Against a backdrop of Bitcoin surpassing its previous 2021 high, the price of gold also reached an unprecedented high on March 5, reaching $2,140 per ounce. This increase of 4.97% in one week for the global safe haven sounds the alarm regarding a possible excessive easing of monetary policy.
After Bitcoin, gold reaches historic highs
On Tuesday, March 5, an ounce of fine gold reached $2,140, establishing a new historic record, marking a significant increase of almost 5% compared to the previous week. Over the last six months, gold has increased by more than 11% against the greenback.
Despite this new high, gold’s fluctuations remain modest compared to Bitcoin’s spectacular surge in 2024. Since January, BTC has climbed 48% while gold has only advanced 3.2%.
For Peter Schiff, spearhead of pro-gold investors, this surge sends a warning signal to central banks. “ When gold hits a record high, it means monetary policy is too loose“, he insisted.
Schiff predicts that far from tightening rates, Jerome Powell could even raise further cuts before Congress. A prospect which, according to him, will only fuel the rise in gold prices and inflation.
Supremacy of Gold over BTC… For how long?
In analysis detailed, Jim Bianco highlighted a record divergence between the price of physical gold and the flows of the main dedicated ETFs such as the SPDR Gold Shares (GLD) or the Ishares Gold Trust (IAU).
“ Demand from non-ETF investors is stronger than sales of these index funds“, underlines the macroeconomics specialist. An extremely rare dynamic which had not been observed for 20 years according to Bianco.
Certainly, gold remains anchored in its centuries-old status as the safe haven par excellence. But the precious metal can also boast an XXL market capitalization of more than 14,000 billion dollars. A level much higher than that of Bitcoin, valued at 1,230 billion.
In the long term, however, the balance of power could well be reversed. While the ounce of gold has “only” increased by 65% in 5 years against the greenback, Bitcoin has soared by 1,496% over the same period! Enough to fuel the heated debate between supporters of “new” and “old” safe havens.
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