One of the most interesting things happens with the gold price – it is being dumped as safe-haven. However, while that is nothing new when the end of a recession is in sight, this time is interesting because the dumping comes against another safe-haven asset – Bitcoin.
More precisely, the prices of gold and Bitcoin advanced during the coronavirus pandemic. Now that a possible vaccine is in sight, investors dumped gold. It fell a full $100 from the vaccine announcement at the start of the week and now trades at $1,860.
At the same time, Bitcoin only corrected horizontally before jumping above $16k. As such, the shift toward safe-haven continues, only investors reconsider the size of the portfolio dedicated to traditional or digital alternative investments.
Investors Shift to Digital Alternative Investments
Since PayPal announced the introduction of cryptocurrencies in its online payments platform, Bitcoin never looked back. It jumped from $10k to $16.3k at the time of this writing.
But the gold price reacts closely to the stock market moves and developments within the economy. The decoupling between the two alternative investment assets seems to increase as more and more investors favor Bitcoin instead of gold as a hedge against inflation.
The last one to support and endorse Bitcoin is Stanley Druckenmiller. In a recent interview, the legendary investor said that he fears inflation coming up in the United States in the next five to six years and Bitcoin as a store of value makes perfect sense.
Gold Price Bearish Continuation Pattern
In the meantime, while the price of Bitcoin advances, the price of gold trades with a bearish tone. This must come as a shock to “gold” fans, but two bearish technical patterns point to a move below $1,700. One is a bearish pennant and another one a head and shoulders. In both cases, the invalidation for a short trade is at $1,890, provided bears wait for a break at $1,850 first.
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Gold Price Short Term Forecast
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