- Gold breaks key support as capital rotates into Bitcoin and high-risk assets.
- Middle East tensions spark short-term gold rebound amid rising oil price fears.
- Fed’s dovish stance may weaken dollar, boosting crypto and risk asset appeal.
Gold is facing mounting pressure as investor sentiment shifts toward risk-on assets, igniting a surge in cryptocurrencies and equities. The yellow metal recently breached a critical technical level, raising concerns of a broader trend reversal.
At the same time, intensifying geopolitical conflict in the Middle East and evolving U.S. monetary policy have added complexity to an already turbulent financial landscape. These events have created a volatile backdrop where commodities retreat while digital assets rally, suggesting a shift in market dynamics.
Technical Breakdown Sparks Risk Rotation
Analyst Michaël van de Poppe emphasized that gold’s decline below the $3,365 support level confirms a bearish breakdown. This pivotal move has coincided with a rapid rise in Bitcoin and altcoins, which are now outperforming other asset classes.
As gold trends toward its next support at $3,201, and potentially deeper to $3,080, concerns grow over a prolonged correction in commodities. This downward movement reflects a broader reallocation of capital. Investors appear to be pivoting away from safe-haven assets toward higher-risk plays, betting on the resurgence of speculative momentum.
The surge in altcoins underscores a revival in appetite for risk, likely driven by increased liquidity expectations and a weakening U.S. dollar. If gold fails to reclaim the $3,365 level, the bearish outlook could persist.
Update on the Gold chart.
— Michaël van de Poppe (@CryptoMichNL) June 24, 2025
It's breaking south as it lost a crucial level and that resulted into a strong surge of the risk-on assets. #Bitcoin moved up quickly.#Altcoins are outperforming.
I think we'll see the continuation of a correction on commodities and a BIG surge on… pic.twitter.com/aw1YpD4BE2
However, any rebound above that threshold would signal renewed bullish strength and possibly halt the decline. For now, crypto markets are soaking up capital flowing out of traditional hedges.
Geopolitical Tensions Reignite Gold Bulls
Despite the technical breakdown, geopolitical tensions have bolstered short-term demand for gold. Over the weekend, U.S. airstrikes on Iranian nuclear sites triggered retaliatory attacks by Tehran, intensifying regional instability.
Iran’s threat to close the Strait of Hormuz, a vital oil transit route, has amplified fears of global energy disruptions. Oil prices spiked in response, sparking renewed concerns about inflation and supply chain pressures.
These developments reignited gold’s appeal as a safe-haven asset. Investors rushed back into the metal during Monday’s U.S. session, supporting prices just below $3,400. The fragile balance between geopolitical risk and technical pressure continues to shape short-term price movements.
Fed’s Policy Shift Adds Fuel to Market Dynamics
Adding to the complexity, comments from Federal Reserve Governor Michelle Bowman hinted at a possible rate cut by July. Easing inflationary pressures have opened the door for looser monetary policy, which would further weaken the dollar and potentially boost alternative assets. All eyes now turn to Fed Chair Jerome Powell’s testimony before Congress for more clarity.
