TL;DR: “I guess gold is the real bitcoin,” Boris Schlossberg, managing director of FX strategy at BK Asset Management and noted cryptocurrency bear, posted recently. He further explained during a Trading Nation interview, “Ultimately I think what’s happening is the market is taking implicit bets that inflation is starting to pick itself back up, and I think there’s a really good reason why the market thinks so.”
Gold is the New Bitcoin
At the time of publication, gold traded a tick over $1,800, its highest spot price since 2011. Fueling the historic run is anyone’s guess, but the barbarous relic is often a traditional hedge for traders in rocky financial times. A once-in-a-century pandemic, Depression-era unemployment, and lingering inflation fears as central bankers pump fiat into world economies like never before, certainly qualifies. In context, however, Schlossberg’s characterization doesn’t seem to be a compliment.
“Central banks are still going to have to keep rates very, very low,” Schlossberg continued telling host CNBC host Seema Mody, “because their first and foremost priority right now in a post-Covid world is to maintain momentum, to maintain expansion as much as possible. So, they’ll suppress interest rates, inflation will go a little bit higher, and of course gold loves nothing more than real interest rates going lower and lower and lower.” He’s calling the all-time-high of $1,920.30, set in 2011, to be tested soon.
Schlossberg favors the slow, steady rise of gold prices, which bias him to believe this run is substantive rather than a parabolic craze, necessarily. However, these are unprecedented times, and usually trading in legacy stocks will slide as gold rises an inverse relationship if there ever was one. That is not the case presently. Both are headed upward, which could be a negative sign considering how giant central banks like the US Federal Reserve and the Peoples Bank of China are flooding the world with paper tickets. The European Union is no better in this regard. It all could be a chimera, in other words.
Even bitcoin bulls are calling for a new gold rush. “The macro set-up is so perfect for something like gold,” Michael Novogratz of Galaxy Digital explained this week on the CNBC’s other financial program, Fast Money. “The Federal Reserve and central banks around the world just keep printing money – more money, more money, more money. And so, gold is going to take out the old highs, $1,950 or something, and it is going to keep going. I think we are just starting this move,” Novogratz continued.
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