The crypto and precious metals markets experienced a sharp sell-off this week, driven by escalating geopolitical tensions in the Middle East and a persistently hawkish Federal Reserve. Silver plunged below $55.50 to a 7.5-month low, gold shed over 3%, and both Bitcoin and Ethereum dropped by 2% and 3% respectively in a broad-based rout.
The immediate trigger came from Iran’s threat to shut the Bab el-Mandeb Strait, a critical shipping chokepoint for oil and goods. The disruption sent Brent crude futures soaring toward a 12% weekly gain, stoking renewed inflation fears. Higher oil prices reinforced expectations that the Fed will keep interest rates elevated, with officials including Chair Kevin Warsh and Governor Christopher Waller signaling that sticky inflation leaves no room for rate cuts. A stronger dollar added further pressure on dollar-denominated assets.
Gold and silver took a heavy hit. The largest US gold-backed ETF, GLD, recorded a historic $14.4 billion in outflows since March—50% more than the total Bitcoin ETF outflows since October. In March alone, investors pulled $8.5 billion. Silver’s breakdown below $55.50 marked a significant technical breakdown, with analysts eyeing $53 and $50 as next support levels.
The crypto market was not spared. Bitcoin saw $42.64 million in liquidations over 24 hours, with long liquidations surging 83.23%—a classic forced selling cascade. The broader altcoin market slid in sympathy. Adding to the uncertainty, the much-anticipated Crypto Clarity Act is now not expected to be signed into law this year, dashing hopes for a clear federal regulatory framework and keeping institutions on the sidelines.
The simultaneous crash across silver, gold, and crypto highlights how geopolitical risk and monetary policy are dominating all risk assets. Analysts note that gold may find support around $4,000, with some targeting a rebound to $4,500 by Q3, but the near-term outlook remains clouded by the ongoing US strikes on Iran and the strained Strait of Hormuz shipping lanes.
