Gold reached a record high of $2,564 per ounce, marking a 10% quarterly gain. Meanwhile, Bitcoin (BTC), often called “digital gold,” fell 7% to nearly $58,000. The S&P 500 saw modest growth of 2%, but gold’s performance stands out, driven by central bank accumulation and favorable macroeconomic conditions.
Bitcoin’s Struggles Amid Gold’s Rise
While gold soared, Bitcoin struggled. Analysts point to various factors, including supply increases from government sales and reimbursements like those from Mt. Gox creditors. Central banks’ rising gold purchases also play a role, with 37 tonnes bought in July alone, the highest since January. In contrast, Bitcoin is facing supply pressure and net outflows from U.S.-listed spot exchange-traded funds (ETFs), which have seen a $1 billion reduction since August.
What’s Behind Gold’s Rally?
Experts link the surge in gold prices to a shift in monetary policy and lower real yields on U.S. government bonds. As yields drop, investors often rotate into riskier assets like Bitcoin and tech stocks. According to André Dragosch from ETC Group, the decoupling of gold from U.S. real yields hints at future economic changes. The European Central Bank has already cut rates, and the U.S. Federal Reserve is expected to follow, which could push Bitcoin and other assets higher.
What Does This Mean for Bitcoin?
Despite gold’s rise, not all analysts believe Bitcoin will follow suit. Alex Kruger, from Asgard Markets, cautions against drawing parallels between gold’s performance and Bitcoin. He emphasized that Bitcoin behaves as a risk-on asset, thriving when the economy heats up, while gold does better in colder, falling-rate environments.
