Gold Surges 3% to $3,424 as Geopolitical Tensions Rise, Bitcoin Follows

Gold prices have surged nearly 3 percent in the past 24 hours, reaching approximately $3,424 per ounce on Tuesday, May 6, during the mid-Northern American session. This increase comes amidst volatile geopolitical tensions, with India launching a military offensive against Pakistan following a recent terror attack. The demand for gold by global central banks has continued to rise as the U.S. dollar weakened against major currencies, including the Pound, Japanese yen, and the EUR. The ongoing global trade negotiations have also heavily impacted equity markets, particularly U.S. stocks.

From a technical analysis perspective, gold is on the brink of a parabolic rally, potentially similar to the 1979 rally. If global demand for gold persists in the coming months, the precious metal could rally beyond $4,000 per ounce before the end of 2025.

The rally in gold prices has also boosted Bitcoin, with the flagship cryptocurrency surging nearly 1 percent to trade at about $94,600. Ahead of Wednesday’s Federal Funds Rate and the FOMC statement, Bitcoin has experienced heightened volatility. Analysts predict that the cash rotation from gold to Bitcoin by institutional investors will catalyze a much-anticipated parabolic rally for BTC and the wider crypto market in the near future. Institutional investors, including Strategy and BlackRock, have been accumulating Bitcoin in recent months.

On-chain data indicates that the Bitcoin network has experienced renewed demand from institutional investors. This trend suggests that as gold prices continue to rise, more institutional capital may flow into Bitcoin, further driving its price upward. The increased demand for gold and the potential for a parabolic rally in Bitcoin highlight the shifting dynamics in the global financial markets, with precious metals and cryptocurrencies both attracting significant investor interest.