Why Trump is sending gold stocks higher with potential to soar through 2026

Last week I wrote how Donald Trump is emerging as the world's best gold salesman and miners of the precious metal are dominating the market's leaderboard again on Monday.

Sticking to this theme, let's consider how Trump is like a drunken captain sailing a ship onto some economic rocks, and it doesn't matter how many sailors among his crew are clapping him along.

First, check out some of today's moves among the miners, Northern Star (ASX: NST) is up 3.2% to $19.50, Perseus Mining (ASX: PRU) is up 3.2% to $3.90, Evolution Mining (ASX: EVN) is up 3.3% to $8.95, and Capricorn Metals (ASX: CMM) is up 5.7% to $10.81. 

The above is just a daily snippet of huge gains across a gold sector that's been the easiest place to make big money in 2025. 

Nearly all the miners have now soared 60% to 100% this year as the gold price climbed to $US3,457 an ounce on Monday. The latest leg higher is on renewed worries the advanced-stage narcissist in the White House will seek to stack the US Fed with doves who take borrowing rates as low as 1%. 

Tariffs and deficits 

The bigger picture is that last week, ratings agency Fitch forecast the US government's deficit to rise to 7.8% of gross domestic product (GDP) in 2026, before climbing to 7.9% in 2027. 

On a back-of-the-envelope calculation, if we assume the market is correct in forecasting US GDP will climb around 1.7% in 2026 to $US31 trillion, we can see the Trump executive will run a deficit of $US2.4 trillion next year. Therefore, it's no surprise that the market is already sensing that the US dollar is going to lose value compared to gold.

"Government revenues will fall, driven by additional tax exemptions on tips and overtime, expanded deductions for state and local taxes (SALT), and additional deductions for people over 65 included in the OBBBA [Big, Beautiful Bill], despite the continued increases in tariff revenues, which Fitch expects to average USD300 billion in both years," Fitch told investors. 

Tariffs and trade wars

Another point to note is that most major investment and macro research houses that institutional investors follow are still telling their clients gold prices will likely decline through to 2030. 

I don't agree with this. Especially, given Trump's tariff policies now sees the US punish countries that sell it cheap goods and those same countries that also used to lend it money in return by buying its treasuries. 

Trump's tariff war is literally backward economic policy, and in response, much of the world is already rotating out of US treasuries into other safe havens, such as gold. 

Last week, several financial media sources reported that foreign central banks now hold more gold reserves than US treasuries for the first time since 1996. 

When you look at the ridiculous US deficits and its nonsense trade policies, it's not hard to see why the gold price is going higher. 

According to the World Gold Council, as of June 30, China, India, and Brazil were three of the top five holders of gold in terms of central bank reserves. 

This shows global faith in the worth of US sovereign paper is declining (especially at the long end), and Trump's adversarial approach is widening geopolitical splits. 

Gold and poisonous politics

I was never a fan of gold as an investment until the pandemic policies of free money turbocharged inflation and the collapse of fiat. 

These policies and cash handouts were enacted across the West, and even after the pandemic lockdowns, the Democratic Biden executive continued to run crazy deficits. 

This is perhaps because the Biden team concluded any form of economic sepukku or out-of-control spending was justified in trying to prevent electoral success for Trump in 2024. 

Today, though, we have a US government climate so poisonous that both sides repeatedly use the law in an attempt to have political opponents thrown in jail or removed from office.

Once the US reaches this Banana Republic status, you can see why both its political parties are seemingly prepared to run deficits that will lead the country onto the economic rocks.  

Of course, gold prices will climb in response, and if you want to get a bigger picture around the abnormal economic times we're living in, may I recommend one resource? 

A book titled Crashed, How a Decade of Financial Crisis Changed the World, by Adam Tooze, an English historian and economics professor at Columbia University. Even though the book was published just before the pandemic, it will still give anyone a sound perspective on the scale of the crazy policies we're living through.