Gold peaked at $3,385 and Bitcoin surged to $87,500 following Trump’s statement about wealth. The rally raises concerns over US dollar stability and Fed leadership changes. Analysts highlight that this synchronicity signals rising market uncertainty and a potential decline in the dollar’s value, though Bitcoin’s strong correlation remains with tech stocks rather than gold, indicating its evolving market role.
Gold and Bitcoin experienced significant rallies following Donald Trump’s statement on wealth and power, highlighting their relevance amid market uncertainty. Gold reached a peak of $3,385, while Bitcoin climbed to $87,500 during early Asian trading. This surge can be linked to concerns over potential shifts in Fed leadership and the overall stability of the US dollar.
Trump’s declaration via Truth Social, stating, “HE WHO HAS THE GOLD MAKES THE RULES,” reignited attention towards these assets. Analysts suggest that the driving forces behind these gains include US-China tensions and persistent economic uncertainty rather than solely Trump’s remarks. The Kobeissi Letter noted the rare simultaneous gains in both assets, hinting at a collective investor sentiment regarding increasing uncertainty and a possible decline in the US dollar.
The US dollar index plummeted to a three-year low amidst fears following comments from National Economic Council Director, Kevin Hassett, regarding potential changes in the Federal Reserve’s leadership. This speculation has prompted traders to sell dollars aggressively, causing Bitcoin’s rise to stand out from historical trends, as it typically declines when the dollar weakens.
The shift in Bitcoin’s performance during the dollar’s decline might indicate its evolving status as a store of value, diverging from its traditional correlation with tech sector risks. Despite apparent similarities, Franklin Templeton Digital Assets revealed that Bitcoin is still more closely aligned with tech stocks rather than gold, with a correlation coefficient nearing 0.7, compared to a mere 0.3 correlation with gold. This suggests a complex relationship between these assets, warranting careful observation moving forward.
