Amid the severe volatility in global financial markets, gold continues to shine as a safe haven, setting a series of new record highs, having surpassed the $2,800 per ounce barrier for the first time in history.
As global concerns about trade tensions escalate—especially after the United States imposed tariffs on Canada, Mexico, and China, with the European Union on the way—investors are turning to the precious metal as a hedge against inflation and economic uncertainty.
As per live Gold price, the massive surge in gold prices since the beginning of this year reflects the bullish market movement dominating the precious metal since March 2024, driven by several key factors that led investors to view gold as a safe haven.
Bullish sentiments continue to flow from January 2025 into February.
Gold prices crossed its life time high during midday U.S. trading Wednesday. At the time of writing, gold managed to touch an all-time peak of $2877.
A sharply lower U.S. dollar index and some more safe-haven demand boosted the yellow metal.
We see the BIG T’s of the market that continue to move gold higher.
TRUMP – ever since his election campaign and post his victory, Donald Trump has created significant buzz in the market. He is leaving no stone unturned to once again make the dollar the strongest currency. But the in course of doing so, it has created a significant impact on the precious metals- particularly gold.
TARIFFS – While President Trump agreed to delay for one month his threatened trade tariffs against Mexico and Canada after speaking with Mexican President Sheinbaum and Canadian Prime Minister Trudeau, new U.S. tariffs against China did kick in Tuesday. China immediately retaliated with its own selected tariffs.
TRADE WAR – With the implementation of a 10% tariff on China starting Tuesday, Beijing retaliated by imposing its own tariffs on certain American imports, further intensifying trade tensions between the world’s two largest economies. The Chinese Ministry of Finance announced tariffs of 15% on American coal and liquefied natural gas, 10% on crude oil, and on agricultural equipment, as well as on a limited number of imported trucks and large-engine sedans
The Chinese Ministry of Commerce and Customs Administration also reported imposing export restrictions on certain critical minerals used in electronics, military equipment, and solar panels
MONETARY EASING – Major central banks in the United States, Europe, the United Kingdom, Canada, Switzerland, and Mexico continue their cycle of monetary easing and interest rate cuts, resulting in new liquidity injections into the markets.
Market experts say that in the medium term there is clear optimism for stocks, residential real estate, gold, and even cryptocurrencies thanks to the global monetary easing cycle.
TENSIONS – Gold prices today and in future will continue to remain high provided the uncertainties in the markets remain, macro-economic uncertainties, with inflation being sticky and potentially going higher, and also geopolitical uncertainties. We have an armed conflict in Europe with the potential to turn nuclear at the push of a button. The conflict in the Middle East has spread well beyond Israel’s borders, there’s now open conflict between Israel and Iran and which don’t quite look appealing for a ceasefire situation. This could escalate the crisis thus leading to higher gold prices.
DATA – As per Gold rate today, Gold extended its winning streak, hitting a new all-time high of $2,860, driven by mounting concerns over the economic impact of U.S. trade tariffs. The metal’s appeal as a safe-haven asset has surged as investors react to weaker-than-expected U.S. job market data.
The Job Openings and Labor Turnover Survey (JOLTS) revealed a decline in job openings to 7.6 million in December from 8.09 million previously, heightening fears of a slowing labor market.
The data pointed to a slowdown in the job market, which could allow the Federal Reserve to cut rates further. This keeps the US Dollar bulls on the defensive near the weekly low and turns out to be another factor that benefits gold.
Market experts anticipate further price fluctuations driven by upcoming US economic data. The ADP employment report on Wednesday (February 5) and non-farm payrolls on Friday (February 7) could impact the Federal Reserve’s monetary stance.
Factors that continue to support gold-
While much of the shift can be attributed to geopolitical considerations and concerns over U.S. sanctions, nagging questions regarding U.S. fiscal sustainability are a growing consideration, not just for the Chinese but also for domestic investors
There are still many questions regarding the new administration’s fiscal plans, however the potential extension of the 2017 tax cuts suggests deficits are unlikely to go down, and in the short-term may increase. This is the second factor supporting gold:
Safe-Haven Demand: Geopolitical risks and inflation concerns continue to drive investors toward gold as a hedge.
February 2024- February 2025, gold has ranged between $1984- $2877 a whooping jump of 893$ in a single year. Gold has for years generated highest returns in its class and as per the current market situation it is expected to continue doing the same.