Neil Hume, Mining and Commodities Editor for Financial Times, was quick to have World Gold Council Head of Market Intelligence, Alistair Hewitt, dismiss bitcoin’s ascendancy as a reason for gold’s third quarter (Q3) performance woes. He paraphrases Mr. Hewitt as having said, “there was nothing to suggest gold was suffering from the popularity of cryptocurrencies such as bitcoin, which have experienced explosive gains this year.” There is reason to be skeptical of that claim.
Gold Currents Might Turn Trends
Fortune’s David Meyer writes, “More people are now searching online for how to buy bitcoin than they are searching for how to buy hold,” according to Google Trends. Gold is the classic hedge against stock market volatility, especially during downturns.
That might be changing if Q3 figures are to be extrapolated into a full-fledged movement or current.
It certainly doesn’t help to have a booming stock market at the moment along with a new commodity asset in cryptocurrencies. Leaving out the entirety of the legacy markets, bitcoin alone has appreciated many hundreds of percentages in just 2017.
“Demand for gold slumped to an eight-year low in the third quarter,” Mr. Hume reports, attributing the record fall to “the prospect of higher US interest rates and tighter monetary policy” which “resulted in less [gold] buying from institutional investors.” […]