Gold is currently on its longest losing streak in more than a century, its worst streak since February 1920, which lasted 10 consecutive days, according to Bloomberg analyst Katie Greifeld.
The yellow metal has fallen as much as 27% from its January all-time high, falling to a low of $4,090, where it found support at its 200-day moving average, a widely watched technical level that often indicates longer-term trend strength.
However, it has recovered around 2% in the last 24 hours, which probably indicates the end of the streak. Since the escalation of the conflict in the Middle East in late February, gold continues to fall by approximately 12%.
Meanwhile, bitcoin, often referred to as digital gold, remains above $70,000, keeping the bitcoin/gold ratio just below 16 ounces. The ratio bottomed at around 12 ounces just before the Middle East conflict, meaning the ratio is up about 30% from those lows, with bitcoin outperforming.
Charlie Morris, Chief Investment Officer at ByteTree, noted: “I remember the excitement when 1 BTC first surpassed an ounce of gold in March 2017. Since then, it has steadily built higher lows, reaching 2.7 ounces in 2019, 3.4 ounces during the 2020 pandemic crisis, 9.1 ounces after the FTX crash, and 12.4 ounces in February of this year. Now, one BTC is worth 16 ounces of gold. Given that gold appears to be depleted, we could reasonably expect a new all-time high above 40 ounces in the coming months or years.”
Historically, bitcoin has tended to lag gold in market cycles. Gold typically leads with an initial rally and then consolidates, allowing Bitcoin to catch up and outperform.
Meanwhile, Bloomberg ETF analyst Eric Balchunas argues that bitcoin and gold are not inversely correlated, but rather largely uncorrelated.
It highlights that gold exchange-traded funds (ETFs) such as SPDR Gold Trust (GLD) and iShares Gold Trust (IAU) have seen billions of dollars in outflows over the past week.
By contrast, bitcoin ETFs have seen about $2.5 billion in inflows this month, with only about $140 million in net outflows so far this year, even though bitcoin is down about 20% over that period.
