Gold Price Surpasses $4,300 on Chinese Buying...Bitcoin (BTC) Retraces 14%

▲ Gold, Bitcoin (BTC)/AI generated image

While Chinese buying pushed gold prices up by 4%, Bitcoin (BTC) entered a period of consolidation after a sharp decline in the second quarter.

According to TheStreet on August 5 (local time), gold prices surpassed $4,300 per ounce, rising by approximately 4%. This is the highest level since June. The recovery in China's gold demand and easing inflation concerns drove the increase.

Chinese gold ETFs saw continuous inflows for 14 consecutive trading days until August 3, marking the longest net inflow streak since March. The People's Bank of China also added 33 tons of gold in the second quarter, its largest quarterly purchase since the end of 2023. According to the World Gold Council, the net purchases by global central banks totaled 288.9 tons.

Progress in negotiations between the United States and Iran also contributed to the rise in gold prices. Hopes for easing tensions in the Middle East led to a drop in oil prices, weakening concerns about energy price-driven inflation. The decline in U.S. Treasury yields also increased the investment appeal of gold, which does not pay interest.

The cryptocurrency market showed a quieter trend than gold. Bitcoin fell by approximately 14% in the second quarter, at one point dipping below $60,000. During the same period, about $5 billion flowed out of U.S. spot Bitcoin ETFs. However, fund flows improved in early August, showing signs of some investors returning to the market.

Corporate earnings also revealed the burden on the cryptocurrency market. Strategy reported an operating loss of $8.33 billion in the second quarter due to the decrease in the unrealized value of its Bitcoin holdings. Coinbase saw its revenue fall by 14%, resulting in a net loss of $359 million. Galaxy Digital also recorded a loss of $85 million amid declining digital asset prices. While gold benefited from central bank demand and expectations of lower interest rates, cryptocurrencies are in a phase of digesting price weakness, reduced trading, and corporate losses.

[Key Article Summary]

-Gold prices surpassed $4,300 per ounce, driven by recovering Chinese demand and falling Treasury yields.

-Chinese gold ETFs saw inflows for 14 consecutive trading days, and the People's Bank of China purchased 33 tons of gold in the second quarter.

-Bitcoin fell by approximately 14% in the second quarter, and about $5 billion flowed out of U.S. spot Bitcoin ETFs.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*