Gold prices surged to $3,450 per ounce on Monday, inching close to its all-time peak of just under $3,500 reached in April, according to TradingView. This marks a remarkable 30% gain since the start of the year, a movement catalyzed by the ongoing geopolitical tensions and trade tariffs imposed by US President Donald Trump.
The recent escalation of military conflict in the Middle East, triggered by an Israeli missile strike on Iran on June 13, further accelerated gold’s rise, while Bitcoin prices fell amid the unrest.
Gold’s rally is closely tied to its reputation as a safe-haven asset and an effective hedge against inflation. As inflationary pressures mount, investors often flock to gold for protection.
A recent report from CBS News noted that should economic data or comments from officials raise concerns about inflation or interest rate policies, gold prices could surpass previous record highs.
Bitcoin’s Performance Compared to Gold
Bitcoin, by contrast, has gained only 13% year-to-date. Currently, it trades about 5.3% below its all-time high of $111,800, reached on May 22.
IG Markets analyst Tony Sycamore explained that Bitcoin still behaves more like a risk asset, similar to US equities, rather than a safe haven like gold.
He pointed out that with US equity futures rebounding sharply after Friday’s sell-off, Bitcoin could catch up with these gains. Provided Bitcoin maintains support between $95,000 and $100,000, Sycamore expects a retest of the $112,000 record high, with potential moves toward $116,000 and $120,000.
Apollo Crypto analyst Henrik Andersson agreed that equity futures and Bitcoin are recovering after the initial sell-off linked to the Middle East news. However, he noted that in the short term, oil and gold are likely to move in the opposite direction to equities and Bitcoin.
Nick Ruck, director at LVRG Research, observed that Bitcoin’s reputation as “digital gold” is waning as it struggles to follow gold’s rally. Traders seem more focused on Bitcoin’s short-term volatility and liquidity, making it behave more like a risk asset than a traditional safe haven.
Markets are closely watching the upcoming US Federal Reserve policy meeting and rate decision scheduled for Wednesday. Futures markets currently predict a 96.7% chance that interest rates will remain steady at 4.25% to 4.50%.
Eugene Cheung, chief commercial officer at digital asset platform OSL, suggested that if risk sentiment changes and investors seek alternative stores of value, Bitcoin could regain momentum in the weeks following the Fed meeting.
What The Author Thinks
Bitcoin’s inability to act as a safe haven during the recent Middle East tensions highlights that it remains a developing asset class. Unlike gold, which investors turn to in times of crisis, Bitcoin continues to trade more like a high-risk equity. This reflects its volatility and the still-emerging trust in cryptocurrencies as a reliable store of value. However, the upcoming Federal Reserve meeting may provide a catalyst for Bitcoin to either strengthen its position or further align with traditional risk assets. For now, investors should treat Bitcoin as part of their speculative portfolio rather than a crisis hedge.
Featured image credit: Darkest via GoodFon
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