economic stimulation primarily depended on government money printing while tightening financial and business regulations. Trump, however, adopts a completely different approach. Since taking office, he has issued about 100 executive orders, ranging from exiting the Paris Agreement and the World Health Organization to revising immigration policies, all of which have had immediate market impacts.
Tariff Policies
Initially, markets expected Trump to significantly raise tariffs on non-U.S. countries upon taking office. However, on his first day, his actions were relatively restrained, causing the dollar to soften, non-U.S. currencies to rebound slightly, and gold prices to receive support. However, Trump announced plans to impose a 25% tariff on Canada and Mexico and a 10% tariff on China starting February 1. The uncertainty surrounding tariff policies suggests that the dollar’s weakness might only be a short-term phenomenon, and future volatility in both the dollar and gold prices could be significant. Watch closely for Trump’s new statements on tariffs and the responses from other countries, especially the trade report on April 1.
Energy Policies
Trump has proposed rolling back some of Biden’s environmental regulations and increasing oil, energy, and natural gas production. This announcement has put downward pressure on oil prices. Additionally, he plans to ask the EU and other allies to purchase more U.S. energy in exchange for exemptions from tariff measures. While Republicans are traditionally seen as supportive of oil prices, this time may be different. A sharp drop in oil and commodity prices could also weigh on gold, making this a critical area to monitor.
Economic Stimulus
Trump announced a massive $3.9 trillion AI infrastructure plan, which injected optimism into the U.S. stock market. Furthermore, his discussions on tax cuts, deregulation, easing restrictions on corporate buybacks, and loosening regulations in virtual markets are expected to bolster U.S. equities. A strong U.S. stock market often provides indirect support to gold prices through the wealth effect, making this an essential factor to consider.
Federal Reserve and Dollar Policy
The market expects Trump to reform the Federal Reserve and possibly alter the U.S. dollar reserve system. His team’s stance on dollar policy, fiscal reserves, and the budget will directly impact gold prices. If reforms aim to create room for rate cuts, they could trigger a dollar crisis and drive gold prices higher. Conversely, if reforms focus on maintaining a strong dollar, gold prices might come under pressure.
Geopolitical Developments
Trump is expected to propose peace initiatives for the Middle East and the Russia-Ukraine conflict, possibly involving U.S. military actions or imposing strong economic sanctions. His interest in the Panama Canal and territories like Greenland and Canada also warrants close attention. Geopolitical tensions have always been a core driver of gold’s value as a safe-haven asset.
Trump’s Unique Market Rhythm
Looking at Trump’s previous term and his recent actions, he has a unique rhythm. As someone who enjoys being the center of media attention, he is likely to introduce daily themes, particularly during the U.S. market opening hours, often launching new initiatives, opinions, or actions that fuel short-term market speculation.
Outlook for the Coming Cycle
In the initial stages, Trump will likely focus on targeting Biden and the Democrats. By the second quarter, he may shift attention to negotiating tariffs and trade policies to boost his popularity. Major fiscal policies are expected to be revealed during the State of the Union address. These focal points will significantly influence market behavior.
Advice for Investors
For everyday investors, the market rhythm under Trump is markedly different from Biden’s tenure. In this new cycle, relying solely on Federal Reserve policies, inflation, and employment data to make trading decisions is no longer sufficient. Investors need to closely follow Trump’s and his team’s speeches during U.S. market opening hours, as well as monitor the gap between market expectations and reality. Additionally, keeping an eye on mainstream U.S. media interviews with Trump and his social media updates is crucial, as they often contain key market opportunities.
Tariff Policies
Initially, markets expected Trump to significantly raise tariffs on non-U.S. countries upon taking office. However, on his first day, his actions were relatively restrained, causing the dollar to soften, non-U.S. currencies to rebound slightly, and gold prices to receive support. However, Trump announced plans to impose a 25% tariff on Canada and Mexico and a 10% tariff on China starting February 1. The uncertainty surrounding tariff policies suggests that the dollar’s weakness might only be a short-term phenomenon, and future volatility in both the dollar and gold prices could be significant. Watch closely for Trump’s new statements on tariffs and the responses from other countries, especially the trade report on April 1.
Energy Policies
Trump has proposed rolling back some of Biden’s environmental regulations and increasing oil, energy, and natural gas production. This announcement has put downward pressure on oil prices. Additionally, he plans to ask the EU and other allies to purchase more U.S. energy in exchange for exemptions from tariff measures. While Republicans are traditionally seen as supportive of oil prices, this time may be different. A sharp drop in oil and commodity prices could also weigh on gold, making this a critical area to monitor.
Economic Stimulus
Trump announced a massive $3.9 trillion AI infrastructure plan, which injected optimism into the U.S. stock market. Furthermore, his discussions on tax cuts, deregulation, easing restrictions on corporate buybacks, and loosening regulations in virtual markets are expected to bolster U.S. equities. A strong U.S. stock market often provides indirect support to gold prices through the wealth effect, making this an essential factor to consider.
Federal Reserve and Dollar Policy
The market expects Trump to reform the Federal Reserve and possibly alter the U.S. dollar reserve system. His team’s stance on dollar policy, fiscal reserves, and the budget will directly impact gold prices. If reforms aim to create room for rate cuts, they could trigger a dollar crisis and drive gold prices higher. Conversely, if reforms focus on maintaining a strong dollar, gold prices might come under pressure.
Geopolitical Developments
Trump is expected to propose peace initiatives for the Middle East and the Russia-Ukraine conflict, possibly involving U.S. military actions or imposing strong economic sanctions. His interest in the Panama Canal and territories like Greenland and Canada also warrants close attention. Geopolitical tensions have always been a core driver of gold’s value as a safe-haven asset.
Trump’s Unique Market Rhythm
Looking at Trump’s previous term and his recent actions, he has a unique rhythm. As someone who enjoys being the center of media attention, he is likely to introduce daily themes, particularly during the U.S. market opening hours, often launching new initiatives, opinions, or actions that fuel short-term market speculation.
Outlook for the Coming Cycle
In the initial stages, Trump will likely focus on targeting Biden and the Democrats. By the second quarter, he may shift attention to negotiating tariffs and trade policies to boost his popularity. Major fiscal policies are expected to be revealed during the State of the Union address. These focal points will significantly influence market behavior.
Advice for Investors
For everyday investors, the market rhythm under Trump is markedly different from Biden’s tenure. In this new cycle, relying solely on Federal Reserve policies, inflation, and employment data to make trading decisions is no longer sufficient. Investors need to closely follow Trump’s and his team’s speeches during U.S. market opening hours, as well as monitor the gap between market expectations and reality. Additionally, keeping an eye on mainstream U.S. media interviews with Trump and his social media updates is crucial, as they often contain key market opportunities.
