The price of gold is nearing its all-time high as tensions in the Middle East escalate, but analysts say they’re doubtful Bitcoin will do the same as investors prioritize other safe-haven assets.
The price of gold rose to $3,450 per ounce on Monday, just $50 shy of its all-time high of just below $3,500 in April, according to TradingView.
The usually slow-to-move asset has gained a whopping 30% since the beginning of the year, catalyzed by US President Donald Trump’s trade tariffs and, more recently, an escalation of military action in the Middle East following an Israeli missile strike on Iran on June 13, which caused Bitcoin prices to fall.
Gold prices have also been linked with inflationary pressures, as it is considered a safe haven and an inflation hedge by investors.
“Should additional data or comments made by economic officials indicate wider concern over inflation or interest rate policy, this price could very easily tip into new, record territory,” CBS News reported over the weekend.
Will Bitcoin follow suit?
Comparatively, Bitcoin (BTC) has gained just 13% year-to-date. It is also flirting with its all-time high, trading 5.3% below the $111,800 peak it reached on May 22.
However, IG Markets analyst Tony Sycamore told Cointelegraph that Bitcoin still trades more as a risk asset akin to US equities rather than as a safe haven like gold.
“In that sense, with US equity futures rebounding strongly today from Friday’s sell-off, there is room for Bitcoin to move higher and play some catch-up to US equity futures.”
He added that, providing Bitcoin holds above support at $95,000 to $100,000, “I expect a retest of the $112,000 record high before a move toward the $116,000 and $120,000 region.”
Short-term gains for oil and gold
Apollo Crypto analyst Henrik Andersson echoed the sentiment, telling Cointelegraph that “we are seeing a recovery in equity futures as well as in Bitcoin after an initial sell-off on Friday related to the news out of the Middle East.”
Related: What will Bitcoin price be if gold hits $5K?
However, he added that in the short term, “oil and gold are likely to continue to move in the opposite direction to equities and Bitcoin.”
LVRG Research director Nick Ruck was of a similar opinion. Bitcoin’s “digital gold” narrative is “slowly fading” as it struggles to mirror gold’s rally, “with traders instead focusing on short-term volatility and liquidity conditions, making BTC more correlated to risk assets than safe havens,” he told Cointelegraph.
Looking ahead to Fed meeting
“If risk sentiment shifts and investors look for alternative stores of value, Bitcoin could see renewed momentum in the coming weeks if this week’s Fed meeting comes in as expected for investors,” said Eugene Cheung, chief commercial officer at digital asset platform OSL.
Markets are looking ahead to the US Federal Reserve’s policy meeting and rate decision on Wednesday, but futures markets still predict no change in rates at the coming meeting, with a 96.7% probability of them remaining at 4.25-4.50%.
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