Gold Hits Record High Amid Market Volatility as Bitcoin Struggles for Momentum

Gold surged to a historic peak of $2,902 per ounce on Monday, extending its remarkable rally with a 17.5% gain since the beginning of the year. The precious metal’s upward momentum has been driven by central bank acquisitions, economic uncertainty, and heightened demand for safe-haven assets, according to a World Gold Council (WGC) report.

Central Bank Demand Fuels Gold Rally

Data from the WGC indicates that global gold reserves expanded by 694 tons in the first ten months of 2024, sustaining the record-breaking accumulation trend observed in recent years. The report attributes this surge in gold purchases to de-dollarization efforts and mounting geopolitical risks, with central banks expected to remain net buyers of gold in 2025.

Notably, Poland, India, Turkey, and China emerged as some of the largest gold accumulators in 2024, with net acquisitions of 89.5 tons, 72.6 tons, 74.8 tons, and 44.2 tons, respectively. Analysts cite the Western sanctions on Russia’s central bank reserves in 2022 as a pivotal moment reinforcing gold’s role as a strategic geopolitical hedge.

A survey within the WGC report found that 69% of central banks plan to continue increasing their gold reserves, while 83% of respondents in industrialized economies view gold as a reliable hedge against inflation and financial instability.

Trump’s Tariff Policy Stokes Market Uncertainty

Investor sentiment remains fragile following former President Donald Trump’s announcement of a 25% tariff on all steel and aluminum imports on Sunday. The move rekindled fears of a global trade war, sparking volatility across financial markets.

In early trading, steel and aluminum stocks saw significant gains, with U.S. Steel and Nucor rising by 8%, while Cleveland-Cliffs advanced 9%. Alcoa also recorded a 4% increase. However, the broader implications of the tariffs remain uncertain, especially considering Mexico and Canada’s role as key U.S. suppliers.

Market analysts warn that the tariffs could destabilize trade relations and trigger retaliatory measures. QCP Capital, in a note on Monday, highlighted the potential for increased volatility stemming from Trump’s policies.

“President Trump is highly attuned to market reactions. If investors continue to test his resolve, he may escalate his rhetoric or actions, injecting further uncertainty into the economic landscape,” QCP Capital stated.

Bitcoin Struggles to Break Out as Gold’s Appeal Strengthens

Despite frequent comparisons to gold as an inflation hedge and geopolitical safe haven, bitcoin has struggled to gain traction amid market turbulence. A Monday report from Bitwise emphasized that Bitcoin’s correlation with risk assets has remained elevated, making it more vulnerable to shifts in market sentiment.

Bitcoin, which started 2025 trading at approximately $93,000, has climbed to $97,745, reflecting a modest 5.1% year-to-date increase. Meanwhile, as measured by the GMCI 30 index, the broader cryptocurrency market saw a 0.59% gain in the past 24 hours, standing at 168.82 at the time of publication.

As inflation concerns and trade policy uncertainty persist, gold continues to outshine Bitcoin in its traditional role as a financial refuge, reinforcing its dominance in institutional portfolios and central bank reserves.