“Big, Beautiful” Bill Makes Gold Shine
Donald Trump has drafted a new policy bill that looks set to be passed by the US Congress soon. The bill aims to revive his economic agenda from his first term, focusing on tax cuts, deregulation, and boosting military spending and border security.
President Donald Trump’s latest tax bill, known as the “One Big Beautiful Bill,” has had a significant impact on gold prices. Since the announcement and debate over the bill, gold prices have surged, hitting more than $3,300 an ounce, the highest in more than a week.
Factors Driving Gold Prices Up
1. US Fiscal Uncertainty
The bill is expected to add between $3 trillion and $5 trillion to the national debt over the next decade, increasing the debt-to-GDP ratio to 134% by 2035. This uncertainty is driving investors to seek safe haven assets such as gold. 2. US Dollar Weakening
The US dollar weakened to its lowest level since May 7, 2025, making gold more attractive to investors using other currencies.
3. Inflation Concerns
A large tax cut without a commensurate reduction in spending could widen the budget deficit, potentially fueling inflation. Gold is often used as a hedge against inflation.
4. Political Uncertainty
Internal debates within the Republican Party over the bill have added to political uncertainty, driving demand for safe haven assets such as gold.
Prominent investors such as David Einhorn also predict that gold prices will continue to rise, not because of inflation per se, but because of declining confidence in US fiscal and monetary policy. His hedge fund, Greenlight Capital, has made significant gains thanks to the surge in gold prices.
For short and medium term movements, gold prices are predicted to get a boost if this bill is passed, while for the long term, this bill has changed direction and is predicted to rise again with Goldman Sachs: Estimating gold prices will reach $3,700 per ounce by the end of 2025, with the potential to rise to $4,500 in a recession scenario or increased geopolitical tensions.
While JP Morgan: Projects gold prices to average $3,675 per ounce in the fourth quarter of 2025, with the possibility of breaking through $4,000 in mid-2026 if recession concerns continue.
Source: (mrv@Newsmaker)
