The fight for safety begins: Gold hits all-time highs, Bitcoin remains below record highs

The fight for safety begins: Gold hits all-time highs, Bitcoin remains below record highs

As tensions in the Middle East continue to escalate, gold is seeing dramatic gains and is approaching all-time highs. Conversely, Bitcoin remains more of a risk asset and is trading below its record highs. What does this mean for investors and what is the latest market outlook?

Gold at the top

According to TradingView, the gold price climbed to around $3,450 per ounce on Monday, just off its April high of just under $3,500. This exceptional pace of growth is largely influenced by the escalating conflict in the Middle East, especially after the Israeli missile attack on Iran on June 13, which caused a significant drop in bitcoin prices.

Investors viewed gold as a safe haven and a hedge against inflation, which contributed to its sharp rise. Since the beginning of the year, the price of gold has gained a staggering 30%, despite global economic uncertainties. Economists warn that if fears of inflation or interest rate policy changes increase further, gold could break further records.

Bitcoin: A risky asset in uncertain times

Unlike gold, Bitcoin (BTC) is still held more as a risk asset that follows the stock markets. It is currently trading around $107,000, slightly higher than at the start of the year but still 5.3% below its all-time high of $111,800 on May 22. Bitcoin has gained around 13% since the beginning of the year, below gold's rise, and its growth is now mainly influenced by the sentiment in the stock markets and the evolution of global risk appetite.

Analysts note that Bitcoin is still seen as a risk asset more akin to equities than a safe haven like gold. IG Markets' Tony Sycamore told Cointelegraph that given the recent rebound in U.S. stock index futures, there is room for Bitcoin to move higher, perhaps towards its record high. If it stays above support around $95,000 to $100,000, he said there could be near-term tests of the $112,000 and even $116,000 to $120,000 levels.

Short-term outlook and the impact of the Fed meeting

Some analysts predict that if investor sentiment changes, for example as a result of the US Federal Reserve (Fed) decision, Bitcoin could see renewed momentum. Eugene Cheung of the OSL platform points out that markets are anxiously awaiting Wednesday's Fed meeting, but interest rates are likely to remain unchanged at 4.25-4.50%.

In the short term, oil and gold prices are expected to move in the opposite direction to equities and Bitcoin, reflecting the different market reactions to geopolitical and macroeconomic events.

What lies ahead?

Overall, at a time of rising tensions in the Middle East, gold and Bitcoin are viewed differently. Gold has become a symbol of safety and a store of value, while Bitcoin still remains a risk asset that can reach new highs if sentiment improves. Investors should monitor not only geopolitical events but also macroeconomic signals from the Fed, which can significantly influence the future direction of these key assets.

Remaining mindful of investments, it is important to consider current trends and risks as markets change rapidly and each move can be pivotal.

*This is not an investment recommendation.

Coingarage Team