Gold Record High. Trump Wants a Crash?

Gold took centre stage in financial markets last week, smashing through the US$3,000 per ounce barrier for the first time. This historic rally was accompanied by silver’s climb to US$33.69 per ounce internationally amid a sharp U.S. stock market sell-off, escalating trade tensions, and speculation about the Federal Reserve’s next moves. With the FOMC press conference slated for 5:30 AM Thursday (Melbourne/Sydney time) investors are on edge. Will the Fed be pressured to cut sooner? One provocative theory is that President Donald Trump and his Treasury pick, Scott Bessent, might be welcoming the stock market dump to pressure the Fed into rate cuts and boost bond buying.

Gold’s New Record High

Gold’s ascent has been nothing short of spectacular. On March 14, spot gold breached US$3,000 per ounce. The catalysts? A weakening U.S. dollar, central bank gold stockpiling (notably by China), and fears of global economic slowdown spurred by U.S. tariff threats.

Wild back-and-forth tariff threats and negotiations combined with persistent interest rates have hit risk markets hard. Over the past week, the U.S. stock market has taken a beating, with major indices like the S&P 500 and Dow Jones plunging as investors flee “risk” assets. This dumping has fuelled speculation about deeper motives, tying the market’s downfall to gold’s gains. Analysts note that the sell-off, triggered in part by trade policy uncertainty and profit-taking after a strong 2024, has coincided with gold’s safe-haven rally.

The Trump-Bessent Purposeful Crash Theory

Could Trump and Bessent be orchestrating this stock market downturn? The theory posits that a weaker equity market could serve its economic agenda by pressuring the Federal Reserve to slash interest rates and encouraging investors to pile into U.S. Treasury bonds. Bessent, a hedge fund veteran tapped as Trump’s Treasury Secretary nominee, has publicly hinted at favouring lower rates to stimulate growth. Anyone who has read Trump’s social media posts is acutely aware that this is exactly what he also wants. A submerged stock market might force the Fed’s hand, making rate cuts more likely and boosting demand for bonds as a safe alternative. These moves could also stabilise the dollar and fund Trump’s fiscal plans.

FOMC Press Conference

All eyes now turn to the FOMC press conference on Thursday morning, Melbourne/Sydney time. Following the Fed’s latest policy meeting, Chair Jerome Powell’s remarks could either confirm or deny the success of this strategy (or coincidence). Markets are pricing in a dovish-leaning policy after the Fed paused its easing cycle earlier this year amid sticky inflation above 2%. Lower rates would further erode the opportunity cost of holding gold, potentially pushing prices toward US$3,100, while also aligning with the Trump-Bessent playbook by supporting bond yields and calming equity markets.

Any hawkish surprise could slow gold’s rally and spark a stock rebound, undermining the crash-for-cuts narrative. Investors are dissecting every clue, from recent Fed minutes to Powell’s tone, knowing Thursday’s outcome could redefine the interplay between stocks, bonds, and precious metals.