- McGlone identifies a resistance level at 2.4x the S&P 500-to-gold ratio, underscoring potential market shifts.
- With a 29% increase in gold prices in 2024, predictions tilt towards gold’s dominance over stocks in 2025.
In a detailed financial analysis, Mike McGlone, Bloomberg’s senior commodity strategist, highlighted emerging trends indicating that Bitcoin might reflect broader economic shifts, particularly influencing the S&P 500 index against gold.
McGlone noted that as of December 31, the S&P 500 to gold ratio registered at 2.3 ounces per index point, just shy of the 2.4 ounces peak seen in 2018, suggesting a potential resistance threshold that could signal a peak in equity valuations when measured against the enduring value of gold.
Throughout 2024, gold saw an appreciation of nearly 29%, significantly outstripping the S&P 500. This performance underscores gold’s role as a resilient store of value in a year marked by heightened volatility across risk assets, including cryptocurrencies.
“The stock rout in a record year for risk assets-particularly cryptocurrencies-may portend limits to the wealth effect favoring the store of value,” he said earlier this week.
McGlone posited that if Bitcoin has indeed reached its peak, gold might continue to excel in the investment hierarchy into 2025.
The discourse on the interplay between Bitcoin and gold also encompasses broader projections about their future roles as investment assets. Historically, many analysts have suggested that Bitcoin could eventually supplant gold as the premier store of value.
Supporting this perspective, Bernstein recently projected that Bitcoin might replace gold within the coming decade.
“You can’t really hold gold anymore without some Bitcoin in that space. Anybody under 30 doesn’t buy gold. They don’t really care,” he said.
Continuing with the Gold and BTC reports on ETHNews, McGlone emphasized that 2024 was particularly stellar for Bitcoin, although he also acknowledged gold’s persistent competition in the investment arena.
McGlone’s insights reveal a shift in investment preferences among younger demographics, indicating that investors under 30 are increasingly opting for Bitcoin over traditional assets like gold. This trend highlights a shift in asset valuation and investment strategies among emerging investors.
Additionally, McGlone highlighted the growing correlation between Bitcoin and the U.S. stock market, noting that this relationship has reached its highest level relative to the U.S. GDP. This was particularly evident when Bitcoin rallied to a new peak of $100,000 in December before retreating.
Current XAUUSD (Gold/US Dollar) Price Analysis
Gold, traded as XAUUSD, is currently priced at $2,624.26 USD, showing an increase of 0.71% in the last 24 hours. Throughout the day, its price has fluctuated between $2,602.76 USD and $2,627.63 USD, reflecting moderate market activity. This rise continues a strong performance for gold, with a yearly gain of 27.21%, making 2024 its most successful year since 2010.
Gold’s price movement has been supported by its role as a safe-haven asset amid global economic and geopolitical uncertainties. Over the past six months, it has gained 11.34%, further solidifying bullish sentiment.
However, a stronger USD, driven by the Federal Reserve’s hawkish policies, has provided some resistance to its upward momentum.
Technically, gold faces resistance near $2,640 USD, a critical level it needs to breach for further upside. On the downside, support lies around $2,600 USD, which has acted as a strong floor during recent market movements.
Bitcoin’s Ascent: Projected to Surpass Gold as Leading Store of Value by 2025
Analysts from Bernstein predict that Bitcoin will surpass gold as the primary ‘store of value’ in the next ten years, suggesting a significant shift in institutional and corporate financial strategies.
#BITCOIN TO REPLACE GOLD OVER NEXT DECADE, SAYS BERNSTEIN
Bernstein predicts Bitcoin will replace gold as the leading 'store of value' over the next decade, becoming integral to institutional and corporate finance. Analyst Gautam Chhugani's note followed Bitcoin reaching…
— *Walter Bloomberg (@DeItaone) December 5, 2024
Gautam Chhugani from Bernstein estimates that Bitcoin’s price could escalate to $200,000 by late 2025, driven by anticipated supportive crypto policies following the U.S. elections. These policies are expected to promote wider acceptance and integration of Bitcoin into financial operations.
Gil Luria, an analyst at D.A. Davidson, notes Bitcoin as an asset that shows minimal correlation with inflation. This attribute, coupled with growing adoption, supports its reputation as an appreciating asset, making it an attractive alternative to traditional investments sensitive to inflation.
Looking ahead, gold is likely to remain in the range of $2,600 USD to $2,640 USD in the short term. A break above resistance could push the price toward $2,650 USD, while a failure to maintain support may lead to a retest of levels near $2,580 USD.
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Gold’s price may remain supported by geopolitical tensions and inflation fears, trading in the range of $2,600 USD to $2,640 USD.
Bitcoin, on the other hand, is expected to remain between $92,500 USD and $96,000 USD, with potential for upward movement if market sentiment improves.
