MAD Macro - Golden Tariffs, MGGA
Cathie, Is Gold a Hedge Against Tariffs?
Cleopatra, the OG Gold Influencer
Trump is Making Gold Great Again (MGGA). It looks like gold is the hedge against the Trump Tariff Tantrum. I think we knew Trump 2.0 was going to be a wild amusement park ride, but it might be more than anyone expected. The tariff fight with China continues to heat up and gold keeps making new all-time highs. Central banks have been the biggest gold buyers over the last couple of years. In fact, Western investment demand has been almost nonexistent. Trump might be MGGA. Trump’s unpredictability might trigger a surge in Western demand. Gold has been a store-of-value asset since Cleopatra became the OG gold influencer in 51 BC. If gold starts to attract Western investment demand, it could go a lot higher. Also, if Western investment demand picks up the gold miners should start to outperform the commodity by a wide margin. If gold does rally sharply from here, Scott Bessent will have his U.S. sovereign wealth fund, Ft Knox. Michael Saylor wants Scott to sell the gold in Ft Knox and buy bitcoin. But if Trump MGGA, why do the trade?
Apparently, Trump, the real estate developer, sees a deal. He can evict the Palestinians from Gaza and Make Gaza Great Again (MGGA). Trump will save on the teardown costs in Gaza. Bibi took care of the demolition. Relocating two million Palestinians should be easy after he is done relocating the ten million illegal immigrants in the U.S. Just think of all the big beautiful buildings on the Gaza coast, all of them with big golden Trump signs on them. What will he think of next?
Markets are a little lower this morning on Google’s earnings report. Apparently, investors think they are spending too much on AI investments. It’s understandable, DeepSeek spent $6 million and Google is planning to spend $75 billion this year to do the same thing.
I updated the U.S. Dollar Index, U.S. 10yr yield, U.S. 10yr-2yr yield spread, WTI crude oil, NY copper, spot gold, NYSE Arca Gold Miners Index, bitcoin, MicroStrategy, S&P futures, NASDAQ 99 futures and DOW futures charts below.
The dollar and interest rates are lower. The curve is a little flatter.
Crude oil is lower and copper is unchanged. Gold is making new all-time highs again this morning. The NYSE Arca Gold Miners Index should open higher with gold prices. Bitcoin is a little lower and MicroStrategy should open lower with bitcoin prices.
S&P and NASDAQ 99 futures are lower on the Google report. The DOW is unchanged.
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S&P 500 futures are a type of derivative contract that provides a buyer with an investment priced based on the expectation of the S&P 500 Index’s future value. Nasdaq 100 futures are commodities futures products traded within the equity futures sector. West Texas Intermediate (WTI) oil is a benchmark used by oil markets, representing oil produced in the U.S. Brent Crude Oil is a blend of crude oil recovered from the North Sea in the early 1960s, whose price is used as a benchmark for the commodity's prices. The U.S. dollar index (USDX) is a measure of the value of the U.S. dollar relative to the value of a basket of currencies of the majority of the U.S.'s most significant trading partners. UBS Bloomberg Constant Maturity Commodity Index is a total return rules-based composite benchmark index diversified across commodity components from within specific sectors. Index performance is not illustrative of fund performance. It is not possible to invest directly in an index.
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