Gold just set a new record price today, September 20, above $2,600 (USD) per ounce. This movement shows differences in the behavior of stocks and bitcoin (BTC).
With this movement, The price of gold continues its trend of reaching new historical highs this yearThis can be seen in the following graph.
This milestone comes one day after the S&P 500 (SPX) index, which compiles the shares of the top 500 companies listed in the United States, set a new price record.
Meanwhile, although bitcoin is still 15% away from its all-time high, which it reached six months ago, it has seen a rise in the week. Although so far this day, like stocks, it has seen a slight correction, as seen below.
These movements They occur two days after the Federal Reserve (Fed), the United States Central Bank, lowered interest rates for the first time in more than four years. The reduction was 50 basis points, marking the beginning of a phase of cuts, something to which the markets in general reacted with an upward reaction.
Cutting interest rates lowers the cost of borrowing, increases liquidity and lowers Treasury bond yields. This monetary policy therefore encourages capital to flow into the markets. However, it is also a measure that demonstrates the need to boost the economy, and therefore reflects a sign of weakness.
The current monetary policy shift comes amid a slowdown in the labor market in the economic powerhouse that is raising fears of recession. According to businessman and presidential candidate Donald Trump, the leader of the Republicans, the size of the rate cut shows that the economy is very bad.
“This round of rate cuts will not only fail to prevent a cooling economy from entering a recession, but will also increase pressure on inflation, making the recession even worse,” considered economist and investor Peter Schiff. That’s why, according to his perspective, it’s time to buy gold.
Upcoming economic data looks key for markets
Gold has historically been an asset that investors turn to in times of crisis. and economic uncertainty, unlike the stock markets. In fact, central banks have been increasing their holdings of the metal, in anticipation of rate cuts that decrease the value of the dollar.
“The start of every Fed rate-cutting cycle over the past 25 years has boosted the price of gold,” said Thomas Fahrer, co-founder of the Heyapollo research platform. This can be seen in the following chart.
“Bitcoin will be the same, just more explosive,” Fahrer predicted, given the digital currency’s similarities to gold. Both have a limited decentralized issuance, which makes it easier for them to rise in price in response to demand.
In this sense, as CriptoNoticias reported, The next data to emerge on economic development could define the trend of bitcoin and other assets, such as gold and stock markets.
