Gold Soars Past $4K Milestone as Bitcoin Retreats Amid Dollar Index 2-Month High

Gold just blasted through the $4,000 barrier—marking a historic rally while Bitcoin stumbles. The dollar flexes its muscles, hitting a two-month peak that's sending shockwaves across crypto markets.

The Great Divergence

Traditional safe-haven assets are stealing the spotlight as digital gold gets overshadowed by the real thing. Gold's relentless surge past $4K demonstrates classic flight-to-safety behavior while Bitcoin faces headwinds from a strengthening dollar index.

Dollar Dominance Returns

The greenback's resurgence to two-month highs creates the perfect storm for crypto outflows. When the dollar index climbs, risk assets typically bleed—and Bitcoin's no exception to this fundamental rule.

As gold celebrates new all-time highs, Bitcoin traders face the classic dilemma: fight the Fed or join the flight to safety. Because nothing says 'stable store of value' like watching your portfolio swing 10% before breakfast—unless you're holding physical gold, apparently.

Gold driven higher by ETF inflows

While BTC's rally has stalled, gold is showing no signs of slowing down, as its per-ounce price has surged past $4,000 for the first time in its history.

According to ING, the recent rally is catalyzed by a surge in inflows into gold-linked exchange-traded funds (ETFs).

"Investors are adding gold ETFs at a rapid pace. Last week, gold-backed exchange-traded funds expanded again, taking the total gold ETF holdings to the highest level since September 2022. There is still room for further additions, given the current total remains shy of the peak hit in 2020. More inflows could push gold even higher," ING's analysts said.

Prices have doubled in two years, spurred by central banks buying the yellow metal to diversify away from the U.S. dollar. President Donald Trump's aggressive trade policy and conflicts in the Middle East and Ukraine have added to the bullish momentum.

Gold-backed tokens such as PAXG (PAXG) Tether Gold (XAUT) have also risen above $4,000. The combined market value of all gold tokens has risen above $3 billion.