Gold continues to shine, at $ 3,400 per ounce. A good omen for Bitcoin who will sooner or later inherit this fortune.
In short
- The gold remains a solid increase of +26 % in 2025, outclassing the majority of assets.
- The central banks rush to gold by rejection of the hegemony of the dollar.
- Bitcoin is positioned as the logical successor of gold, especially if the United States makes it their currency.
Gold takes the lead in 2025
Gold is experiencing a new splendor. + 26 % since January 1. Conversely, the US scholarship abandons 10 % while Bitcoin is down 6 %.
To tell the truth, gold has been doing well since the start of the war between Russia and Ukraine (2022). It surpasses all the main asset classes except Bitcoin.
Bitcoin annualized performance on 3, 5 and 10 years is 22 %, 67 % and 30 % respectively, while gold displays only 17 %, 14 % and 10 %
Two major factors influence the price of gold: inflation and interest rates. These two factors can be combined in a single factor called the actual rate.
For example, if the booklet A reports 5 %while inflation is 5 %, the actual rate is 0 %. If inflation is 2 %, the actual rate (or real yield) is 3 %, etc.
When inflation is high and central banks also maintain low rates, investors tend to turn to refuges values such as gold (and bitcoin).
The good performance of gold is not surprising as inflation is painful. Cumulated, we have been 23 % in the United States since 2020. The drop in purchasing power is similar in Europe.
To this inflation is now added major geopolitical tensions which will still exacerbate inflation, at least in the United States. Inflation forecasts to one year have gone to 6.7 %, the highest level since November 1981…
The end of petrodollar
Inflation is no longer the main factor behind the surge in the price of gold. In question, the high demand from central banks.
It has been three years since their gold purchases exceeded 1,000 tonnes per year, much more than the average levels observed during the previous decade. This means that central banks swallow almost a third of global gold production, unheard of World War II. China is a big customer, as well as Poland, Turkey or even India.
For what ? Because we are at the dawn of a new Bretton Woods. The BRICS no longer want the dollar and this distrust is not new. It dates back to the 2008 crisis, when the Western central banks began to finance their debt by the quantitative EASING).
Since then, China no longer considers the greenback as a reserve of value. Its reserves in dollars have almost half melted, going from 1,200 billion to $ 760 billion. The recent freezing of 300 billion euros belonging to Russia and customs taxes have arranged anything.
However, if the exporting nations refuse to place its commercial surpluses in US treasury bills, the United States will not be able to maintain an annual trade deficit of $ 1,100 billion. Not to mention the 8,500 billion that they already owe to the rest of the world:
In other words, we will soon need a new international reserve currency. This is why gold is on the rise.
Gold vs Bitcoin
Unfortunately for the nostalgic for Gold Standard, Uncle Sam set his sights on Bitcoin.
Certainly, gold enjoys certain advantages, including that of having passed the test of time. It is also less volatile (around 30 % of the volatility of Bitcoin) and is not associated with a technical risk (Bitcoin is software).
For the rest, Bitcoin has the advantage and members of the US government have understood this …
If it is one thing that most investors know bitcoin, it is that its offer is capped at 21 million units (which 94 % are already in circulation). It is already created twice as much gold as Bitcoins (compared to the existing stock).
Clearly, gold production continues to increase while BTC's supply decreases in half all four years. An image is worth a thousand words:
There is also no reason to think that gold extraction would be about to cap. Especially since the energy transition requires a lot of copper and silver from which ores often come with gold.
Finally, Bitcoin is a reserve of value at the same time as a payment system, two-in-one. It is possible to pay in bitcoins, which is much less true with gold. International transfers are also much cheaper and much faster.
Bitcoin is promised to a bright future if the American Empire in fact declining its reserve currency. Especially if the gold reserves are sold to accumulate more. A text of law (Bitcoin Act) offering to acquire a million BTC currently circulates in the spans of the congress …
The timing is perfect if you thought to separate from your gold to accumulate more BTC.
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