Gold is enduring the longest period of decline it has seen in a century, with the precious metal’s value dropping for ten consecutive days—a streak last witnessed in February 1920. Data reported by Katie Greifeld, a senior executive at leading US-based financial analytics firms, show gold tumbled 27% from its historic high earlier this January. This sharp setback has sent ripples through the global markets, prompting investors and analysts alike to assess the undercurrents reshaping the safe-haven asset landscape.
Gold Struggles to Recover Momentum
Amid this historic selloff, gold briefly dipped to a low of $4,090 before finding support at its widely watched 200-day moving average—a technical benchmark often used to gauge the strength of long-term market trends. In the last 24 hours, the metal staged a modest rebound of nearly 2%, suggesting the possibility that the downward spiral may be losing steam. The recent volatility began in late February, triggered by escalating tensions in the Middle East, with gold’s cumulative loss since then approaching 12%.
Bitcoin’s Strength Versus Gold Grows
While gold has faltered, bitcoin’s performance presents a striking contrast. Often billed as “digital gold,” the cryptocurrency managed to hold above the $70,000 mark throughout gold’s decline. This divergence drove the bitcoin/gold ratio to just under 16 ounces, up from about 12 ounces before Middle East conflicts flared. In effect, bitcoin has outperformed gold by around 30% during this period, underscoring the shifting dynamics between traditional and digital stores of value.
Charlie Morris, investment manager at crypto analytics firm ByteTree, spotlighted the historical trajectory of bitcoin’s value relative to gold. Recalling 2017, when bitcoin first surpassed the price of an ounce of gold, Morris traced its steady climb: the ratio reached 2.7 ounces in 2019, 3.4 during the 2020 pandemic, and soared to 9.1 ounces after the FTX collapse. In February, it hit 12.4 ounces, and today sits near an all-time high of 16 ounces.
“While gold looks weak, I see it as reasonable to expect that, in the coming months or years, one unit of bitcoin could become worth more than 40 ounces of gold,” Morris commented.
Looking back, bitcoin has typically lagged behind gold during major market cycles. Historically, gold rallies first and stabilizes, after which bitcoin tends to surge, carving out its own growth trajectory. This pattern has become more pronounced as both assets react differently to macroeconomic and geopolitical pressures.
Eric Balchunas, an ETF analyst at Bloomberg, noted the lack of an inverse correlation between the two assets, emphasizing that their price movements are largely independent of one another.
In recent days, billions of dollars have flowed out of gold-focused ETFs such as SPDR Gold Trust and iShares Gold Trust, Balchunas explained.
Conversely, bitcoin-focused ETFs recorded inflows of roughly $2.5 billion this month, signaling robust demand despite recent volatility. Since the start of the year, net outflows from bitcoin ETFs have remained modest—around $140 million—even as bitcoin’s price retreated by nearly 20%, pointing to persistent interest among market participants.
