Gold Price Surges Past $4,000 as Bitcoin Dips on Strong Dollar Index Rally

Bitcoin (BTC) and gold (XAU) have shown divergent price movements in the past 24 hours, with BTC facing downward pressure from a strengthening U.S. dollar index. The leading cryptocurrency dropped 2.4% to $121,340 after failing to break through key resistance above $126,000 earlier this week, according to CoinDesk data. Meanwhile, the CoinDesk 20 Index declined over 4% to 4,186 points. The dollar index (DXY), which tracks the greenback against major fiat currencies, rose to 98.90 - its highest level since August 5th. Typically, DXY strength creates headwinds for USD-denominated assets like BTC and gold. Technical analysis suggests Bitcoin could see further declines toward $118,000 support levels. While Bitcoin's rally stalled, gold achieved a historic milestone by surpassing $4,000 per ounce for the first time ever. According to ING analysts, this rally is driven by massive inflows into gold-linked exchange-traded funds (ETFs). Gold ETF holdings reached their highest level since September 2022, with potential for further growth as current totals remain below 2020 peaks. Gold's price has doubled over two years, fueled by central bank diversification away from the U.S. dollar, aggressive trade policies, and geopolitical tensions in Ukraine and the Middle East. Gold-backed tokens including PAXG and Tether Gold (XAUT) also breached $4,000, with the total market capitalization of gold tokens exceeding $3 billion.