Precious Metal Soars Past $5K Milestone as Bitcoin Gap Widens Dramatically
The precious metal climbed past $5,000 to set a new record during heightened trade tensions as Bitcoin dropped to $86,000, highlighting a dramatic split with gold's 17% January rally.
The precious metal has climbed beyond the $5,000 threshold as geopolitical uncertainties and international trade tensions escalate, even as Bitcoin has declined closer to the $86,000 mark, demonstrating a growing gap between these two distinct assets.
The precious metal jumped to an unprecedented peak of $5,080 during Monday's trading session after posting a 17% increase throughout the current year, based on data from Gold Price, as market participants rushed toward the traditional safe haven asset driven by concerns about a possible US government shutdown alongside unpredictability surrounding the Trump administration's intensified tariff policies.
"A likely government shutdown just added fuel to the fire for precious metals," the Kobeissi Letter said on Monday.
International trade frictions have escalated further following another weekend wave of tariff announcements, with US President Donald Trump issuing threats of a 100% tariff against Canada regarding a China trade deal.
The yellow metal achieved the $5,000 benchmark ahead of Ether (ETH), settling a Polymarket wager that was initiated in early October regarding which asset would cross that threshold initially. ETH valuations plummeted beneath $2,800 during Sunday's session and currently sit more than 40% lower compared to their August record peak of $4,946.
The white metal silver has similarly climbed beyond $107 per ounce, marking its first occurrence in recorded history, and has increased by 48% throughout 2026 to date.
Bitcoin and gold correlation crumbles
Bitcoin (BTC) has declined by 1.6% throughout the trading day, wiping out every gain it had accumulated during the current year as the cryptocurrency dropped to a five-week bottom just under $86,000 on Coinbase during late Sunday hours, based on data from TradingView.
The leading cryptocurrency now trades 30% beneath its October high point of $126,000 as the growing separation between the cryptocurrency and the precious metal persists in widening.
Investors more interested in gold than treasuries
The precious metal is experiencing a strong rally while digital currencies are experiencing declines due to the growing probability that the US government will encounter a shutdown before the month concludes, according to Jeff Mei, chief operations officer at the BTSE exchange.
"Additionally, markets are pricing in the likelihood that the Fed will maintain current interest rate levels, given that the economy has been showing stronger growth and employment numbers," Mei told Cointelegraph.
"Normally, in uncertain times, capital moves towards safe-haven assets such as US Treasuries and gold, but because of the potential government shutdown and Trump's recent tariff threats over Greenland, global investors are less inclined towards Treasuries and more towards gold," he added.