Trump’s Weaker Dollar Lifts Gold and Bitcoin Higher

The US dollar has been struggling again in recent months, prompting established figures such as investor Ray Dalio and analyst Peter Brandt to call for fresh investment in gold and Bitcoin, with US government debt expected to keep rising in the months ahead.

Bessent

US Treasury Secretary Scott Bessent, a fervent Trump supporter, announced last week that his department wants to buy back more long-dated government bonds in order to support the domestic economy. That economy is under severe pressure as government debt expands markedly.

President Trump is facing a weakening economy, higher government spending (not least because of his months-long war in Iran) and, as a result, a weaker dollar.

Since he can only win the midterms if the economy improves somewhat in the coming months, analysts expect Trump to increase spending further.

All of this is highly positive for gold and Bitcoin, both of which are seen as scarce assets and therefore unlikely to fall in value. Their appeal as a hedge against rising inflation has been confirmed in recent weeks as the two have moved higher in tandem.

Whether this trend continues depends on the future path of US interest rates, inflation data and the state of government finances.

But one message is once again growing louder in the financial markets: when confidence in paper money fades, scarce assets become more attractive. In the current market, gold and Bitcoin are the clear winners.