Trump, Fear, Precious Metals & the Stock Market

The general agreement is that the Trump presidency is good for the precious metals. Many believe the boost in precious metals prices will come from what traditionally causes the price of precious metals to rise – it is viewed as a safe haven investment in times of uncertainty. I think everyone will agree that is what the first three weeks of the Trump presidency have been largely about is uncertainty. This article from discusses some of the sources of that uncertainty and how the market is viewing it:

Trump, Fear and the Stock Market

There are others analysts who say the rise in precious metals over the coming year will come from inflation as Trump’s spending on infrastructure projects boost demand and increases inflation.

Precious metals traditionally move inversely to the dollar. Again Trump policies may boost Precious Metals prices. He has complained on his twitter feed that the strong dollar has hurt the United States balance of trade by making US goods more expensive. He has vowed that he will fix that problem. Is the fix he is proposing weakening the US dollar? If that is Trump’s plan, and the precious metals follow their traditional path and move inversely to the dollar, a weakening dollar will mean rising precious metals prices.

But since so many of the details of Trump’s proposed policies are lacking that means uncertainty in how they will affect the stock market. For many that means the safe harbor of precious metals is becoming more and more attractive.

The best answer that I’ve heard to the question of “What’s the best time for precious metals investing?” was “the long time.” Especially since the silver precious metals market and precious metals relatively speaking are much smaller markets than the stock market or some of the commodities markets. Because the precious metals markets are smaller they are more easily buffeted by news, events and emotions. But those short term squalls really don’t affect the long term upward trajectory of the precious metals. Of course there have been some dips but when you look at the past 11 year march upward and marry it with the current uncertainty and/or inflation projections for the future it seems the precious metals future is bright.

Whether the rise comes from future uncertainty or inflation the news is good for precious metals. I believe the increase in precious metals prices this year has just started and prices will continue their upward path this year.

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