The blueprint for Trump's next moves with impact on the USD and gold price.
"My style of deal-making is quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing to get what I'm after." - Donald Trump, The Art of the Deal
Today’s Gold Trading Alert is taking a special format. Namely, I’m going to discuss Donald Trump’s approach toward making deals. I’m also going to talk about Peak Chaos, and what it means for the key markets (USD Index and gold).
Note: this is one of those longer reports that you want to grab a cup of your favorite beverage for, but I assure you that this is going to be a read well worth you time. It’s essentially a roadmap for Trump’s next decisions, which tells us what the markets are likely going to react to well before it all happens.
Having said that, I’d like to start with getting something off my chest. Namely, why – after analyzing my own approach thoroughly – I think that I was wrong on the USDX’s movements in the past. I’ll also add why I think it’s likely that – after course-correcting - I’m correct now. But I’ll leave the final judgement to you.
I previously assumed that analyzing the current macroeconomic and technical pictures using regular tools makes most sense, as that’s what works almost all the time – markets follow the same principles and economic theories over and over again. Based on those theories, the USD Index should have rallied after the “Liberation Day” where Trump announce tariffs. However, the opposite happened.
I was wrong expecting the USDX to rally, because I was thinking like an economist rather than a market psychologist and a political analyst. I expected tariffs to strengthen the dollar through fundamental mechanisms—reduced import demand, compressed trade deficits, higher domestic prices requiring Federal Reserve restraint. All of this economic theory remains valid, but I failed to account for what Trump's own negotiation philosophy reveals about his strategy: he deliberately created maximum policy uncertainty as a pressure tactic.
The USD Index fell 9.5% because markets priced institutional chaos rather than economic fundamentals. But this weekend's US airstrikes on Iran's nuclear facilities have provided the crucial confirmation that we've reached what I call "Peak Chaos"—the point where even the most escalatory possible events fail to drive additional crisis pricing.
When Peak Chaos Stops Moving Markets
Saturday, June 21, 2025, will likely be remembered as the moment global markets reached true "peak chaos." President Trump ordered B-2 stealth bombers to obliterate three Iranian nuclear facilities—Fordow, Natanz, and Isfahan—in what he called a "spectacular military success." This represents the most escalatory military action possible short of nuclear war itself.
And how did gold react to this ultimate chaos event? It barely moved.
In fact, as Bank of America noted, gold has actually declined roughly 2% since Israel's initial strikes on Iran began. Despite the most dramatic geopolitical escalation in decades—the United States directly bombing a major power's nuclear infrastructure—precious metals failed to sustain any meaningful rally. We've reached the point where even genuine "World War III" scenarios don't trigger additional safe-haven flows.
This is the market telling us something profound: enough chaos has been priced in. When the absolute worst-case scenario fails to move markets higher, it signals that everything is already priced for maximum uncertainty. From here, even scenarios that remain chaotic but are less than maximally destructive will likely trigger reversals.
My Initial Error: Underestimating the Chaos Premium
I expected tariffs to strengthen the dollar through fundamental mechanisms—reduced import demand, compressed trade deficits, and higher domestic prices requiring Federal Reserve restraint. All of this economic theory remains valid.
But I failed to account for what Trump's own Art of the Deal reveals about his strategy: "I never get too attached to one deal or one approach... I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first." Trump deliberately created maximum policy uncertainty, and markets priced this chaos by driving the USD Index down 9.5%.
The fundamental tariff impacts I anticipated were overwhelmed by what markets perceived as permanent institutional chaos (as you’ll see, in Trump’s Art of Deal book, this chaos is not designed to be permanent). When investors lose confidence that the United States operates with predictable policy frameworks, economic theory becomes secondary to crisis pricing.
Why I'm Probably Right Now: The Oversold Reversal Setup
The Iran strikes have provided the crucial market test that suggests we've reached maximum chaos pricing. When the most escalatory possible event fails to drive further safe-haven flows, it confirms that markets have likely overshot to the downside.
Consider what Trump accomplished this weekend: He demonstrated that he's willing to take the most dramatic military action possible, yet markets barely reacted. This suggests investors have already priced scenarios that assume maximum unpredictability and confrontation. When reality meets or exceeds these expectations without driving further crisis pricing, reversal conditions emerge.
The USD Index's 9.5% decline represents one of the most dramatic presidential honeymoon selloffs in modern history. From these oversold levels, even modest policy clarity or economic fundamental reassertion could trigger sharp reversals.
Not to mention the super-powerful long-term support levels that were reached.
Trump's Art of the Deal: The Presidential Blueprint in Action
Trump's Art of the Deal isn't just autobiography—it's become the operational manual for his presidency. His documented negotiation philosophy explains both his past decisions and predicts his likely future actions with remarkable precision.
Historical Applications of the Blueprint:
During his first presidency, Trump's behavior followed his documented principles with extraordinary consistency. The NAFTA renegotiation exemplified his Art of the Deal approach perfectly. "The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you're dead. The best thing you can do is deal from strength, and leverage is the biggest strength you can have." Trump threatened to withdraw from NAFTA entirely—demonstrating willingness to walk away—then used this leverage to extract concessions while ultimately achieving the USMCA "win" he could promote.
His China trade war followed the same blueprint. "I'm the first to admit that I am very competitive and that I'll do nearly anything within legal bounds to win. Sometimes, part of making a deal is denigrating your competition." Trump escalated tariffs to maximum levels (denigrating Chinese practices), then negotiated the Phase One agreement as a demonstrable "victory" while maintaining baseline pressure through retained tariffs.
Even his Iran approach mirrors the book's teachings. "In most cases I'm very easy to get along with. I'm very good to people who are good to me. But when people treat me badly or unfairly or try to take advantage of me, my general attitude, all my life, has been to fight back very hard." After Iran "fought back" through proxy attacks, Trump applied maximum pressure (bombing nuclear facilities) while simultaneously offering negotiation pathways.
What This Suggests Going Forward:
Trump's documented need for concrete results rather than permanent chaos becomes crucial for July predictions. "You can't con people, at least not for long. You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don't deliver the goods, people will eventually catch on."
The phrase "deliver the goods" is critical—Trump requires demonstrable victories, not just ongoing negotiations. "Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game." His political survival depends on "keeping score" through visible wins, and from current USD oversold levels, even modest tariff implementation would provide the dollar strength narrative he needs to claim negotiation success.
"In the end, you're measured not by how much you undertake but by what you finally accomplish." This quote reveals why July will likely bring policy resolution rather than continued uncertainty. Trump understands that permanent chaos doesn't equal accomplishment—he needs measurable outcomes to maintain political credibility.
Understanding Trump's documented negotiation philosophy from The Art of the Deal reveals why the July 8-9 tariff deadline will likely provide the policy clarity that triggers USD reversal rather than continued weakness.
"I always go into the deal anticipating the worst. If you plan for the worst—if you can live with the worst—the good will always take care of itself." Trump has clearly planned for tariff extensions because his real goal isn't universal implementation—it's extracting maximum concessions while maintaining negotiating leverage. The 90-day pause framework gives him this flexibility.
"Sometimes I settle for less than I sought, but in most cases I still end up with what I want." This quote reveals Trump's likely July strategy: selective extensions for cooperative partners, targeted implementation against non-cooperative countries, and enough policy resolution to allow him to claim victory while providing markets the certainty they require.
The critical insight is that Trump's "wins" require demonstrable results, not just ongoing pressure. Having demonstrated his willingness to take the most extreme military action against Iran, he's established maximum credibility for his tariff threats. From this position of strength, he can afford to provide the policy clarity that would strengthen the dollar while still achieving his negotiation objectives.
Economic Theory Reasserts Itself from Oversold Levels
The fundamental economic case for tariff-driven USD strength remains compelling and may finally reassert itself from current oversold levels:
- Import Demand Compression: Even modest tariff implementation directly reduces demand for foreign currencies as US import volumes decline. When American businesses need fewer euros, yen, or yuan to purchase foreign goods, the resulting decrease in dollar supply to global markets mechanically strengthens the currency.
- Trade Deficit Dynamics: Tariffs compress the US trade deficit by reducing imports faster than exports decline. A smaller trade deficit means fewer dollars flowing overseas, creating structural USD support that operates regardless of policy uncertainty.
- Federal Reserve Policy Implications: Tariff-induced import price increases could force the Fed to maintain higher interest rates longer than otherwise anticipated, creating yield advantages that attract international capital to dollar-denominated assets.
- Foreign Exchange Flow Reversal: The basic mechanics of international trade mean that reduced import demand fundamentally alters currency flows. Even a 10-15% tariff rate (versus Trump's threatened 20-46%) would be sufficient to trigger meaningful USD strength from current oversold conditions.
The Iran Template: Maximum Pressure, Then Resolution
Trump's handling of Iran provides a template for his likely tariff strategy. After months of escalatory rhetoric, he took the most extreme action possible—bombing nuclear facilities—while simultaneously offering Iran opportunities for negotiation. As he stated: "There will be either peace, or there will be tragedy for Iran far greater than we have witnessed over the last eight days."
This represents classic Trump negotiation strategy: demonstrate maximum credibility for extreme action, then offer structured choices for resolution. Applied to tariffs, we should expect similar patterns: maintain credible threats for universal implementation while providing clear paths for countries that make concessions.
The key insight is that Trump has now established absolute credibility for his most extreme threats. Having bombed Iran's nuclear facilities, no trading partner can doubt his willingness to implement maximum tariffs. From this position, he can afford to provide policy clarity while still achieving negotiation objectives.
Why Markets Have Reached Peak Chaos
Several indicators suggest we've reached maximum chaos pricing:
- Gold's Non-Response: The most dramatic geopolitical escalation in decades failed to sustain precious metals rallies, indicating safe-haven demand is exhausted.
- USD Oversold Conditions: The 9.5% decline despite positive fundamental change represents extreme technical oversold conditions that historically reverse when fundamental drivers reassert themselves.
- Policy Predictability Emerging: Trump's patterns are becoming recognizable despite surface-level chaos. Markets may start anticipating his negotiate-threaten-resolve cycles rather than treating each deadline as genuinely uncertain.
- International Adaptation: Trading partners are adapting to Trump's style and making preemptive concessions (China framework agreement, UK trade deal) that reduce genuine policy uncertainty.
The July Inflection Point
Multiple factors suggest July will provide the policy clarity that triggers USD reversal:
Trump's Documentation Need for "Wins": The Art of the Deal reveals Trump's fundamental need to demonstrate concrete results. From current USD oversold levels, even modest tariff implementation would provide the dollar strength narrative he needs to claim negotiation success.
"Strategic Extension Patterns: Trump's historical behavior during his first presidency reveals a clear pattern of selective deadline extensions, though the exact percentage for July is strategic reasoning rather than mathematical certainty.
The Historical Pattern Evidence: During Trump's first presidency, major deadline situations consistently resulted in selective extensions:
· NAFTA/USMCA negotiations: Extended multiple times over 18 months for Canada and Mexico while maintaining pressure
· China Phase One negotiations: Extended through 2018-2020 period despite repeated "final" deadlines
· EU trade discussions: Granted numerous deadline extensions for auto tariffs and steel/aluminum exemptions
· Steel/aluminum Section 232 tariffs: Initially granted exemptions to Canada, Mexico, EU, and other allies before selectively implementing
The Strategic Logic for 60-70% Extensions: The percentage estimate comes from current negotiations: approximately 12-15 countries are actively negotiating bilateral frameworks (EU, Japan, South Korea, etc.) while 3-6 countries show limited cooperation. Trump's political need for demonstrable "wins" suggests he'll grant extensions to the majority while maintaining pressure on a minority to keep threats credible."
Even in his current term, this pattern holds:
- Canada tariffs: Received 30-day suspension before March 4 implementation, then received selective USMCA exemptions
- EU tariffs: Trump delayed 50% tariffs from June 1 to July 9 "to give the two sides more time to negotiate"
- China framework agreement: Reduced tariffs from 125% to 30% while maintaining negotiations
- Various country exemptions: Electronics from reciprocal tariffs, specific product exemptions for multiple countries
"I never get too attached to one deal or one approach. For starters, I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first." This quote explains why Trump grants extensions—he's managing multiple negotiations simultaneously and needs flexibility to extract maximum concessions from each.
The 60-70% extension rate emerges from practical politics: Trump needs enough "wins" (countries that make concessions) to demonstrate his strategy's effectiveness, while maintaining enough pressure (non-extension countries) to keep his threats credible. Complete implementation destroys negotiating leverage; universal extensions destroy threat credibility.
Current July Framework Confirms This Pattern:
Treasury Secretary Bessent's June 11 statement that extensions are "highly likely" for countries in "good faith" negotiations directly parallels Trump's historical approach. The framework agreement with China (reducing tariffs while maintaining pressure) provides the template: selective pressure relief for cooperative partners, continued escalation for non-cooperative ones.
Economic Theory Reassertion: From extreme oversold levels, even modest policy clarity allows fundamental economics to dominate. Reduced import demand and compressed trade deficits would strengthen USD regardless of remaining policy uncertainty.
Peak Chaos Confirmation: The Iran strikes proved that maximum escalatory events no longer drive further crisis pricing, suggesting markets are ready to focus on fundamentals rather than worst-case scenarios.
The USD Index: From Extreme Oversold to Reversal Setup
The USD Index has reached technical extremes that historically mark major turning points rather than continuation patterns. When currencies decline this sharply this quickly, they typically either:
- Continue falling due to genuine structural collapse (rare for reserve currencies)
- Reverse sharply when fundamental drivers reassert themselves (common pattern)
The Iran strikes provide crucial confirmation that we're in scenario 2. When maximum geopolitical escalation fails to drive further USD weakness, it suggests the currency has already priced worst-case scenarios and is positioned for fundamental reassertion.
The Federal Reserve Policy Implication
Tariff implementation creates a Fed policy dynamic that strongly supports USD strength from current levels. Even modest tariff rates (10-15%) would push import prices higher, forcing the Fed to maintain restrictive policy longer than otherwise anticipated. In a world where other central banks face domestic growth concerns, sustained US rate advantages would attract massive capital flows.
"One of the keys to thinking big is total focus... They're obsessive, they're driven, they're single-minded and sometimes they're almost maniacal, but it's all channeled into their work." Trump's documented focus on winning suggests he won't allow permanent USD weakness to undermine his economic narrative. A strong dollar validates his negotiation effectiveness; continued weakness suggests policy failure.
Structural Dollar Demand from Policy Clarity
The current USD weakness stems primarily from policy uncertainty, not economic fundamentals. US growth remains robust, inflation is moderating, and productivity gains continue outpacing global competitors. Once tariff policy provides clarity—even at reduced implementation levels—these fundamentals should reassert themselves.
The foreign exchange implications are mechanical: reduced US import demand decreases dollar supply to global markets while potential capital repatriation from overseas supply chains increases dollar demand. From extreme oversold levels, these flows could trigger rapid USD recovery.
International Positioning Creates Reversal Fuel
Foreign exchange positioning data suggests massive USD short positions accumulated during the chaos period. When sentiment shifts from crisis pricing to fundamental analysis, these positions provide reversal fuel. Large speculative shorts often become buyers when technical levels break, accelerating currency moves.
The Iran strikes demonstrated that additional chaos fails to drive further USD selling. This suggests short position exhaustion—a classic setup for sharp reversals when any positive catalyst emerges.
Trump's Political Narrative Requires USD Strength
"What separates the winners from the losers is how a person reacts to each new twist of fate." Trump's reaction to USD weakness has been to establish maximum negotiation credibility (Iran strikes, tariff threats) while creating resolution pathways (extensions, frameworks). This suggests he's positioning for a narrative shift from chaos to results.
A recovering USD validates Trump's negotiation strategy and provides political benefits heading into mid-term considerations. Continued USD weakness undermines his "America First" economic narrative. His documented preference for winning suggests he'll engineer conditions for dollar recovery rather than accept permanent weakness.
The July decision point represents Trump's opportunity to pivot from maximum pressure to demonstrable results. From 9.5% oversold levels, even modest tariff implementation combined with selective extensions would likely trigger significant USD strength as economic fundamentals overwhelm policy uncertainty.
Why Gold Will Likely Decline
The precious metals implications of Trump's strategy and the USD's oversold condition are straightforward and profound. Gold faces pressure from multiple converging factors that create one of the most bearish setups in years.
At the moment of writing these words, gold is down visibly even despite USD Index’s small daily decline. After failing to rally to its April high, it invalidated the move above its 61.8% Fibonacci retracement, and it looks like it’s only days or hours away from making June a down month.
And it’s all taking place in the price pattern that well know too well – that’s what we saw between the 2011 and 2012 tops. What gold is doing now is just like what it was doing after the final 2012 top – it was the very early part of the huge decline but back then nobody realized that.
Now we have more insight, and the move lower appears to be already underway.
Peak Chaos Thesis Confirmed
The Iran nuclear strikes represented the ultimate test of gold's safe-haven status. If bombing a major power's nuclear infrastructure doesn't sustain precious metals rallies, what geopolitical event possibly could? Bank of America's observation that gold has declined roughly 2% since Israel's initial Iran strikes confirms that safe-haven demand is exhausted.
This represents a fundamental shift in market psychology. Gold's failure to respond to maximum escalation suggests investors have already allocated maximum defensive positions. From here, even scenarios that remain dangerous but are less than World War III will likely fail to drive additional safe-haven flows.
USD Recovery Creates Double Pressure
Gold faces its classic inverse relationship with dollar strength, but from extreme levels on both sides. The USD's 9.5% oversold condition means even modest recovery could trigger sharp gold declines. Historically, when both assets reach extreme technical levels simultaneously, mean reversion moves are violent rather than gradual.
Federal Reserve Policy Headwinds
Tariff-induced import price increases complicate Fed policy in ways that hurt gold's appeal. Even modest tariff implementation could force the Fed to maintain restrictive policy longer than anticipated, increasing opportunity costs for holding zero-yield assets.
More importantly, if the Fed needs to maintain higher rates to combat tariff-induced inflation while the economy remains robust, it creates the exact environment—strong growth with restrictive monetary policy—that historically drives investors away from defensive assets toward productive investments.
Economic Fundamental Reassertion
As markets shift from crisis pricing to fundamental analysis, gold's role as portfolio insurance becomes less compelling. The extreme premium investors paid for protection against institutional collapse may prove excessive when Trump's documented patterns suggest resolution rather than permanent chaos.
"Sheer persistence is the difference between success and failure." Trump's persistence in threatening maximum chaos while offering resolution pathways suggests markets will eventually focus on his documented preference for measurable wins rather than permanent uncertainty.
Reduced Safe-Haven Demand: When maximum escalatory events fail to sustain gold rallies, it suggests safe-haven premiums are exhausted. Even ongoing Middle East conflicts may not provide sustained precious metals support.
USD Recovery Impact: Gold's inverse relationship with dollar strength becomes particularly pronounced when the USD recovers from extreme oversold conditions. Even modest dollar strength could trigger meaningful gold declines from current elevated levels.
Federal Reserve Policy: Tariff-induced import price increases may keep interest rates higher longer, reducing gold's appeal relative to yield-bearing assets.
Economic Fundamental Focus: As markets shift from crisis pricing to fundamental analysis, gold's zero-yield characteristics become more relevant relative to productive assets.
The Art of Strategic Patience
What I learned from being wrong initially is the importance of distinguishing between fundamental economic theory and market psychology timing. The tariff-driven USD strength case I made was economically sound but psychologically premature. Markets needed to price maximum chaos before fundamentals could reassert themselves.
Trump's Art of the Deal reveals a crucial insight: "Much as it pays to emphasize the positive, there are times when the only choice is confrontation." He chose maximum confrontation first—bombing Iran, threatening universal tariffs, creating comprehensive policy uncertainty. But having established credibility for extreme action, he can now afford strategic resolution.
"You can't con people, at least not for long... But if you don't deliver the goods, people will eventually catch on." Trump's "goods" require demonstrable results, not just ongoing chaos. The Iran strikes established maximum confrontation credibility; July tariff decisions will likely demonstrate resolution capabilities.
Conclusion: From Chaos to Clarity
The US airstrikes on Iran represent the completion of Trump's maximum pressure strategy. Having demonstrated willingness to take the most extreme actions possible, he's established absolute credibility for his threats while potentially exhausting market capacity for pricing additional chaos.
I was wrong initially because I underestimated markets' need to price institutional uncertainty before focusing on economic fundamentals. But I think I'm probably correct now because we've reached peak chaos—even the most escalatory possible events no longer drive further crisis pricing.
From the USD Index's 9.5% oversold position, Trump's documented preference for winning requires delivering results rather than maintaining permanent uncertainty. The July tariff deadline will likely provide enough policy clarity to allow economic fundamentals to reassert themselves, triggering USD strength and gold weakness from current extreme levels.
The Art of the Deal reveals that maximum pressure serves as prelude to resolution, not permanent chaos. Having achieved maximum pressure through Iran strikes and tariff threats, Trump can now afford the strategic clarity that markets require—and that his own political narrative demands—to demonstrate concrete negotiation victories.
At this time, “following the script” implies the need for results, and a decline in the level of chaos. That’s bullish for the USD Index and bearish for gold, silver, and mining stocks. The impact may not be immediate (gold’s decline suggest that it might be), but it is likely to be significant. And it can be profitable if one is positioned to take advantage of it.
Thank you for reading my today’s analysis – I appreciate that you took the time to dig deeper and that you read the entire piece. If you’d like to get more (and extra details not available to 99% investors), I invite you to stay updated with our free analyses - sign up for our free gold newsletter now.
Thank you.
Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief