Gold Hits 7-Year High As Investors Jump into Safe Haven Assets But Bitcoin Not Following

The yellow metal is flying just like altcoins.

Gold hit a 7-year high as investors rush into the safe haven trade. On Thursday, gold rose to $1,621.60 per ounce, its highest level since Feb. 2013. The precious metal is on track for its seventh straight positive day and the eighth positive week in nine of 2020.

The deadly coronavirus outbreak has the investors fearing a slowdown in global growth and piling into safe haven assets like gold.

The concerns are proving to be true as Apple (APPL) announced that it would not be able to meet its revenue expectation for the current quarter, that was laid out on Jan. 28 and was already wider amidst the coronavirus outbreak.

Spreading beyond China Border

US investors’ optimism that the coronavirus will be short-lived is being challenged as the virus spread beyond China’s border. While the World Health Organization (WHO) said the number of new cases of infections in China continues to decrease, South Korea saw a spike in new cases and a larger spread of the COVID-19 across the US has also been registered.

11 of the 13 patients from the cruise ship in Japan have been tested for the novel coronavirus. This came at a time when seasonal flu is already at its peak in the US.

“This is the time to open up your pandemic plans and see that things are in order,” said Dr. Anne Schuchat, a top official of the Centers for Disease Control and Prevention.

“At some point, we are likely to see community spread in the U.S. or in other countries,” she warned.

US Dollar Higher while Risk Assets on Thinner Ice

These rising concerns are not only working in favor of gold but also the US dollar, pushing the greenback at its highest level in about three years.

“What is becoming clear is that the consensus that is being priced into risk assets is on much thinner ice,” said Ed Al-Hussainy currency analyst at Columbia Threadneedle Investments.

“The consensus (forecast) has a very solid recovery in earnings this year. That is coming under pressure from loss of demand in Asia and also the stronger dollar.”

While gold and dollar are surging, a sudden drop had both the S&P 500 and Nasdaq fall from their record highs, while Dow dropped 388 points after a sharp rise in coronavirus infections were noted at a single Beijing hospital.

Bitcoin follows the stock market

During this time, instead of going the gold route like a purported safe haven, bitcoin is following the lead of the stock market.

Gold printed a 7-year high yesterday. Will bitcoin open an era of digital commodities trading desk in the years to come? pic.twitter.com/jJCvy363BL

— skew (@skewdotcom) February 21, 2020

Late Wednesday, Bitcoin prices took a fall from about $10,300 to nearly $9,400, which has been the day after the digital asset surged $650.

Gold moves slow but it's in a bull trend. It broke the all time highs into new price discovery on most currencies such as GBP, EUR and CAD. Imo, only a matter of time before it breaks a new USD high.
Pitting $GOLD against $BTC is stupid and immature when you can own both. https://t.co/hn0oRRiYyy

— ฿TF%$D! (@CryptoHustle) February 20, 2020

Economist and trader Alex Kruger says correlation of prices is not the key rather returns is as the correlation between the bullion and the digital asset get severed because of a sharp rise in gold while Bitcoin is down.

Currently, BTC/USD is trading at $9,730, in the green by just 1.52%, however, the digital asset is still up 32% year-to-date.