Gold Outshines Bitcoin As Trump's Gaza Plan, US-China Tensions Fuel Rally—Peter Schiff Calls It 'Extremely Bullish'

Gold prices surged to an unprecedented high of $2,849.05 per ounce on Wednesday, driven by renewed U.S.-China trade tensions and geopolitical uncertainties in the Middle East. The precious metal has demonstrated resilience this year, posting a 7.31% year-to-date gain, outperforming Bitcoin‘s BTC/USD 4.27% increase during the same period.

What Happened: The latest rally came after former President Donald Trump imposed a 10% tariff on Chinese imports, prompting a measured response from Beijing.

Peter Schiff, a prominent economist and gold advocate, views current market dynamics as bullish. “The fact that the public is selling and not buying is extremely bullish for gold. It’s a contrarian indicator,” Schiff posted on X, suggesting that retail investors might return to the market at higher price levels.

I forgot to mention it, but the fact that the public is selling and not buying is extremely bullish for gold. It's a contrarian indicator. Retail gold investors will eventually stop selling, and later, the general public will start buying, but at much higher prices.

— Peter Schiff (@PeterSchiff) February 4, 2025

See Also: Cathie Wood-Led Ark Invest Dumps $7M Worth Of Palantir Stock Amid Searing Rally

Why It Matters: Market sentiment received additional support from Trump’s proposal to assume U.S. control over Gaza Strip reconstruction, adding another layer of geopolitical complexity to the precious metal’s appeal. However, analysts note that persistent high interest rates could potentially cap gold’s upside.

Gold futures for April delivery reached $2,879.49, up 0.13%, reflecting strong demand. The metal has appreciated 7.56% since Trump’s November election victory, though this performance trails Bitcoin’s 40.15% surge over the same timeframe.

The metal’s performance comes at a time when investors are closely monitoring potential inflationary pressures that could emerge from new tariffs, possibly influencing Federal Reserve monetary policy decisions.

Despite the robust rally, market participants remain vigilant about interest rate trajectories, which traditionally have an inverse relationship with gold prices.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.