Trump is the world's best gold salesman, and miners are surging in response

Gold stocks are emerging as 2025's hottest trade on the cash is trash theme, rate cuts and signs the US Fed is lessening its commitment to a 2% inflation target.

The miners' rally is a symptom of the world's best gold salesman in the White House, who wants to stack the Fed with doves, take rates to 1%, run fiscal deficits near 8%, widen a split with China, and extend an inflationary tariff war. 

But perhaps the most fascinating point about the gold sector is that investment banks' forecasters and the market still expect prices to decline out to 2030. 

Check out the below chart from the highly-respected team at UBS. It shows consensus forecasts (brown line) have spot gold prices falling below $US3,000 an ounce in late 2026, before extending a decline through to 2030.

These forecasts are quite influential on how the market values listed gold miners and many still trade on modest profit multiples, which reflect expectations for the precious metal's price to soften. 

Still, I don't agree with the market's consensus and expect gold prices to climb through to 2028 to present a money making opportunity. 

Trump is gold's star salesman

The first point to make is the US Trump executive wants to stack the Fed's board with rate doves, and will likely select a new chairman that shares Trump's stated view that interest rates should fall to 1%. 

On Friday, ratings agencies Fitch came out with its latest forecasts for US fiscal deficits in 2026 and 2027. 

They're eye-poppingly high. Fitch now sees US govt deficits reaching 7.8% of GDP in 2026 and 7.9% of GDP in 2027, largely because of Trump's One Big Beautiful Bill that extends unfunded spending and tax cuts. 

If the Fed cuts rates into crazy deficit spending and associated debt accumulation it seems obvious gold goes higher. This is before we consider Jerome Powell's Jackson Hole speech last Friday where it was widely considered he hinted that 2% inflation is less of a priority now for the central bank. 

Compare all this to consensus market forecasts for gold to average $US2,884 an ounce in 2027, versus today's spot price of $US3360 an ounce. And note that the bearish pricing is still factored into a lot of analysts' models about the value of listed gold miners. 

As a guide to the recent rally, shares in ASX-listed Newmont (ASX: NEM) have rocketed 81.5% year to date to a $120 billion market cap. While West Australia-based Evolution Mining (ASX: EVN) is up 70% in 2025, Genesis Minerals (ASX: GMD) has added 72% and Vault Minerals (ASX: VAU) 53% as gold tops the leaderboard. Gold was also Australia's third most valuable commodity export in July. 

Gold versus US paper

Gold prices are also difficult to manipulate and traditional buyers of US sovereign paper (debt) such as China are significantly reducing holdings of it to rotate into gold. 

This is another big shift in global capital flows I expect to extend. Largely due to Trump's backwards economics also known as 'tariff wars' and because his egotistic policy to run the "world's hottest economy" means the value of its sovereign paper that promises future cashflows is eroded. 

As a slight digression, the only government increasing its holdings of US debt is the economically illiterate UK Labour Party!

Elsewhere, the Russia / Ukraine war has accelerated a geopolitical split and decoupled the gold price's traditionally inverse correlation to real US rates, as gold went higher in tandem with real rates after the invasion. 

Finally, it's worth noting Trump is a real estate billionaire who's basic business philosophy is to use low borrowing rates, debt, and a showman style to deliver economic "success". 

The salesman's own family and financial donors are already jumping into the crypto lifeboats to shelter from the inflationary growth policies that trash the US dollar's real value. 

So, I reckon the market is undercooking the gold price ahead. However, please note commodity prices are notoriously difficult to forecast. These are my views and not be taken as investment advice. It's definitely possible the more bearish views are on the money, or you lose your shirt, if you buy gold stocks today. Thank you for your attention to this matter.