While many eyes have been fixated on the price of oil over the past week, gold has broken out of a previous level of resistance and surged to a seven-year high of $1,585 per ounce.
The gold rally comes after a US airstrike killed Iran’s military general Qasem Soleimani last week, which has now caused heightened tension between the two nations.
Much like Bitcoin, gold is a hedge against the traditional financial system. It often rallies during times of economic downturn and insecurity while falling during periods of economic growth.
The precious metal is now 35% up since August 2018 and 25% up over the past 12 months.
The next historic level of resistance for the price of gold is around $1,610, which was respected consistently throughout 2011 and 2013.
Meanwhile, Bitcoin has also experienced a tremendous week of upside price action, rising from $6,800 to $8,000 in the past five days.
The rise in popularity of traditional hedges like Bitcoin and gold demonstrates the fragile geopolitical landscape following the United States’ offensive move in the Middle East.
Iran has vowed to “retaliate” to the attack, while US President Donald Trump has said an act of retaliation would only equate to a more severe attack on Iran itself.
While the reality of any turbulent future warfare remains to be seen, it’s certain that the price of assets like Bitcoin, gold, and oil will undoubtedly rise in sync with the mounting tension.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.