Bitcoin and Gold Prices Once Again Correlate, What’s It Mean For The Most Popular Digital Asset?
- Bitcoin and gold seem to be inversely correlated
- Bitcoin price dropped and gold surged during the last few days
Bitcoin is currently falling again and gold is growing. The price increase in precious metal is closely related to the trade tensions between the United States and China. Meanwhile, the digital currency is falling after a surge above $9,000 a few days ago.
Bitcoin Falls While Gold Surges
Gold started to move upwards when it was traded close to $1,275 per Oz on May 30 and it grew up to $1,344 per Oz on Wednesday. This is the highest level since February 20 for the safe haven asset.
There has been an inverse relationship between gold and Bitcoin since November 2018. Indeed, the digital currency dropped from $6,000 and reached $3,100 in December. Meanwhile, gold went from $1,200 to $1,300 and reached $1,346 in February.
Later in May, Bitcoin was trading close to $5,500, which represented an increase of 76 percent since December. Gold fell 6 percent since February highs, showing that there was an inverse price movement between Bitcoin and gold.
Although they are inversely correlated, there is no way to prove that the price movement of one has an influence on the other. Indeed, being correlated does not imply causation. Moreover, the price increase of gold could also be related to the Fed cutting rates in July. Additionally, the FED is also thinking about three cuts for this year.
Additionally, Bitcoin seems to be falling due to the fact that it moved from $4,000 in April to over $9,000 a few days ago. After such a large increase, the most popular digital currency experienced a price drop.
That being said, it will be interesting to see if Bitcoin will drop when gold starts falling or vice-versa. Nonetheless, the price of each asset is not linked to each other and they operate independently from one another.