Gold Surges 2% to $3,400 Amid Geopolitical Tensions and Weakening Dollar

Gold prices have surged to new highs ahead of the Federal Open Market Committee (FOMC) meeting, driven by escalating geopolitical tensions and a weakening US dollar. The precious metal has gained nearly 2% in recent trading sessions, with prices nearing $3,400 as investors seek safe-haven assets amidst global risk sentiment deterioration. The Middle East tensions and US trade measures have further unsettled markets, contributing to the increased demand for gold.

Concurrently, major altcoins, including Ethereum, have experienced a dip. This divergence in performance has sparked debates among analysts regarding the capital shift and the strain on the crypto market. Ethena (ENA) and Movement (MOVE) are among the altcoins facing large token unlocks this week, which could potentially lead to heightened volatility. The uncertainty surrounding these unlocks adds to the overall market strain, as investors reassess their positions in the face of geopolitical risks and economic uncertainties.

One such analyst, Michael van de Poppe, submitted that Gold’s sustained rally is a key factor behind the latest price decline across the altcoin market. The analyst believes digital asset investors are currently focusing more on Gold’s strong performance. Now, with the traditional safe haven hitting new highs, analysts like Van de Poppe are watching to see if any pullback in Gold’s price could spark a recovery for Ethereum and other altcoins, possibly around the time of the upcoming FOMC meeting.

Van de Poppe’s latest post on X featured a GOLD/USD chart showing how the solid mineral asset maintained a steady uptrend for over two years, beginning in 2023. According to data from the shared chart, Gold traded below $1,700 at the beginning of 2023 but rallied steadily to reach over $3,500 in 2025. While Gold’s long-term performance is notable, Van de Poppe focused on its short-term price behavior compared to the crypto market. The analyst highlighted a clear upward rebound for Gold when Ethereum and other altcoins were experiencing significant bearish pressure.

However, not all analysts agree that Gold’s success is directly causing the slump in crypto assets. An alternative view suggests the decline is because of a slump in demand within the crypto market itself. According to one such analyst, the altcoin space hasn’t seen compelling new developments in roughly four years, and that speculative meme projects drained liquidity from more established altcoins.

The weakening US dollar has also played a significant role in the capital shift. As the dollar wobbles ahead of the FOMC meeting, investors are turning to gold as a hedge against potential market volatility. The strong safe-haven demand from various regions has further propelled gold prices, which jumped sharply to $3,324. The escalating conflicts in the Middle East and Eastern Europe have also contributed to the increased demand for safe assets, driving gold prices higher.

Analysts are closely monitoring the situation as the FOMC meeting approaches. The outcome of the meeting could provide further clarity on the direction of monetary policy and its impact on both gold and altcoins. The capital shift between these assets highlights the delicate balance between traditional safe-haven investments and the emerging crypto market, as investors navigate the complexities of the current economic landscape.