Within a few weeks, investors will have a clearer idea of Trump’s tariff plans. To get ahead of tariff increases, consider a defensive strategy.
Investors may buy defensive stocks in iron ore and gold to protect against inflation in the next 12 to 18 months. Gold exchange-traded funds (GLD) and iron ore both performed well, especially in 2018-19, during President Trump’s leadership.
Since last September, China prepared its markets for higher U.S. tariffs. It introduced looser monetary policies and is ready to add money to its financial systems. The country may revitalize its real estate market, which has millions of unfinished homes. This would increase demand for iron ore and steel.
Iron ore firms that investors may consider include Cleveland-Cliffs (CLF) and US Steel (X). Copper prices should strengthen as construction activity in China rises. Watch Freeport-McMoRan (FCX), after shares hovered at around 4.5% above their 52-week low last week.
BHP Group (BHP), Rio Tinto (RIO), and Vale (VALE) would also end its multi-year slump.
Gold prices will strengthen if inflation rises due to tariffs. Barrick Gold (GOLD) pulled back over the last few weeks, while Newmont (NEM) lost nearly 30% of its value in the last three months. As GLD stock trades back to all-time highs, those two miners should bounce back.
