Gold Soars on China Demand as Bitcoin Fails to Keep Pace with Equities
Gold prices rose to six-week highs on Wednesday, reaching $4,213 per ounce, as Chinese demand drove the increase. This is up 2.8% from the previous day.
The World Gold Council reported that China's gold-backed exchange-traded funds (ETFs) have seen 14 consecutive days of inflows, with a total of 40 billion yuan ($5.6 billion) invested year-to-date. Despite June being the worst month for outflows on record, this performance is still the second-best first half of the year.
The People's Bank of China (PBoC) has been purchasing gold at a steady pace over the past 20 months, with 82 tonnes acquired through June.
Meanwhile, Bitcoin remained stagnant at $64,000 as the S&P 500 index hit an all-time high above 7,793. Bloomberg's ETF analyst Eric Balchunas noted that 66% of S&P 500 stocks are now above their 50-day moving average, and 57% have beaten the index's benchmark.
Bitcoin's price has been unable to keep pace with equities, and analysts are pointing to several prerequisites for a potential rebound. Onchain analytics platform CryptoQuant highlighted the need for sustained inflows to US spot Bitcoin ETFs, cooling US bond yields, and an absence of interest-rate hikes by the Federal Reserve.
Trader and analyst Rekt Capital warned that as long as the $64,000 support level remains intact, price will continue to form lower highs, potentially leading to a breakdown into the $58,000-$66,000 range.