The precious metals market saw its biggest one-day drop in more than two months on December 29, with gold prices falling more than 5%, and silver, platinum and palladium also experiencing heavy losses.
These extreme fluctuations led some analysts to raise the possibility of capital shifting from the metals market to crypto.
On the same day, the price of Bitcoin temporarily crossed the $90,000 mark and
the price of Ethereum reached the $3,000 mark, which could be a sign of the beginning of a possible capital rotation.
However, the metals’ quick return to positive territory and the pullback in cryptocurrencies suggested that the recent correction may have been temporary and that gold’s long-term trend remains strong.
Analysts emphasize that the recent decline in gold is more due to the collective actions of large investors than to a decrease in actual demand.
Gold has traded above its 200-day moving average for more than 550 days, rising 135% during that time, the second-longest-running record in history and even higher than the 2009-2011 period.
Meanwhile, some analysts, including Michael Van de Poppe, are pointing to bullish divergences between Bitcoin and gold and predicting that Bitcoin could outperform gold in the short term.
