/latest/2020/07/bitcoin-breaks-above-10300-for-first-time-in-8-weeks-gold-breaks-all-time-high/
Bitcoin Breaks Above $10,300 for First Time in 8 Weeks, Gold Breaks All-Time High
Around 02:25 UTC on Monday (July 27), the gold price made a historic move, reaching $1,922.36 an ounce, which means that it had broken above its all-time high (ATH) of $1,920.94, which had been set on 1 September 2011, as you can see from the one-day and the all-time price charts shown below:
Currently (as of 7:10 UTC on July 27), spot gold is trading at $1,934.12.
According to a report by Kitco News, Marc Chandler, chief market strategist at Bannockburn Global Forex, said:
“It is difficult to talk about resistance in never-before-seen prices, but if our view of interest rates and the turn in the dollar cycle is fair, then $2,500 might not seem unreasonable.”
Steven Dunn, head of exchange-traded products at Aberdeen Standard Investments, told Kitco News:
“The combination of escalating U.S.-China tensions and enduring fears about the economic impact of the coronavirus pandemic have provided plenty of fuel for this surge, and neither seem likely to dissipate in the near term… As investors continue to face volatility and uncertainty, the appeal of safe-haven assets like gold and silver will only increase.”
Afshin Nabavi, head of trading with MKS (Switzerland) SA, recently told Kitco News:
“Everywhere you look, the world is a mess and that is going to drive gold prices higher.”
According to data from CryptoCompare, less than 90 minutes after gold had broken its ATH, Bitcoin, the cryptoasset that many refer to as “digital gold”, surged past $10,300, a level last seen on June 1, as you can see from the one-day and three-month price charts shown below:
So, what is the reason for the rallies that gold and Bitcoin are currently having?
Well, we can’t be certain, of course, but here are some plausible explanations:
- The worsening COVID-19 situation in the U.S. (CNBC says that Friday marked “the first time since late May the daily death toll totaled above 1,000 for four consecutive days”).
- Escalating tensions between the U.S. and China as the result of trade disputes, China’s handling of the COVID-19 pandemic back in January/February, and China’s stance towards Hong Kong.
- Negative “real” yield on the U.S. 10 Year Treasury Note.
- Weakening of the U.S. dollar.
