- The price of gold is on its way to new all-time-highs, according to a commodities analyst.
- CPM Group's Jeffrey Christian thinks investors will flock to safe-haven assets as Trump's term kicks off.
- That means gold could climb to a cyclical peak before 2026, he said in a recent presentation.
The price of gold has sagged since Donald Trump secured his election win, but major uncertainty surrounding Trump's second-term means the precious metal is on its way to fresh highs, according to one commodities expert.
Jeffrey Christian, a longtime commodities analyst and the founder of CPM Group, forecast the price of gold reaching a record-high by the end of January. Gold could then plateau for several months, and then rally to a cyclical peak by 2026, he speculated in a recent presentation to clients, implying multiple record highs for the precious metal during Trump's first year in office.
The rally will be driven by a high amount of uncertainty swirling around the President-elect's policies, which will cause investors to flock to gold, silver, US Treasuries, and other defensive assets for safety, Christian said.
Gold traded around $2,649 mid-day Wednesday, around 4% lower since Election Day. That decline, though, is likely due to profit-taking among investors, who cashed in when gold hit an all-time-high in late October, he added.
"There are internal inconsistencies in what's being said, and it's not at all clear what can be done," Christian said of Trump's proposed policies. "That opens up an entirely new set of uncertainties that are going to cause investors to pause, and when they're uncertain and when they're concerned about where the economies are going, they buy the US dollar, they buy US Treasuries, they buy gold, and they buy silver."
Economists have noted that the impact of some of Trump's economic policies could achieve the opposite of what Trump has said he aims to do. For instance, experts have described Trump's plan to levy steep tariffs on imports as inflationary, a point Trump has pushed back on. He implemented tariffs during his first term in 2017 without a significant inflation increase, but economists say that his new tariff plan is far more sweeping, explaining the difference in inflation forecasts.
Christian noted that CPM Group was sticking to its forecast that the economy could see a recession within the next 24 months. A downturn could come even sooner or become more serious if Trump's economic policies are particularly contractionary, he added.
"The comments that have been made by president-elect Trump and his associates are internally inconsistent," Christian said. "You can take some of the things they've been saying, and say they are going to be extremely contractionary, they're going to slash the budget, slash government spending, and that could accelerate — bring forward, and make deeper — a recession."
Most economists, though, still see the US on track for a soft-landing, as inflation trends closer to the Fed's 2% target while economic growth remains solid. Inflation rose 2.6% in October, in-line with economists' expectations. Real GDP, meanwhile, is expected to clock in at 2.6% in the fourth quarter, according to the latest Atlanta Fed GDPNow reading.