Daily Gold Market Report

The Evolution of Gold Investing:
From Anti-Bubble Asset to Bitcoin’s Partner in the BOLD Index

(USAGOLD – 2/23/2024) Gold prices continue to trade sideways to end the week. The gold market continues to struggling as expectations for the start of the Federal Reserve’s easing cycle continue to be pushed back. Gold is trading at $2025.73, up $1.43. Silver is trading at $22.75, down 1 cents.  Charlie Morris of ByteTree recently wrote an article entitled “The Golden Anti-Bubble“, which explores the evolving relationship between gold, the Nasdaq, and other financial assets over the past decades, focusing on gold’s role as a diversifier and a ‘risk-off’ asset. Initially, during the dotcom bubble of the late 1990s, gold and the Nasdaq were uncorrelated, with gold entering a bull market following the Nasdaq’s peak in 2000. However, recent times have seen gold displaying correlations with both equities and bonds, particularly during the pandemic, challenging its traditional role as a diversification tool. He discusses gold’s performance in relation to various financial models, including TIPS (Treasury Inflation-Protected Securities), monetary versus consumer inflation, and the global money supply, suggesting that gold remains a valuable asset despite being currently undervalued according to some metrics. It also highlights the ByteTree’s Bitcoin and Gold Index (BOLD) (60% Bitcoin/ 40% Gold) strategy, which leverages rebalancing between bitcoin and gold to optimize returns, suggesting a modern approach to investing in gold. Despite gold’s strong fundamentals and central banks’ interest, investor engagement with gold ETFs has declined, presenting a paradox in gold investment behavior.