Gold Prices Amid Iran vs Israel Conflict, Affected Like Crypto Market?

Amid escalating tensions between Iran and Israel, global markets braced for volatility. But with a sudden ceasefire now in place, gold prices have reacted by sliding to their lowest level in nearly two weeks. 

While geopolitical risks usually trigger a flight to safe-haven assets like gold, this time, the precious metal seems to be losing its defensive appeal—much like how certain cryptocurrencies have responded to global unrest. So, is gold still a safe hedge, or is its behavior becoming more like the volatile crypto market?

READ ALSO: How to Buy Gold (GOLD)

Gold Drops Despite USD Weakness 

On Tuesday, gold (XAU/USD) maintained a downward trend during the early European session, even as the US Dollar weakened for a second consecutive day. Mixed US PMI data and dovish comments from Federal Reserve officials are fueling speculation of a rate cut as soon as July, weakening the USD. Yet, gold hasn't rallied. This divergence is confusing to some investors who expect USD down = gold up.

Ceasefire Cools Safe-Haven Appetite 

US President Donald Trump announced a ceasefire agreement between Iran and Israel, signaling an end to immediate escalation. While that news was initially market-positive, reports of continued Israeli strikes added uncertainty. Still, investor appetite shifted toward risk-on assets, reducing demand for traditionally defensive holdings like gold.

Fed Rate Cut Speculation Supports Mild Bounce 

Despite gold's drop, dovish tones from Fed officials like Michelle Bowman and Christopher Waller are providing some support. The likelihood of a rate cut in the next FOMC meeting (July 29-30) remains high, helping stall a steeper decline in gold prices. Investors now await Fed Chair Jerome Powell's upcoming testimony for clearer guidance.

READ ALSO: FOMC Meeting Forecast: Can Crypto Keep Its Rebound Going?

Market Outlook: Between Geopolitics and Fed Policy 

Technical analysis suggests that gold could fall further if it breaks below $3,300. However, a rebound above $3,370 could trigger renewed buying interest. Oscillators and moving averages point to seller dominance for now, but economic data and Powell's comments may shift momentum.

Is Gold Acting Like Crypto? 

The recent pattern of gold responding less predictably to global conflict mirrors some characteristics of the crypto market, where sentiment, speculation, and external narratives often outweigh fundamentals. However, gold still benefits from macroeconomic uncertainty, especially when central banks hint at looser monetary policy.

Conclusion 

The Iran-Israel ceasefire has taken the edge off geopolitical tension, and with the USD weakening, gold’s failure to rally raises questions about its evolving market behavior. Is gold losing its role as a safe haven, or is it simply pausing before another surge? As the Federal Reserve leans dovish and geopolitical risks remain unresolved, the yellow metal's next move may come down to Powell's testimony and investor belief in its traditional value.

READ ALSO: Iran’s Top Crypto Exchange Suffers Major Hack, Millions Lost

FAQ

1. Why did gold prices drop after the Iran-Israel ceasefire? 

Risk-on sentiment returned, reducing the demand for safe-haven assets like gold.

2. Does USD weakness usually help gold prices? 

Yes, a weaker dollar typically supports gold, but other factors like geopolitical calm can offset that impact.

3. Could gold fall below $3,300 soon? 

If selling pressure continues and no new risk catalysts appear, gold may retest the $3,300 support level.

4. Is gold acting like crypto in 2025? 

In some ways, yes. Gold’s price movements now reflect faster sentiment shifts, similar to how crypto reacts to news and macro trends.

5. Where can I buy gold-backed crypto or stable assets? 

Bitrue offers a secure way to explore gold-pegged digital assets and stablecoins via its trading platform.