Gold Skyrockets Above $2,000 Amid Fears of Regional Escalation in Israel-Hamas War; Bitcoin Surges

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Last Updated on: 7th November 2023, 07:50 pm

Yesterday we reported on gold’s multi-week bull market, causing the yellow metal to break above the $2,000 mark for the first time since May. This comes on the heels of the Israel-Hamas war, which has been ongoing since Hamas’ terrorist attack on Israel committed on October 7th. 

At the same time, Bitcoin and Ethereum have also seen excellent growth over the past few weeks. Beginning on October 22, Bitcoin rallied from $29,900 to $34,900 as of this morning, representing a total price increase of +17% in only nine days. 

Ethereum, the second-largest cryptocurrency by market capitalization, has seen a similar growth trajectory. As of today, Ethereum is trading at $1,815—about +16% higher than it was on October 19 ($1,567 per token). 

Meanwhile, the stock market is down. The S&P 500 index is currently trading about 3.25% lower than it was when markets opened on October 7. 

Market Snapshot: November 1, 2023

• Inflation Rate: 3.7%
• Fed Rate: 5.33%
• Gold Price: $1,993/oz.
• Silver Price: $22.84/oz.
• Bitcoin Price: $34,809/oz.
• Ethereum Price: $1,815/oz.

The recent success of the alternative asset market indicates, yet again, that precious metals and cryptocurrencies can serve as portfolio hedges during times of instability. We saw explosive growth in both asset classes during the 2020 coronavirus crash, and precious metals markets greatly outperformed the stock market during the global financial crisis, the dot-com crash, and even during the Gulf War of the 1990s. 

Whether gold and other precious metals will continue to rise in value will largely depend on the regional spread of the Israel-Hamas conflict. If neighboring powers join the combat operations, including Iran and Hezbollah, then we could see a surge in capital flight from risk assets into “safe-haven” stores of value such as gold. 

War in the Middle East, however, is not the sole driver of the markets. The major bump in the cryptocurrency market arrived after Ethereum successfully underwent a hard fork earlier in the year. 

The hard fork, which updates the cryptocurrency’s underlying blockchain protocol, is nicknamed “Shapella”. The update affects all Ethereum transactions to render the cryptocurrency more efficient and to give blockchain validators the ability to withdraw their funds on demand. 

For Bitcoin, a halving event is set to take place soon, which has sparked renewed interest in the cryptocurrency that has been out of the spotlight for some time. The blockchain halving is supposed to cut mining rewards in half, thereby making it unprofitable for inefficient miners to remain active on the network. 

These long-awaited updates to Bitcoin and Ethereum have generated a lot of buzz for the two cryptocurrencies—public interest that could translate into a long-term bull market. 

With precious metals and cryptocurrencies back in the green and the stock market on the decline, more and more investors are turning to alternative assets. 

For the latter asset class, institutional and retail investors alike are responding positively to hard forks and halving updates that are making the two top cryptocurrencies more sustainable. For precious metals, on the other hand, investments into gold are largely the result of investors seeking a safe haven amid geopolitical conflict. 

If you’re considering taking a position in gold, silver, or cryptocurrency, make sure you read our exclusive reviews of the top gold and crypto IRA companies. These vetted service providers offer everything you need to invest in alternative assets within a low-cost, tax-advantaged account structure.