Gold Slumps to $4,550 While Bitcoin Holds Near $70K

TLDR

• Gold has fallen 15% from its late January high of $5,500 per ounce.
• The metal dropped 8% this week and reached a ten-week low of $4,550.
• Analysts said gold failed to act as a hedge during the recent war tensions.
• A stronger US dollar and higher Treasury yields reduced demand for gold.
• Bitcoin traded near $70,000 and maintained a sideways range since early February.

Gold prices tumbled this week as traders sold the metal during geopolitical tensions and tight liquidity conditions. The metal has dropped 8% so far this week and now trades 15% below its late January peak of $5,500 per ounce. Meanwhile, Bitcoin held near $70,000 as ETF inflows continued despite a recent six-month decline.

Gold Slides 15% From January Peak

Gold fell to $4,550 on Wednesday, marking a ten-week low, according to Gold Price. The decline places the metal firmly in bear market territory after a rapid sell-off. Traders reacted to a stronger US dollar and elevated Treasury yields.

Bloomberg analysts addressed the move in a Tuesday note. They wrote, “Gold was supposed to hedge the Iran war – instead it traded like everything else: down.” They added that liquidity pressures drove the broad decline across asset classes.

Bloomberg ETF analyst Eric Balchunas described gold as an “unreliable hedge” during short periods. He stated that the metal often shows little correlation with stocks over time. However, he said liquidity tightening can push it to behave like a risk asset.

Peter Schiff, a long-time gold advocate, maintained his bullish stance. He said, “If you were bullish on gold before the war, you should be more bullish now.” He linked the conflict to rising deficits and higher food and energy prices.

Schiff argued that the war could trigger recession and rising unemployment. He also cited collapsing stock, bond, and real estate prices. However, gold prices continued to fall despite those warnings.

CNBC reported that a stronger dollar dulled gold’s appeal. Elevated Treasury yields also reduced demand for the metal. As a result, sellers pushed prices sharply lower within days.

Bitcoin Holds $70,000 as ETF Inflows Continue

Bitcoin price traded around $70,000 and remained within a sideways range that began in early February. Price charts showed higher highs and higher lows during recent sessions. This pattern suggested resilience despite a 40% six month drop.

Balchunas reported that Bitcoin ETFs recorded $2.5 billion in inflows this month. He stated that the funds are “one good day away from completely digging out of their year-to-date flow hole.” He described the inflows as strong despite negative media coverage.

He compared current Bitcoin flows to past gold market behavior. He said that when gold fell 40% about ten years ago, one-third of investors exited. In contrast, Bitcoin ETFs retained steady inflows during the recent decline.

Balchunas said both assets remain unpredictable over short periods. He stated, “Both unpredictable but valid asset classes, and shouldn’t be judged based on short time frames.” His comments followed volatile trading across commodities and digital assets.

Spot Bitcoin prices continued to hover near $70,000 at press time. ETF flow data indicated continued institutional interest. Market participants monitored price action as volatility persisted.

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