What Does The Recent Gold Price Rally Mean For Bitcoin And Its Future Value?
Even though Bitcoin has been having a good bull run for the past 3 months, Gold also had a good June. The price of gold in the international markets reached its highest ever from 2013. But there are signs of further growth unlike in 2013.
Gold’s rally now appears to be in a progressive state as large volumes of currency across the world is being channeled to exchange-traded funds which has been advanced by a volatile political situation where investors are seeking gold for shelter. The strengthening of gold is a major consequence for the weakening dollar in the international markets.
Now, the yet-unresolved trade dispute with China, rising tensions in the Middle East and negative debt yields around the world are all also providing fuel for gold’s rally. The same follows for Bitcoin.
Chris Weston, head of research at Pepperstone Group Ltd. said:
“The old cliche of putting 5%-10% of your portfolio in gold is something that we’ve been advocating for some time and that allocation could probably be taken up a little bit there.”
Weston shows support for both Bitcoin and Gold as plays with strong inverse correlation to the fed-funds rate and the global pool of negative yielding debt. He thinks that after all these years, the time is now when Gold has made a comeback.
“Can you actually genuinely pick a G-10 currency that you say that’s really attractive right now? I don’t think you can, and I think gold’s been working as that kind of best house in a pretty shabby-looking neighborhood.”
We can see both these assets being used as a reserve for most fiat currencies as we head towards a global economic slowdown. Gold performing well is always a welcome news for Bitcoin investors.