Gold Demand Skyrockets to All-Time High as Bitcoin Makes Uptober Comeback
In a surprising turn of events, global demand for gold has surged past $100 billion in the third quarter, reaching a historic peak. At the same time, Bitcoin has staged an impressive comeback during the last days of October, signaling a major shift among investors who view both gold and Bitcoin as safe havens amid economic uncertainty.
The rally in gold demand has seen a 5% increase to 1,313 tonnes, with prices soaring 34% this year alone to a record $2,788 per troy ounce. This surge has been driven by investors of all sizes, from individuals to institutions, who are flocking to gold as a hedge against volatile traditional markets and uncertain monetary policies.
The World Gold Council (WGC) has reported a significant uptick in demand for gold-backed ETFs, with inflows totaling 94 tonnes in the third quarter. Total investment demand for physical gold, including bars, coins, and fund backing, has doubled to 364 million tonnes, with wealthy families and institutional investors leading the charge.
On the other hand, central banks have reduced their gold purchases by 49% year-on-year to 186 tonnes, citing high prices as a deterrent. However, the prospect of interest rate cuts in Western economies could support gold’s value as a non-yielding asset in the future.
Meanwhile, Bitcoin has been quietly climbing towards another all-time high, despite lackluster retail interest. Retail investors have shown little enthusiasm for the cryptocurrency, with search interest for “Bitcoin” at a mere 23 out of 100 compared to previous peaks.
Although retail interest in Bitcoin remains subdued, larger investors have been driving the market, with whales outpacing retail traders throughout the year. Retail transactions fell to $326 million in daily volume in September, but analysts believe that sluggish retail activity often precedes price rallies in Bitcoin.
In Europe, Bitcoin has seen a resurgence against fiat currencies, with the cryptocurrency breaking its March ceiling in the BTC/EUR trading pair. This trend highlights Bitcoin’s appeal as a hedge against weakening fiat currencies, although it has yet to outpace gold in terms of stability.
As Bitcoin continues to battle fiat weakness and strive for price stability, investors are closely watching its performance against traditional assets like gold. The ongoing dynamics between gold and Bitcoin reflect a broader trend of investors seeking safe havens in the face of economic uncertainty.
Overall, the simultaneous rise in gold demand and Bitcoin’s Uptober comeback underscore the evolving landscape of investment choices in a rapidly changing global economy.
Source: https://www.cryptopolitan.com/gold-hits-demand-bitcoin-uptober-rally/
