Gold Rejected at $4,700 as Rate Hike Fears Send Markets into Tumble

Financial markets saw significant turbulence in mid-August following a major monetary pivot announced by US Treasury Department's Scott Bessent. This led to substantial gains for Bitcoin and gold, with the precious metal surging from $4,360/oz to $4,700 per ounce on August 25.

The 30-year Treasury yield corrected from 5.34% to 5.2%, while gold and stocks rallied. Analysts attributed the price movements to the 'debasement trade' narrative as the greenback weakened and US debt grew.

However, the macro situation has since changed, with Federal Reserve Chairman Kevin Warsh's hawkish speech at Jackson Hole interpreted as a sign of upcoming rate hikes. This led to a correction in financial markets, with gold plummeting below its starting level and losing over 8.5% from its local peak.

Bitcoin, on the other hand, remains 20% higher than $64,000 but has slipped from $81,500 to $77,000. Spot BTC ETFs have experienced more withdrawals than inflows in recent business days as the initial rush is over.