JP Morgan’s $4 Billion Gamble on Gold: Should You Invest During Trump’s Presidency?
In early February, J.P. Morgan announced the unusual step of importing $4 billion of gold bullion from London into the U.S. It rarely makes sense to physically move that much gold, because it’s so heavy and expensive to fly. But J.P. Morgan — the world’s largest bullion dealer — clearly has their reasons.
To begin with, the announcement came on the heels of tariff announcements by President Donald Trump. But the numbers also added up: New York gold futures shot up past the spot prices in the London Bullion Market. That made it affordable to physically fly the gold across the Atlantic, a rare phenomenon.
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J.P. Morgan is hardly alone in bulking up their gold position, however. Investors have snatched up gold since Trump won the presidential election, causing it to jump roughly 10% in price in just two and a half months.
Why have investors flocked to gold? Should you move money into it, too?
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Tariff and Inflation Concerns
Tariffs tend to drive up the price of imported goods. Read: Inflation.
“Since President Trump came into office, his broad use of tariffs to extract trade concessions has raised concerns about inflation,” explained David Weild, chairman of Dignity Gold.
When prices go up in general, so do gold prices, broadly speaking. That leads many investors to see gold as a hedge against inflation.
“If inflation causes the U.S. dollar to decrease in value relative to other currencies, in dollar terms gold will rise in value,” Weild continued. “In fact, some economists believe President Trump intentionally wants inflation, because it would lower the price of American exports and make them more competitive internationally.”
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Geopolitical Risk
Even more than a hedge against inflation, many investors view gold as a safe haven during geopolitical upheaval. Ben Nadelstein of Monetary Metals noted that gold has stood the test of time.
“Gold has survived every political regime and monetary experiment thrown at it,” Nadelstein said.
Some investors see Trump’s tariffs as the opening salvo in a series of trade wars, with plenty of geopolitical risk on the horizon.
Trade wars come and go, currencies rise and fall in purchasing power, but gold continues storing value for investors after millennia.
Risk of De-Dollarization
Many countries and companies store much of their capital in U.S. dollars as a reserve currency. It has allowed the U.S. dollar to remain dominant over the last century, and has created stability in global financial markets.
So what happens if the rest of the world stops playing by the dollar’s rules? It could cause a collapse in the value of the dollar — but not the value of gold.
“Sure, gold looks expensive right now,” noted Bryan M. Kuderna, certified financial plannre (CFP) and founder of the Kuderna Financial Team. “But when you look at investors’ fear of more tariffs, of an escalated trade war, and de-dollarization, and a stock market correction, gold looks like a great hedge against these concerns.”
Possibility of Income
Historically, precious metals like gold and silver have not generated income for their investors.
New approaches to putting gold to work have started to change that. Monetary Metals lets investors lease their gold to vetted businesses who use it in the course of their operations, such as jewelers.
“Retail investors can generate passive income with their gold holdings, while they wait to see how Trump’s policies affect their finances,” continued Nadelstein. “It’s a win-win: Investors can own gold to reduce their financial uncertainty while earning income at the same time, which makes a stronger case for holding more gold in 2025.”
The Case Against Gold
Yes, gold can hedge against inflation and geopolitical risk, and perhaps even earn you some interest income. But like every investment, it comes with risk.
“Gold is up 45% over the past year and 79% since 2020, but before diving in headfirst, investors should remember the 2010s,” observed Kuderna. “Gold effectively delivered a total 0% return from 2010 to 2020 compared to a bull market in equities.”
Financial planner Scott Sturgeon of Oread Wealth expands on gold’s limitations.
“Gold has no intrinsic value. Its value is simply whatever the next person is willing to pay for it,” Sturgeon explained. “Unlike stocks or real estate, a piece of metal on its own doesn’t generate revenue, create jobs, expand into new lines of business, or provide shelter.”
The Bottom Line
Like the stock market and cryptocurrencies, gold has spent 2025 hovering around all-time highs. Are some of them due for a correction?
Only time will tell.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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