Gold has staged a strong rebound after hitting a low of $3,870 on Friday, its weakest point in over a year. As of Monday morning, gold is trading near $3,968, up more than 2% on the day. In contrast, Bitcoin's bounce to $78,700 over the weekend has already faded, with the cryptocurrency now sitting around $77,400.
The author of the Kitco commentary went long on gold and silver on Friday, right at the bottom, and also purchased physical silver over the weekend. They noted that gold's dip below $4,000 might be the last chance to buy the metal at such a low price. The selling pressure on Friday appeared to be more about forced liquidation rather than a loss of faith in gold as a safe haven asset.
Bitcoin's performance has been weaker, with spot Bitcoin ETFs seeing more than $640 million in outflows on Friday. The Fear and Greed Index is also in the fear zone, suggesting that Bitcoin may not have found its bottom yet. The author emphasized that gold, sitting at a level of support, offers a safer play than Bitcoin right now, especially with the midterm elections approaching.
The midterms, set for tomorrow, add another layer of uncertainty. Historically, markets have rallied after midterm elections, but current valuations are unprecedented. The Buffett Indicator, which compares the total value of the stock market to the size of the economy, is near record highs, suggesting that stocks are overvalued. This could impact Bitcoin, which tends to trade with tech stocks. Gold, however, has historically been a hedge against inflation, making it a more attractive option in the current environment.