Gold surged past the $4,100 mark on Monday as a sharp pullback in oil prices and renewed US-Iran diplomacy eased fears of another aggressive Federal Reserve rate hike, creating a risk-on ripple that lifted Bitcoin and broader crypto markets. Spot gold rose 1.4% to $4,110.56 an ounce, while US gold futures added 1% to $4,112.10. The dollar index slipped 0.3%, making bullion cheaper for foreign buyers and signaling a softer greenback — a typically bullish cue for Bitcoin.
The immediate trigger was a 5% slump in Brent and West Texas Intermediate crude after Washington paused its bombing campaign and Tehran indicated it would reciprocate. Lower oil prices reduce the threat of a near-term inflation shock, weakening the case for the Fed to raise rates again. Since Bitcoin often trades as a speculative store of value and shares an inverse relationship with real yields, the shift in rate expectations directly supported the digital asset.
Analysts noted that Monday’s combination of cheaper energy and a softer dollar created a supportive backdrop for gold — and by extension, Bitcoin. With the CME FedWatch Tool showing an 80% probability of at least one rate increase by September, the de-escalation in the Middle East has bought the Fed breathing room. Still, the rally remains fragile; any renewed disruption in the Strait of Hormuz or Red Sea could quickly reverse oil’s decline and revive pressure on bond yields.
The Federal Reserve’s two-day policy meeting begins Tuesday, with a decision due Wednesday. Markets overwhelmingly expect a rate hold, but the focus is on whether Chair Jerome Powell signals a September hike. A dovish tone would further weaken the dollar and likely propel Bitcoin above key resistance levels, while a hawkish signal could cap gains. The precious-metals complex rallied broadly, with silver up 2.8%, platinum 2.6% and palladium 2.1%, underscoring the real-asset bid that often spills over into Bitcoin.
For crypto investors, the macro picture is unusually constructive: easing geopolitical risk, falling energy costs, a weakening dollar, and a potential pause in rate hikes all align to support Bitcoin’s price. Yet the crypto market will likely take its cues from the FOMC’s forward guidance. Until then, Bitcoin’s correlation with gold may hold firm, with both assets riding the dual waves of dollar softness and Fed caution.
