Key Takeaways
- Gold prices have surged past expectations due to a weakening dollar and falling Treasury yields.
- Bitcoin is expected to follow gold’s price trend despite a current negative correlation.
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Rising geopolitical risks and the upcoming US presidential election are pushing investors towards traditional safe-haven assets like gold, while Bitcoin faces selling pressure amid Middle East conflicts, in particular with the recent tensions between Israel and Iran.
J.P. Morgan analysts suggest increasing global tensions and November’s US election are reinforcing what some call the “debasement trade,” favoring both gold and bitcoin as hedges against currency devaluation. However, recent market movements show diverging paths for the two assets.
“Rising geopolitical tensions and the coming US election are likely to reinforce what some investors call the ‘debasement trade’ thus favoring both gold and bitcoin,” J.P. Morgan Global Markets Strategy analysts stated in a note on Thursday.
Gold prices have surged in recent weeks, approaching $2,700 per ounce on September 26. The analysts attribute this rise to a 4-5% decline in the dollar and a significant drop in real US Treasury yields. However, gold’s appreciation has exceeded what these factors alone would suggest, indicating renewed interest in the metal as a safe haven.
CryptoQuant highlighted historical trends where lower US Treasury yields correlated with rising gold prices. “In 2008, as the 13-week Treasury…
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