Gold is soaring while Bitcoin – digital Gold – is slumping?
Bitcoin has shown itself to be more correlated w/risk-sensitive assets. Over the past 3yrs, Bitcoin has the highest monthly correlation w/Mag7 at 0.63. Correlation between Bitcoin and Nasdaq 100 is 0.58, between Bitcoin and S&P 500 is 0.54. Correlation between Bitcoin and Gold is very low at 0.23 - at 1 link would denote the two assets trade in sync. (HT @barronsonline) - HolgerZ, Bloomberg
Gold is going up together with real yields (inverted axis in the chart).
Who would have thought?!! Source: Jan Nieuwenhuijs
Bond yields up and gold up?
This looks like a classic 1970s action, with the inverse relationship between gold and 10-year Treasury yields starting to decouple. Gold is at all-time highs in the face of bond market weakness. This, coupled with the rise in commodity prices (especially oil / gasoline), could mean troubles for the Fed and the banks. Source: Bloomberg, Lawrence McDonald
Gold's role as a neutral asset with millennia of history as money is experiencing a resurgence relative to US Treasuries for global central bank reserve accumulations.
Source: Tavi Costa, Bloomberg
With real estate bubble bursting, no access to foreign equities and bitcoin, no wonder that people are flocking to gold.
Source: Bloomberg, Michel A.Arouet
It took Gold ETFs 5 years to cross $50 Billion AUM.
Bitcoin did it in 57 days. Source: Bloomberg, Wells Fargo
Why are gold and digital gold (aka bitcoin) rallying?
Sometimes one chart is worth a thousand words... As explained by Tavi Costa, If easing monetary conditions with inflation re-accelerating is the next move, then this is probably the most compelling setup to own hard assets (and storer of values) that we've ever seen. Source: Tavi Costa, Crescat Capital, Bloomberg
This table explains why markets were soooo... happy yesterday.
As shown by Charlie Bilello: as compared to their December forecasts, the Fed is expecting higher Real GDP growth (2.1% vs. 1.4%), lower Unemployment (4.0% vs. 4.1%), & higher Core PCE Inflation (2.6% vs. 2.4%) but is still anticipating 3 rate CUTS this year. This uber-dovish and bullish for risk assets and gold...
