How Trump 2.0 will impact gold rates in 2025

Donald Trump's re-entry into the White House may escalate the global trade war, working as fodder for the geopolitical crisis and escalating gold prices

Gold delivered a return of around 21% year-to-date, leaving the Nifty 50, BSE Sensex, and Bank Nifty far behind and also beating inflation by a large margin, according to a Mint report.

A gold statue of Donald Trump on display at the Conservative Political Action Conference held in the Hyatt Regency on February 26, 2021 in Orlando, Florida. (AFP)

This brings in the question of how gold will perform with Republican candidate Donald Trump having won the US elections, since geopolitical tensions were largely behind the rise in gold prices in 2024 as it became viewed as a safer asset class.

Trump's re-entry into the White House is also expected to escalate the trade war, working as fodder for the geopolitical crisis, according to the report.

“Trade tensions, potential conflicts, and unpredictable policies under his leadership might drive investors toward gold as a safe-haven asset,” the report quoted the MD of RiddiSiddhi Bullions Limited as saying.

“During Trump 2.0, especially in the first year of his second tenure, the stock market is expected to receive various hits due to the geopolitical tension," the report quoted Anuj Gupta, Head of Commodity & Currency at HDFC Securities, as saying. “In such conditions, gold prices normally rise.”

However, this rise will be limited since the US dollar rates won't cool down much, he added.

The Nifty 50, BSE Sensex and Bank Nifty in 2025 will also face tough challenges from US Treasury yields, US dollar, and virtual assets like Bitcoins, he said.

How will gold rates be in 2025?

Gupta predicts that “in the short-term, the MCX gold rate faces resistance at ₹76,800 per 10 gm level. On breaching above this hurdle, the yellow metal may touch the ₹78,000 mark.”