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Gold and digital gold hit new highs
Both gold and increasingly Bitcoin (also known as digital gold) are seen as hedges against inflation.
Or in the sound money perspective: stores of value. In recent years, both Bitcoin and gold have seen remarkable returns versus the dollar. Unlike the dollar, both gold and Bitcoin cannot be arbitrarily inflated by any central bank or government.
Escalating geopolitical tensions, such as the Russia-Ukraine conflict and recently U.S.-China trade frictions, have driven demand for these “safe haven assets.” What’s remarkable however, is that gold in particular has been charting new all-time highs despite rising rates.
Typically, alternative stores of value have been negatively affected when rates rise rapidly. Put simply, there’s a greater opportunity cost for investors who can receive a “risk-free” return in money markets versus gold or Bitcoin (which do not pay dividends when held directly).
Is this a sign of investors losing faith in dollar system? US Treasuries are the largest monetary competitor to gold, and rapidly rising…
