Gold Surges 30% Year-to-Date Amid Middle East Tensions

As tensions in the Middle East escalate, the price of gold has surged to near-record highs, reaching $3,450 per ounce, just $50 shy of its all-time high. This surge is driven by investors seeking safe-haven assets amidst geopolitical uncertainty and inflationary pressures. The price of gold has gained 30% since the beginning of the year, catalyzed by trade tariffs and military actions in the Middle East.

In contrast, Bitcoin has gained only 13% year-to-date and is trading 5.3% below its all-time high of $111,800. Analysts suggest that Bitcoin is more closely aligned with equities than with gold, trading as a risk asset rather than a safe haven. This is evident in Bitcoin's recent performance, which has mirrored the recovery in US equity futures following an initial sell-off related to the Middle East conflict.

Analysts predict that if Bitcoin holds above support levels of $95,000 to $100,000, it could retest its record high of $112,000 and potentially move towards the $116,000 and $120,000 region. However, in the short term, oil and gold are likely to continue moving in the opposite direction to equities and Bitcoin.

Looking ahead, the US Federal Reserve’s policy meeting and rate decision could influence Bitcoin's momentum. If risk sentiment shifts and investors look for alternative stores of value, Bitcoin could see renewed momentum in the coming weeks. However, the current market sentiment suggests that Bitcoin is more closely aligned with equities than with gold, challenging its narrative as a digital gold.