Fiat money is becoming increasingly unpopular, and gold is becoming the only reliable store of value. Does this remind you of debasement trading? Or will the global economy eventually return to the gold standard? Let’s discuss this topic and make a trading plan.
The article covers the following subjects:
Major Takeaways
- Gold is a politically neutral asset.
- Trump is not solely responsible for the XAU/USD rally.
- The precious metal is drawing capital away from Bitcoin.
- Long trades on the XAU/USD can be opened with a target of $5,400.
Quarterly Fundamental Forecast for Gold
When the world order collapses, why not return to its previous state? The 17% rally in XAU/USD quotes since the beginning of 2026 and the 83% rally over the past 12 months resemble the revival of the gold standard. This system meant that the precious metal was the only way to preserve value, while paper money was widely despised. Debasement trading is yet another proof that some old things are still good.
The gold standard is undoubtedly a “barbarous relic,” but gold itself is a politically neutral asset. It protects against political turmoil. Indeed, the surge in the US economic policy uncertainty index to record highs allowed the XAU/USD to break through the psychologically important $5,000 mark. Donald Trump is a striking example, but he is not the only one. The rally in Japanese bond yields due to Sanae Takaichi’s plans to stimulate the economy echoes Liz Truss’s approach.
Gold Performance and US Economic Policy Uncertainty Index
Source: TradingView.
Eroding confidence in the US dollar and other currencies due to government policies is creating a solid foundation for a rally in gold. Investors are rushing to diversify their portfolios in favor of non-US assets. The amount of money involved is substantial. Money market fund reserves are estimated at $7.7 trillion. They are effective when interest rates are high. However, Donald Trump wants to trim them to 1%.
The situation recalls the story of former Fed Chairman Arthur Burns, who gave in to political pressure. His monetary policy easing turned into spiraling inflation, a double-dip recession, and a surge in inflation-adjusted gold prices to a historic peak in 1980. That record lasted 45 years! Only Donald Trump’s decision to replace the Fed chairman with his appointee allowed XAU/USD bulls to push the quotes higher to a new all-time high.
Gold is stealing money from other assets, primarily risky cryptocurrencies. Many link this to the decline in the cryptocurrency market’s volatility, while the precious metal’s volatility index has soared to its highest level since 2020.
Gold Volatility Index
Source: Bloomberg.
However, volatility is not the key factor. Bitcoin ceased to be a neutral asset after Donald Trump announced plans to turn America into the world’s crypto capital. The BTC/USD pair became dependent on the US leader’s decisions. Gold, on the other hand, protects investors from such risks.
How high can gold climb? The experience of the US stock market proves that even a fundamentally overvalued asset can grow. As long as the precious metal is seen as a hedge against Donald Trump’s policies, the upward trend will likely continue. Notably, Trump will remain in the president’s chair for three years.
Quarterly Trading Plan for XAUUSD
In such conditions, any pullbacks after reaching the target of $5,050 per ounce can be used to buy more gold, targeting $5,400.
This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.
Price chart of XAUUSD in real time mode
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