Bitcoin (BTC) rose to $81,165 during trading, but then corrected to the $80,792 level, showing a gain of about 4.5% over the day. On the same day, gold reached a price high not seen in more than three months.
Both assets are showing synchronized growth, and the reasons are obvious: the weakening of the US dollar and falling Treasury yields are redistributing capital into both the safe-haven metal and digital assets. Investors are closely watching for signals that could indicate the future direction of interest rates.
Gold Updates Highs, Outpacing Decades of Dynamics
On Tuesday, gold in the spot market rose by 0.6%, reaching $4,677.19 per ounce. This is the best reading since mid-May. Since the beginning of the month, the value of the precious metal has increased by about 13%. Gold futures also rose to a three-month peak, approaching the $4,720 mark.
Such dynamics have not been observed since September 1999, when a group of European central banks agreed to limit gold sales, halting the prolonged price decline. Today, the drivers are completely different: the market is reacting to the weakness of the American currency and growing doubts about the independence of the Federal Reserve System, rather than to actions by regulators in the metals market.
Dollar and Yields: Key Triggers of the Rally
The US dollar index has fallen by 0.8% since the beginning of the month, making gold and other dollar-denominated assets more accessible to foreign buyers. Government bond yields remained high for most of August, but due to the buyback program, they declined by about 3 basis points over the month. This slightly reduced the cost of holding gold, which does not generate interest income.
Bitcoin is moving along the same trajectory. Last week, the cryptocurrency's price failed to hold above $80,000 and pulled back, but then the coin quickly recovered and continued its upward movement. Recently, there has been increasing confirmation that bitcoin's reversal upward relative to gold is a sign of the end of the bear market in digital assets.
Today, the focus is on Federal Reserve Chairman Kevin Warsh's speech at the annual symposium in Jackson Hole. Typically, at this meeting, heads of regulators provide signals about future monetary policy. Hawkish rhetoric could slow the rally in gold and bitcoin, while an unexpectedly dovish tone, on the contrary, could trigger so-called "debasement trading" due to new doubts about the sustainability of US debt.
Bitcoin's reaction to Fed signals this week is not yet obvious: historical data shows that BTC does not always follow the movements of traditional safe-haven assets, even when macroeconomic conditions align. Currently, both markets are pricing in similar risks, and the regulator's next move will determine whether the rally continues or a correction ensues.
My view: the synchronized movement of bitcoin and gold is a marker of a shift in the market paradigm. If gold is updating highs amid doubts about fiscal discipline, then bitcoin is increasingly establishing itself as a full-fledged macro asset. However, investors should remember that in moments of high volatility, the correlation between these assets can quickly break down.