SINGAPORE – For gold, the biggest crisis of Donald Trump’s Presidency could cut both ways.

While prices may continue to rise as investors seek a “safety trade", they could also drop if the turmoil ends up damping inflation risks as growth expectations are disappointed, according to  Michael Cuggino, president and portfolio manager at a San Francisco-based fund that overseas $2.8-billion.

Gold has climbed amid allegations that Trump asked FBI director James Comey in February to end his investigation of former National Security Adviser Michael Flynn and the president may have inadvertently passed sensitive intelligence to Russian officials. Trump fired Comey May 9, and has issued denials, but there’s concern the administration won’t be able to implement its economic plans. The equity rally faltered and the dollar’s trading near the lowest since November.

“If hard evidence of impropriety comes to light, this could begin to put at risk the timing of many of the items on Trump’s agenda, if not outright cancel them,” said 54-year-old Cuggino from the Permanent Portfolio fund. “The clock is ticking, the Republican majorities, especially in the Senate, are not large, and mid-terms are coming in less than 18 months,” he said, referring to congressional elections.

Spot gold climbed to the highest level in more than two weeks on Thursday, reaching $1 265.08/oz, and posted its best weekly gain in a month through Friday. Prices fell 0.2% to $1 253 on Monday.

Cuggino is bullish longer term. “It’s building a base,” he said in an interview last week. “If rates do continue to rise gradually, if monetary velocity is controlled, increasing but controlled, and you have growth, gradually rising rates, and gradual inflation, I’d expect to see gold to continue to go up.”

He sees risks in Europe, with parliamentary elections in France, the German vote in September and details of Brexit to be resolved, while Greece is still an issue. His Permanent Portfolio fund allocates about 20% to gold as part of a broader multi-asset strategy. “So we do know it and we use it,” he said.

Bullion has an increasing chance of breaking through $1 300 this year if the US political situation worsens and higher interest rates won’t be a hindrance, Daniel Hynes, an analyst at Australia & New Zealand Banking Group Ltd., said in a report Friday. Still, Goldman Sachs Group said last month that solid growth in the US and an increase in real interest rates would drive gold down, predicting $1 200 in three and six months time.