Gold Prices Surge 3% Nearing All-Time High as Bitcoin (BTC) Struggles to Maintain Momentum

Gold prices increased by over 3% this week, nearing their all-time high, as investors seek safe-haven assets amid geopolitical unrest

Gold prices surged over 3% this week, nearing their all-time high, as investors sought safe-haven assets amid geopolitical unrest in the Middle East and ongoing economic uncertainty.

In contrast, Bitcoin struggled to maintain upward momentum, with concerns mounting that the Federal Reserve may not cut interest rates quickly enough, prompting a shift away from riskier assets like stocks.

Over the past week, Japanese stocks entered a correction, triggering a broader selloff across Asia. Despite Fed Chair Jerome Powell stating no immediate plans for a rate cut, traders now largely expect the Federal Reserve to ease rates in September.

Futures markets showed a 17% chance of a 50-basis point cut, up from 5% before Powell’s comments, reflecting increased market expectations for monetary easing.

Could Gold’s Rally Leave Bitcoin in the Dust?

Gold's safe-haven appeal was further bolstered as U.S. Treasury yields declined and the dollar weakened. The 10-year U.S. Treasury yield recently hit a six-month low near 3.95%, reducing the opportunity cost of holding non-yielding assets like gold.

At the same time, the U.S. Dollar Index, which tracks the dollar against six major currencies, edged lower to around 104.25.

Geopolitical tensions, particularly clashes involving Israel, drove up demand for gold as investors sought safe-haven assets during periods of political uncertainty.

Moreover, market speculation about the Federal Reserve's policy pivot was fueled by Powell's dovish guidance, despite the central bank keeping interest rates steady at 5.25%- 5.50%.

Weak economic data, including a contracting ISM Manufacturing PMI and the highest initial jobless claims in 11 months, further strengthened the case for a rate cut.

The U.S. Nonfarm Payrolls (NFP) report, released today, showed an increase in the unemployment rate to 4.3% in July, while nonfarm payroll employment rose by 114,000. This weaker-than-expected job growth adds pressure on the Federal Reserve to consider rate cuts, enhancing gold's appeal as a safe haven.

Bitcoin Teeters: Will It Hold $64K or Drop to $59K?

Bitcoin was trading at $64,413.73 on August 2, with a market cap of $1.27 trillion. According to Crypto Raven, the cryptocurrency's price was attempting to establish support in the $63K to $64K range, which would be crucial in determining whether the price would move upward or drop to $59K.

Bitcoin exchange-traded funds (ETFs) saw inflows, with $50.6 million recorded on August 1, led by Grayscale's newly launched Bitcoin Mini Trust.

On the other hand, Bitcoin faced challenges as it struggled to break key resistance levels. Despite positive net flows into exchanges, indicating investor accumulation, Bitcoin's price remained range-bound.

Data from Santiment suggested that the crowd was not showing major fear regarding Bitcoin, although the sentiment could change if Bitcoin approached $60K. Social volume for terms like FOMC, Fed, and Powell spiked, indicating heightened awareness and discussion in the crypto community about monetary policy's impact.

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