Gold Surges Past $5,400 as Bitcoin Lags, Raising Questions About “Digital Gold” Narrative

Gold prices exploded higher on Wednesday, accelerating an already powerful bull market as the precious metal surged more than 6% to break above $5,400 per ounce for the first time in history. The rally cemented gold’s status as one of the top-performing assets of the past year, with gains now exceeding 90% on a 12-month basis. While silver and platinum recorded even larger percentage jumps, gold’s sheer size — with an estimated market capitalization near $40 trillion — made it the undeniable standout.

A significant catalyst for the move came after comments from Federal Reserve Chair Jerome Powell during a post-meeting press conference. The Fed held its benchmark federal funds rate steady at 3.50%–3.75%, a widely anticipated decision. When asked directly about the sharp rise in gold and silver prices, Powell urged caution, saying investors should not read too much into the rally from a macroeconomic perspective. He rejected claims that the surge reflected a loss of confidence in the Federal Reserve, emphasizing that inflation expectations remain well anchored and that the Fed’s credibility is intact. Market participants, however, appeared unconvinced, as gold prices continued to climb following his remarks.

Bitcoin, often described as “digital gold,” painted a starkly different picture. BTC traded in a tight range throughout the session and slipped modestly after the Fed announcement, hovering around $89,000 and ending the day roughly flat. Other major cryptocurrencies showed similarly muted performance, underscoring a growing divergence between crypto markets and traditional safe-haven assets.

U.S. equities were also largely unchanged as investors waited for earnings reports from major technology companies, including Microsoft, Meta, and Tesla.

The contrast between gold and bitcoin has reignited debate about BTC’s role as a macro hedge. Despite common tailwinds such as a weaker U.S. dollar and heightened geopolitical risk, bitcoin has struggled to keep pace. According to James Harris, CEO of Tesseract Group, the current environment reflects a market regime where crypto is underperforming the very assets it was designed to rival. He suggests gold’s rally represents both a repricing of geopolitical and fiscal risk and a partial reclaiming of market share from bitcoin, challenging the digital gold narrative.