Gold shines on through the Bitcoin buzz

Bitcoin has been stealing the headlines lately, but there’s still plenty of smart money backing gold as we head towards Trump 2.0.

Pic via Getty Images

• Despite his new government department sharing the same name as a cryptocurrency, Trump’s presidency is also expected to be favourable for historical store of wealth – gold

• GraniteShares founder and CEO Will Rhind says inflationary pressures and central bank buying will continue to push up prices of the precious metal

• Rhind visited Australia this month to sign an exclusive deal giving moomoo Australia users direct access to GraniteShares ETFs

Even investors who aren’t Bitcoin bros are now talking about crypto as the new “digital gold”, but there’s still plenty of smart money backing the precious metal as we head towards Trump 2.0.

Goldman Sachs is forecasting the long-term hedge to hit US$3000 per ounce by the end of 2025, fuelled by inflationary fiscal policies and rate cuts that will discount the opportunity cost of holding gold.

After a short blip immediately following the election result, gold's strong return to investor favour has continued, with the price again back up near US$2700 per ounce at the time of writing.

Golden hedge

Will Rhind, CEO at GraniteShares – a global issuer of ETFs across precious metals, tech and crypto (so, far from an old-school gold bug, then) – is also bullish on the outlook for gold.

“The US presidential election had a winner weeks before the ballots were counted – and that was gold,” he said.

“That’s because during the election campaign both candidates were talking about expanding liquidity and government debt, which I feel would be beneficial to gold.”

Rhind added that the initial reaction to Trump’s victory was a very strong risk-on rally, but as the dollar and yields stabilise, investors will increasingly return to the precious metal.

“With the debt and global liquidity expansion, that has correlated most positively with gold and has driven gold to all-time highs,” he noted.

“With government debt around the world increasing, people will look for a hedge (and) we expect gold prices to continue to move up.”

Rhind said central banks, which had the same motivations as retail investors, would help underpin the gold price.

“Central banks have provided strong tailwinds for gold for many, many years. They’re accumulating large reserves of currencies, but looking to diversify and turning to gold. We expect that to continue.”

GraniteShares inks partnership with moomoo Australia

Rhind was in Australia this month to sign an exclusive partnership with moomoo Australia, giving Australian investors direct access to GraniteShares’ specialist ETFs featuring some of the world’s biggest and most innovative companies, and commodities including gold.

“As an entrepreneurial ETF provider focused on delivering innovative, cutting-edge alternative investment solutions, we are always looking for new ways to do things to offer better investment options to our clients,” said Rhind.

“We set out to disrupt the ETF marketplace and prove that innovation does not need to be expensive, at the same time as providing enhanced transparency and insights for a better trading experience.

“We see moomoo as kindred spirits in seeking to deliver innovation for their customers and look forward to a long and mutually beneficial relationship.”

Michael McCarthy, moomoo Australia's chief commercial officer, said the partnership is an incredible opportunity for moomoo users.

“Moomoo is always looking for ways to offer our customers more than they can get with other trading platforms and GraniteShares most certainly fits that bill,” said McCarthy.

“We are delighted to have signed this partnership with GraniteShares to give moomoo users exclusive access to GraniteShares innovative portfolio of ETFs, including exciting single stock funds that give investors exposure to the daily movement of companies including Apple, Nvidia, Amazon and Tesla.

“Moomoo prides itself on continually innovating the suite of services we offer to our customers, like AI optimisation for easier trading with dedicated support.

“The GraniteShares partnership is yet another example of this innovative approach to ensure moomoo users are ahead of the game.”

Debasement trade

JPMorgan analysts have also said Trump’s policies may favour both gold and Bitcoin as part of what they call the "debasement trade" – or buying assets perceived as stores of value when a currency is expected to weaken due to inflationary policies.

Like Rhind, JPMorgan – in a report released after the US election – pointed to central bank purchases of gold increasing, notably after geopolitical tensions rose in Eastern Europe. The investment bank also expects the world’s second-largest economy to continue diversifying further away from US dollar reserves towards gold amid expected US-China trade tensions under Trump.

Co-head of Argonaut Funds Management David Franklyn said retail investors were following the lead of central banks, which would in turn buoy Aussie gold miners.

“We have seen a surge in demand for physical gold ETFs which again reflect broader based demand for gold as a store of value in a time of uncertainty,” he said.

“Against this backdrop, Australian gold miners should benefit from continued gold price support. With the $A gold price now over $4,0000oz, the free cashflow generation of the producers should be significant, a factor not reflected in current valuations.”

This article was developed in collaboration with moomoo Australia, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.