Gold Hits Record High as Trade War Fears Ignite Safe-Haven Demand

Gold soared to unprecedented levels on February 10, 2025, as escalating trade tensions and geopolitical uncertainty fueled a surge in safe-haven demand. Spot gold peaked at $2,911.30 per ounce during the session before settling at $2,902.16, up 1.4%.

U.S. gold futures closed even higher at $2,929.60 per ounce, marking a 1.62% daily gain. This rally pushed the metal closer to the symbolic $3,000 mark, a level analysts now see as increasingly likely.

The surge followed U.S. President Donald Trump’s announcement of sweeping 25% tariffs on steel and aluminum imports, coupled with threats of additional retaliatory measures later this week.

Analysts like Edward Meir from Marex attributed the rise to mounting fears of a global trade war, which could exacerbate inflation and economic instability. These concerns have driven investors toward gold as a hedge against financial uncertainty.

China’s role in the rally has also been pivotal. The People’s Bank of China (PBoC) added gold to its reserves for the third consecutive month in January, signaling a continued push for reserve diversification amid record-high prices.

Additionally, China launched a pilot program allowing insurers to allocate up to 1% of their assets in gold, potentially injecting $27 billion into the market. These moves underscore the country’s strategic pivot toward gold amidst rising tensions with the U.S.

Gold Market Surge

ETF inflows further highlight strong institutional demand for gold. European ETFs recorded substantial gains as investors sought refuge from geopolitical risks and economic volatility.

Meanwhile, COMEX trading volumes exceeded expectations, reflecting heightened interest in bullion contracts. Technically, gold broke through key resistance levels at $2,885 and $2,900 during the day, reinforcing bullish momentum.

Analysts noted overbought indicators like the Relative Strength Index (RSI) at 76 but emphasized strong underlying support at $2,850 and $2,880. Ross Norman described the market as “relentless,” with buyers consistently stepping in during minor pullbacks.

Despite today’s rally, some caution remains. Capital Economics warned that rising U.S. Treasury yields could eventually weigh on gold prices later this year.

However, short-term sentiment remains overwhelmingly positive as investors brace for upcoming inflation data and Federal Reserve policy signals. With gold up nearly 11% year-to-date and geopolitical risks intensifying, its role as a safe-haven asset appears more relevant than ever.

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