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As risk appetite declines in global markets, capital is shifting toward safe havens. The message of increased volatility from Federal Reserve Chairman Jerome Powell has resulted in a mandatory liquidation of $1.5 trillion in the stock markets. This development has turned attention back to the gold market. With a weakening US dollar and rising inflation expectations, gold has become a favored asset for investors. The surge in gold prices has led many to look at Bitcoin (BTC) 
$103,712.
Gold Rally Gains Momentum
On Wednesday during the North American session, gold prices rose by more than 3%, reaching $3,337. This increase continues the bull market that began in October 2023 and is driven by increased purchases from global central banks, particularly in China. Gold is entering a long-awaited price discovery process.
The prolonged negotiations over the trade war and rising uncertainties are prompting investors to seek safe assets. In recent weeks, both institutional and individual investors have pulled their capital into less risky areas, increasing their gold positions. Notably, technical indicators show the Relative Strength Index (RSI) has slightly retracted from 93 to 83, indicating that prices may be nearing a peak.
Market assessments suggest that gold could hit $3,500 per ounce in this cycle. However, surpassing this target is believed to depend on the depth of the trade war and the stance of central banks.
Gold’s Ascent May Present Opportunities for Bitcoin
With gold’s rise, attention has once again shifted to Bitcoin. Having earned the title of “digital gold” over the last decade, Bitcoin emerged after the 2008 financial crisis and proved its worth during the Covid-19 pandemic. The Fed’s classification of Bitcoin as “digital gold,” and its non-competitive stance against the dollar, has increased interest in this asset.
The U.S. government, under Donald Trump’s leadership, is considering Bitcoin as a potential economic tool to alleviate its massive debt burden. This has led to Bitcoin being discussed more frequently in geopolitical contexts.
Historical data indicates that Bitcoin’s price typically experiences similar parabolic increases during strong rallies in gold. Bitcoin currently appears poised for such a leap technically. As gold approaches its peak, Bitcoin is expected to gain similar momentum, albeit with a slight delay.
Investors may view this correlation as an opportunity to reshape their portfolios. However, high volatility in the cryptocurrency market necessitates careful consideration when making moves.
