Analysts at J.P. Morgan suggest that increasing geopolitical tensions and November's presidential election are driving investors towards gold and bitcoin as safe-haven assets in what they describe as the "debasement trade."
"Rising geopolitical tensions and the coming U.S. election are likely to reinforce what some investors call the 'debasement trade' thus favoring both gold and bitcoin," J.P. Morgan Global Markets Strategy analysts Nikolaos Panigirtzoglou, Mika Inkinen, Mayur Yeole and Krutik P Mehta said in a note on Thursday.
While gold initially responded more mutedly to recent geopolitical events, its price has sharply risen over the past quarter, approaching the $2,700 level on Sept. 26, the analysts added.
"This increase in gold prices is influenced by a 4-5% decline in the dollar and a significant drop in real U.S. Treasury yields by 50-80 basis points. However, the appreciation of gold has exceeded what these factors alone would suggest, indicating a re-emergence of the ‘debasement trade,’" the analysts said.
Thursday's note said this “debasement trade” is driven by a combination of factors, including heightened geopolitical uncertainty since 2022, persistent inflation concerns, significant government deficits in major economies, and waning confidence in fiat currencies, particularly in some emerging markets.
A recent CryptoQuant post on X echoed these sentiments, highlighting historical trends where lower U.S. Treasury yields led to rising gold prices.
"In 2008, as the 13-week Treasury Bill yields decreased, gold prices soared from $590 to a peak of $1,900 per ounce by 2011," the post said. "A similar trend is emerging now, with gold climbing from $2,000 to nearly $2,700. Bitcoin 
BTC -2.75% , often seen as 'digital gold,' may follow this pattern."
However, CryptoQuant analyst J.A. Maartuun told The Block that despite the current declining yields and expanding M2 Money Supply, "gold is already profiting from these circumstances, while bitcoin isn't, resulting in a current negative correlation between bitcoin and gold."
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
