Gold price near all-time high amid increased bitcoin and equity volatility
2025-02-04
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The price of gold is holding above the $2,820 mark after reaching an all-time high on Monday as investors seek safe-haven assets amid rising volatility in bitcoin and global equities. The surge in gold prices has been fueled by increased demand after China announced retaliatory tariffs on U.S. goods, while markets await key U.S. jobs data set to be released later this week.
Bitcoin, in contrast, has experienced sharp price swings. The cryptocurrency is trading above $99,000, rebounding from a local low of $92,000 after Monday’s liquidations. Despite the recovery, bitcoin remains over 9% below its all-time high of $108,000, recorded on Jan. 20, 2025.
U.S. stock futures also reflect ongoing uncertainty, with Dow Futures, S&P 500 Futures, and Nasdaq Futures currently down 0.25%, 0.20%, and 0.07%, respectively.
Gold's appeal as a short-term refuge
Amid the uncertain market conditions, analysts highlight how gold has asserted itself as a safe haven. “Investor flight to gold during times of volatility is well-documented,” Bitfinex analysts told The Block. “Although bitcoin is often referred to as ‘digital gold,’ its higher volatility and shorter market history mean it does not yet provide the same level of perceived stability.”
WeFi Head of Growth Agne Linge noted that proposed Trump tariffs could fuel inflation, making certain goods more expensive. “This could threaten stock market growth, leading investors to seek short-term refuge in gold,” Linge said.
Bitcoin historical volatility over the past week shows a sharp increase on Monday. Image: TradingView.
Volatility metrics confirm market uncertainty
Bitcoin’s 24-hour realized volatility has increased significantly, according to the BITMEX BVOL24H Index. Meanwhile, the Cboe Volatility Index (VIX) — which measures expected stock market volatility—increased from 16.43 on Jan. 31 to 18.62 on Feb, 3, 2025.
The VIX index shows a sharp increase on Monday. Image: CBOE
Tariff uncertainty fuels market instability
Equities and crypto markets have remained turbulent, with bitcoin briefly reclaiming $100,000 following news of a one-month delay to U.S. tariffs on Mexico and Canada.
However, this relief was short-lived as China responded with retaliatory tariffs, driving renewed volatility and pushing bitcoin back to $98,000. Beijing retaliated to the threat of tariffs on Tuesday with a sweeping package of economic measures against the U.S., following President Donald Trump's decision to impose a 10% tariff on Chinese imports.
China’s Ministry of Finance announced new duties, including a 15% tax on certain types of coal and liquefied natural gas, as well as a 10% tariff on crude oil, agricultural machinery, large-displacement cars, and pickup trucks. These measures are set to take effect on Feb. 10.
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