Gold hits a new high of $4790 as Trump's tariff policies trigger increased risk aversion.

Spot gold continues to climb. According to the latest news, gold has risen above $4790 per ounce, up 0.57% intraday. This is the second time gold has hit a new high in just two days, having broken through $4750 per ounce on January 20. More notably, since 2026, gold has accumulated an increase of over $400, a rise of more than 18%. Meanwhile, the cryptocurrency market is experiencing a significant correction, forming a stark contrast between the two asset classes.

Why Gold Continues to Hit New Highs

Trump’s Tariff Policies Spark Safe-Haven Demand

On January 17, Trump announced tariffs on eight European countries, planning to impose a 10% tariff starting February 1, rising to 25% in June. This policy directly triggered concerns over escalating global trade frictions, significantly boosting market risk aversion. Against this backdrop, gold, as a traditional safe-haven asset, has seen a substantial increase in attractiveness.

Fed Rate Cut Expectations Delayed, Supporting Gold Prices

In December, the US core CPI year-over-year remained at 2.6%, above the Fed’s 2% target. Although there is a 95% probability that the Fed will keep interest rates unchanged in January, the market generally expects the rate cut window to open after June. While the rate cut expectations have been delayed, they have not disappeared, providing a long-term foundation for gold’s upward trend.

Global Central Banks Continue Gold Purchases to Support Prices

Relevant information shows that central banks worldwide are continuously buying gold, providing solid underlying support for gold prices. This trend reflects the ongoing optimism among central banks regarding gold as a reserve asset and a safe-haven tool.

US Dollar Index Retreats, Boosting Gold

The US dollar index has fallen from high levels to around 99.14. A weakening dollar usually pushes up gold prices denominated in USD.

Contrast Between Gold and Cryptocurrency Markets

On the morning of January 19, the cryptocurrency market experienced a flash crash, with Bitcoin plunging nearly $3600 in a short period, and Ethereum dropping over 5%. Data shows that over the past 12 hours, total liquidation reached $830 million. Meanwhile, gold hit a new high against the trend, and spot silver also broke through $94 per ounce to set a new record. This stark contrast clearly reflects a shift in market risk appetite—investors are moving from risk assets to traditional safe-haven assets.

Outlook for Gold’s Future Movement

Investment banks remain optimistic about gold’s prospects. Institutions like Citibank and JPMorgan maintain bullish expectations of gold reaching $5000 within three months. From a technical perspective, gold continues to rise after finding support around $4750, indicating strong buying interest below.

However, it is important to note that gold’s subsequent performance will still depend on the movement of the US dollar index and signals from the Federal Reserve. A sudden strengthening of the dollar could suppress gold prices, while clarity on the Fed’s rate cut timetable will also significantly impact gold.

Summary

Gold has hit a new high of $4790, driven by multiple factors including the escalation of trade risks triggered by Trump’s tariff policies, delayed but still-present Fed rate cut expectations, and ongoing gold purchases by global central banks. In contrast to the sharp correction in the crypto market, gold’s strong performance reflects a clear rise in market risk aversion. In the medium term, gold still has room for further gains, but changes in the dollar trend and Fed policy expectations will be key points to watch.