Key Gold Takeaways:
- Gold soared to its 18-month high, raising the precious metals sector.
- The war in Ukraine caused a higher demand for safe-haven assets.
- Bitcoin did not make the cut, and struggled to stay afloat amid the yellow metal rally.
YEREVAN (CoinChapter.com) — Gold jeopardized Bitcoin’s fragile “safe-haven” status once more, soaring nearly 4% since March 3. The precious metal’s spot price briefly peaked at over $2,000 for an ounce on March 7 but settled around $1,990 before the London session opening bell.
Moreover, the highest Gold price in over 1.5 years triggered a surge among other metals, such as aluminum and nickel. The latter set the record for the past 11 years, trading at nearly $36,400 per ton.
War in Ukraine behind the rally
The raging war in Ukraine fuelled the safe-haven asset rally, as traders sought alternate markets to hedge their assets against the growing instability in the global economic arena. An outspoken crypto antagonist and Gold advocate, Peter Schiff, commented on the situation, shaming the European Central Bank for their short-sightedness.
Also read: Bitcoin, stocks, ruble: Putin's invasion of Ukraine hurts all at once.
Moreover, trading volumes spiked on SPDR Gold Trust, the largest exchange-traded fund (ETF) backed by physical Gold. Todd Rosenbluth, the senior director of ETF at research company CFRA, asserted that the surge in Gold ETF interest highlights the investors’ intention to hold rather than trade.
We’ve seen broad-based demand for gold ETFs. GLD has been the heavyweight, but we are seeing some of the more moderately sized and cheaper products gain ground. They’re more for the buy-and-hold as opposed to the trading audience that’s going to benefit from the liquidity that GLD has.
said the expert.
Russia is not worried
Meanwhile, Russia has been growing its Gold reserves over the previous years, stretching it to $643 billion as of February 24, 2022. The statistics show a 41% increase in 4 years, as the reserves stood at $448 billion in 2018. Moreover, the official Russian media claims that the sanctions put in place by the U.S., the European Union, and the allies will backfire, depriving “the West” of its stability.
The attempt to isolate a key player in the global economic processes and international trade could have undesirable consequences for everyone else.
commented a Russian pro-governmental media channel on Mar. 5.
Also read: Fed to hike interest rates despite ongoing war in Ukraine – Will Bitcoin benefit?
However, the war in Ukraine did not have the effect crypto bulls were hoping for, as Bitcoin lost its safe-haven status.
The Gold rally contrasted with Bitcoin often called “digital gold,” and pushed it out of the store value domain, further into the risk-asset sector. Moreover, the alpha cryptocurrency grappled with significant support, trading at over $38,300.
Bitcoin struggles with a rebound level
The BTC/USD exchange rate dropped nearly 16% since March 2, erasing the equivalent gains in the previous two days. However, the daily and weekly charts flashed contrasting predictions.
The weekly chart showed Bitcoin’s struggle to bounce back from the bottom trendline of the Ascending Channel, which CoinChapter covered recently. If relevant, the Channel could take BTC to its previous all-time high of $69,000.
Also read: Bitcoin fishes return to accumulation as BTC eyes $45K breakout.
The said rebound level stood close to the $38,000, where BTC consolidated sideways for the previous three weeks, unable to bounce off with confidence.
Moreover, the daily chart threatened BTC bulls with a Symmetrical Triangle, which could take the digital asset below the $30,000 line. The formation entails two converging trendlines with a similar slope and forecasts a continuation of the bias preceding the Triangle. Thus, Bitcoin could eye a further 20% decline.
Also read: Bitcoin falls below $35K, gold rallies as Russian army invades Ukraine.
It is increasingly hard to make any predictions in the current unstable geopolitical climate. The war in Ukraine is ongoing, as is the West’s determinations to sanction Putin’s dictatorship back to its senses.
However, as safe-haven assets tend to thrive in such uncertain times, Gold could close above $2,000 on March 7, making it the highest value in the previous 1.5 years.
Meanwhile, Bitcoin confirmed its inverse correlation with the yellow metal, consolidating sideways and threatening BTC bulls with a further decline. The upcoming sessions will shed more light on the possible outcomes.
