Bitcoin Crashes, Gold Suffers
Gold weakened early in Thursday's Asian session, dragged down by a wave of selling that originated in the crypto market. Spot gold fell to around $4,707/oz (down around 1.4%) as risk-off pressure spread across assets.
The main trigger: Bitcoin's sharp fall, further straining market sentiment. BTC was last depressed to around $61,350 (down ~15.7%), with volatility remaining high after its extreme intraday swings.
According to IG market analyst Chris Beauchamp, the crypto downturn, which initially looked like a "bear market," turned into a rout that spread to other assets—including commodities. Essentially, when crypto panics, the market often reduces risk everywhere, not just in one place.
The ripple effect is felt because many market participants are "locking" positions and chasing liquidity. When outflows occur simultaneously (margin calls, stop-losses, deleveraging), assets typically considered defensive like gold can be temporarily sold off—not because gold's fundamentals are poor, but because the market needs cash quickly.
On the macro front, the risk-off mood typically intensifies when the dollar and yields strengthen, making the opportunity cost of holding (non-interest-bearing) gold more pronounced. So, while gold has a safe-haven reputation, during a "panic selling" phase, the logic often reverses: liquidity is paramount.
In the short term, the gold market is sensitive to two factors: whether crypto prices continue to plummet (extending the domino effect), and whether the dollar/yields continue to exert pressure. If the pressure eases, gold could rebound quickly—but if the panic persists, gold remains vulnerable to further "shocks."
In conclusion, gold's weakness this morning appears more to be a spillover of risk-off from crypto prices and fragile global sentiment, rather than a major fundamental change in gold itself—at least in the early stages of today's Asian session. (asd)
Source: Newsmaker.id
