Gold Surges 3.5% on India-Pakistan Tensions, Crypto Steady

Geopolitical tension between India and Pakistan has rattled global markets once again, driving investors toward traditional safe havens. Gold prices jumped more than 3.5% over the weekend, reaching a two-month high of £1,935 per ounce, as traders scrambled for protection amid escalating border clashes and political uncertainty.

The sudden spike comes after reports of renewed military exchanges near the Line of Control (LoC), prompting fears of broader instability in South Asia, a region already under economic strain. While gold remains the go-to haven, the rally has also rekindled debate over the role of Bitcoin and crypto assets in times of geopolitical stress.

Why Gold Is Rallying Again

Gold’s latest rally is a textbook example of market flight to safety. Historically, during moments of heightened geopolitical risk, investors retreat from risk assets and pour into stores of value like gold, the US dollar, and sovereign bonds.

On Saturday, global bullion markets reacted sharply to media reports suggesting the mobilisation of additional troops and diplomatic breakdowns between New Delhi and Islamabad. The London Bullion Market Association (LBMA) reported a sharp uptick in volume, with spot gold briefly touching its highest level since February.

“Gold’s rally is being fuelled by fear,” said Anika Shah, commodities analyst at VolteX. “Whenever conflict escalates, gold shines quite literally.”

What This Means for Bitcoin and Crypto

Interestingly, Bitcoin held firm during the same period, trading steadily above $96,000, with modest inflows into Tether (USDT) and Ethereum (ETH). While BTC is often referred to as “digital gold,” its role during geopolitical shocks remains inconsistent primarily due to its volatility and speculative appeal.

“Bitcoin has yet to become a true flight-to-safety asset,” said David Cole, chief economist at CryptoInsights. “But the fact that it didn’t sell off in this round of tension is telling.”

Data from Glassnode shows a rise in wallet activity and exchange outflows, suggesting that long-term holders may view the current macro environment as an accumulation opportunity.

Other Safe-Haven Movements

• The US dollar index (DXY) rose 0.8%, reflecting demand for liquidity.
• 10-year UK gilts and US Treasury bonds saw inflows, pushing yields lower.
• Silver climbed 2.1%, with platinum also edging higher due to supply concerns.

Meanwhile, equities in Asia and emerging markets fell, particularly stocks with exposure to Indian and Pakistani financial sectors.

Conclusion: More Volatility Ahead?

Markets may remain volatile in the short term as tensions between India and Pakistan continue to escalate. For now, gold has reclaimed its place as the default hedge, but Bitcoin’s steady behaviour may signal its growing maturity as a digital counterpart in the world of macro trading.

Investors should brace for potential volatility and remain cautious about overexposure to regional risk.

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