Bitcoin Shows Resilience amid a Sharp Decline in Gold Market


Bitcoin, often seen as an alternative hedge against inflation and digital gold, has shown resilience amid the collapse of the precious metal market.

August 9, 2021, | AtoZ Markets – Gold plummeted 4.4% in Asian trading on Monday to its lowest level in more than four months. Global shifts are associated with strong data on the US labor market, published on Friday, where unemployment fell from 5.9% to 5.4%. This, in turn, could lead to an earlier increase in interest rates, which would negatively affect the opportunity cost of holding gold.

Gold is depreciating in Asian trading after a strong US unemployment report, which heightened fears that the Fed will limit stimulus measures,” said ANZ Research.

In addition, the published statistics allowed increasing the yield on 10-year US government bonds, which negatively affected the attractiveness of gold as a hedge against inflation. At the same time, the dollar index reached its highest level in two weeks.

Analyst Eric Falkenstein notes that someone sold 24,000 gold futures contracts today, dropping the price by $100 within a couple of minutes. Gold hit $1,684.37 during trading, the lowest since March 31, before recovering partially, but still remains below $1,750, which could serve as a bearish signal.

Bitcoin Shows Resilience amid a Sharp Decline in the Gold Market

Bitcoin has shown resilience amid gold price collapse

Bitcoin, often seen as an alternative hedge against inflation and digital gold, has shown resilience amid the collapse of the precious metal market but continued to decline over the following hours.

Read also: Gold Seems To Have Bitcoin as a New Competitor – CME Chief Economist

The cryptocurrency is currently trading at $43,800, close to the local highs that it managed to reach for the first time since mid-May.

Bitcoin is currently the equivalent of 25 ounces of gold, down 28.5% from the April high of 35 ounces, but still well above 15.5 ounces at the start of the year.

“Someone staged a 51% attack on gold?” Kevin Zhang, vice president of the mining company Foundry, writes in connection with today’s events.
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