The precious metal is losing its safe-haven status to Bitcoin, the relatively new digital asset, as it settled at its lowest price level since December 14, 2020.
What you should know: Gold spot prices closed at $1,849, printing losses of 3.39% at its last trading session.
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The recent surge in the U.S. Dollar Index is weighing on gold prices, not forgetting Bitcoin that has attracted recorded inflows as it hits a new record high, is more likely stealing some of the global investors’ buying interest that would have in the past been directed to gold and other precious metals.
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- The world’s flagship crypto, Bitcoin impressive gains partly responsible for seeing massive investors outflows from another popular inflation hedge gold.
- The safe-haven asset had been in the past been surging with Bitcoin, which is up over 40% from $28,000 sighted last week.
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The bearish macro of very little risk aversion in the marketplace at present is “working against gold amid massive gains seen in global stocks
In a recent tweet seen by Nairametrics, Charlie Morris, founder, and CIO at ByteTree Asset Management said that the price correction in the yellow metal might be attributable to investors moving to Bitcoin;
- “With bond yields up and inflation expectations down today, gold has taken a hit. This justifies a $50 sell-off, but the price is down to $120. I’d attribute the excess to flows moving towards Bitcoin.”
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With bond yields up and inflation expectations down today, #gold has taken a hit. This justifies a $50 sell off, but price is down $120. I'd attribute the excess to flows moving towards #Bitcoin pic.twitter.com/qsWBb8NaXA
— Charlie Morris (@AtlasPulse) January 8, 2021
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However, a highly revered gold investor, Petter Schiff kept his hopes on the bullion asset, based on the prevailing narrative that the global economy wasn’t out of the woods yet;
- “Recent weak economic data on jobs is causing investors to buy risk assets and sell safe-havens like #gold. The weaker the economy gets the more money the Fed prints to prop it up. So, the real risk is inflation, and once investors understand this, they will seek safety in gold.”
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Today’s weak economic data on jobs is causing investors to buy risk assets and sell safe-havens like #gold. The weaker the economy gets the more money the Fed prints to prop it up. So, the real risk is #inflation, and once investors understand this, they will seek safety in gold.
— Peter Schiff (@PeterSchiff) January 8, 2021
