Gold has surged to a historic high above $5,000, strengthening its role as a safe-haven asset, while Bitcoin has slipped sharply, marking a clear divergence between traditional and digital stores of value. Rising geopolitical risks, trade tensions, and fears of a US government shutdown are driving investors toward precious metals and away from cryptocurrencies.
Gold Soars on Trade Tensions and Safe-Haven Demand
Gold prices climbed to a record $5,080, extending a strong rally that has already delivered a 17% gain this year. Investors are increasingly turning to gold amid mounting uncertainty surrounding global trade, escalating tariff threats from the Trump administration, and concerns over a potential US government shutdown.
Market commentators note that the shutdown risk has intensified demand for precious metals, while renewed tariff threats—particularly against Canada over its trade relationship with China—have added to broader market anxiety. Silver has also benefited from the shift toward hard assets, breaking above $107 per ounce for the first time and rising nearly 50% so far this year.
Gold’s rally has also overshadowed major cryptocurrencies. It recently beat Ether to the $5,000 milestone, settling a Polymarket bet placed months earlier. Ether has struggled in contrast, falling below $2,800 and remaining more than 40% below its all-time high.
Bitcoin Weakens as Gold and Crypto Correlation Breaks Down
Bitcoin has fallen to around $86,000, erasing its gains for the year and dropping roughly 30% from its October peak near $126,000. The decline highlights a growing disconnect between Bitcoin and gold, assets that are often compared as hedges against economic uncertainty.
Over the past year, gold prices have surged more than 80%, while Bitcoin has declined about 17%. Analysts attribute the divergence to shifting investor preferences as markets price in stable interest rates and stronger-than-expected economic data. In periods of uncertainty, capital typically flows into US Treasuries and gold, but concerns over government stability and trade policy are making Treasuries less attractive.
