Miningweb - Matthew A. Winkler: Trump chaos sends gold soaring - ignore it at your risk

Key topics:Trump’s second term fuels chaos, shaking markets and the US dollar.Gold soars 64% as central banks boost reserves amid instability.Semiconductors and defense stocks outperform US equities in 2025. .Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Matthew A. Winkler.When he ran for president in 2016, former Florida Governor Jeb Bush said Donald Trump Is “a chaos candidate” who will be “a chaos president.” Bush was prescient. Yet what we didn’t know at the time was that the turmoil unleashed during Trump’s first term leading the US from 2017 through 2020 would be just a preview of the chaos that has marked his year-old second term.For global financial markets, dealing with chaos means turning to gold, identified throughout history as protection against political instability, unbridled inflation and currency depreciation.Sure enough, after Trump imposed the highest tariff rates since the Great Depression in April on every country that trades with America, violating the Constitution's separation of powers, betraying steadfast ally Canada and prompting the dollar to depreciate more than 9% in its worst year since his initial White House term all while attacking the independence of the most important financial institution anywhere – the Federal Reserve – gold vanquished stocks, bonds and currencies the world over..Read more:.Miningweb: Gold, silver soar to records amid Trump’s Greenland tariff threats.In 2025 — Trump's second first year in the newly-gilded Oval Office - gold soared 64%. In the recent history of the yellow metal, its performance was exceeded only by the 127% gain in 1979 when the Soviet Union invaded Afghanistan under Leonid Brezhnev, the General Secretary of the Communist Party. No stock market came close to matching that performance, least of all those in the US. Corporate America, for the first time since 2017, became an also-ran relative to the rest of the world, according to data compiled by Bloomberg. So although the MSCI USA Index jumped 16.3%, it lagged far behind the 29.2% rally in the MSCI All-Country World Index excluding America. Returns on US bonds of all types also fell below their global peers. As for the dollar, it depreciated against all the world’s 16 most-traded currencies as tracked by Bloomberg..To fully understand gold’s appeal, it’s important to note what else was happening at the end of the 1970s besides the Soviet Union’s invasion of Afghanistan. Back then, the Consumer Price Index surged 13.3%, the most since 1947. A revolution ended the reign of the US-backed shah in Iran and made Ayatollah Khomeini supreme ruler of the Islamic Republic. The ensuing Iran hostage crisis shook the world as US Embassy personnel were taken hostage in Tehran. The Sino-Vietnamese War between China and Vietnam raged and the Sandinista Revolution led to the overthrow of the Somoza regime in Nicaragua.In many ways, the geopolitical upheaval seen around the world now is similar to those turbulent days of the late 1970s with one big exception: most of it originates from the White House. That helps explain why gold in 2025 reaped 48 percentage points more than the benchmark S&P 500 Index of US stocks, according to data compiled by Bloomberg. The last time gold was so precious was 2008 during the global financial crisis and before that in 2002 following the dot-com bust and Enron Corp., the largest bankruptcy and biggest audit failure in US history.The greenback’s 9.4% depreciation in 2025 as measured by the US Dollar Index was the most since it lost 9.9% in 2017 at the start of Trump's first term. It depreciated 13% in 2002 and 15% in 2003 when George W. Bush occupied the White House and led the US into a disastrous war in Iraq..Where is demand for gold coming from? At least half a dozen central banks stepped up their purchases despite the rally in 2025, data compiled by Bloomberg show. The National Bank of Poland was the most active, buying gold every month last year and boosting its holdings to 17.5 million ounces (543.5 tons) in November from 14.5 million ounces in January, according to the Polish Press Agency. Poland was the second-largest purchaser globally in 2025, with gold accounting for 24% of the central bank’s foreign-exchange reserves at the end of September.The National Bank of Kazakhstan was the largest buyer among central banks during the third quarter, increasing its gold reserves by 18 tons. That made it the largest purchaser for the year after Poland. The Central Bank of Iran increased its gold reserves by 37% during the year as it dealt with global sanctions on its economy and its currency depreciated. The Czech National Bank held a record 63.6 tons of gold at the end of July, a 25% increase since 2024. Central banks of the UAE, China, Ghana and Kenya increased their holdings as much as 40% in 2025, according to data compiled by Bloomberg.Beyond gold, it’s notable that the shares of companies that deal in semiconductors and defense were big gainers in 2025 as well. The VanEck Semiconductor exchange-traded index fund produced a 49.2% total return (income plus appreciation), the best among the 453 US-based mutual funds and ETFs investing in domestic equities with a minimum of $5 billion of assets and five years of history, according to data compiled by Bloomberg. The iShares US Aerospace & Defense ETF was the runner-up, returning 48.6%..Their performance is no coincidence when you consider the persistent confusion under the 47th president, starting with his deference to Vladimir Putin in Russia's war against Ukraine, Trump's self-described takeover of Venezuela after kidnapping President Nicolas Maduro Moros and his wife, the verbal attacks on the Fed, including the newly revealed Department of Justice criminal investigation of Chair Jerome Powell, Trump's ongoing threats to seize Greenland in contravention of the North Atlantic Treaty Organization. Then there’s the deployment of National Guard troops and Department of Homeland Security ICE forces into American cities and going door-to-door harassing, jailing and killing American citizens in the pursuit of undocumented immigrants..Read more:.Gold eyes fresh record highs in 2026 after stunning 64% rally in 2025.With all this chaos, the rally in gold shows no signs of losing its vigor. And at least Trump is doing his part to keep the momentum going, happily accepting as a gift the 24-carat gold plated medallion representing the Nobel Peace Prize from last year’s winner, Venezuelan opposition leader Marina Corina Machado. .© 2026 Bloomberg L.P.

Miningweb - Matthew A. Winkler: Trump chaos sends gold soaring - ignore it at your risk

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