Gold Price Surpasses $2,850 For First Time In History; Why Trump's Tariff Is Flaring Record Rally In Gold?

Gold Price Today: COMEX gold price continued its record rally momentum on February 5th by crossing over $2,850 an ounce level for the first in its history. The reason why gold prices have become an attractive haven despite dollar index rising by 1%, is due to Donald Trump's tariff which has received outrage from Mexico, Canada and China. Silver prices also jumped in the trend. Will the record rally continue by the end of this week?

Gold and silver prices have outperformed other commodities on a month and year-on-year basis.

Comex gold touched its new lifetime high of $2857.56 an ounce in early trade on Wednesday. Due to the latest performance, gold has now given over 8.4% returns on a month-on-month basis and surged by 40.3% on a year-on-year basis.

Meanwhile, silver price surged to its 3-month high to cross over $32.3 an ounce. With that silver also gives nearly 8% returns on a month-on-month basis, but outperformed gold on a year-on-year performance with the upside of 44%.

In a year, gold and silver are the most bought commodity. Year-on-year, Copper's gains are about 15.3%, while platinum is about 11%. However, iron ore has declined by over 18%.

Trump's Tariff:

As per the White House statement, until the crisis is alleviated, President Donald J. Trump is implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff.

President Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country, it said.

The three countries account for about over 40% of the total imports into the United States Of America in 2024.

China, Mexico and Canada have shown outrage and promised to retaliate against tariffs. In the latest development, Trump has paused the tariff plan for 30 days. Mexico has reportedly commenced a 10,000-strong border troop deployment for Trump's delay in tariff.

While international monetary fund body, IMF, has requested the US, China, Mexico and Canada to settle their disputes and keep the momentum of global trade.

Will Record Rally Party In Gold Over Soon?

According to Axis Securities weekly report, despite the U.S. dollar index surging nearly 1%, gold's upward momentum remained unscathed, surpassing $2,800 for the first time. This move underscores robust buying interest, further reinforced by strong ETF inflows into bullion. Additionally, escalating concerns over trade tensions, as the U.S. implements tariffs on Canada, Mexico, and China, have heightened safe-haven demand.

Key economic data releases from the U.S. this week could introduce further volatility to bullion prices, it said.

Further, the brokerage's note said, the recent surge in safe-haven demand, coupled with trade-related uncertainties, has provided strong support for the white metal.

Additionally, the Silver Institute projects a fifth consecutive year of significant supply deficits in 2025, primarily driven by sustained industrial demand and retail investment. Key sectors such as solar energy, electric vehicles, and consumer electronics are expected to offset any softness in jewellery and silverware consumption.