Gold Hits A Six-week High While Bitcoin Stalls

While stock indices keep breaking records and gold returns to its highest levels in six weeks, bitcoin remains stuck around 64,000 dollars. This contrast is surprising, as capital flows towards traditional assets, while the crypto market struggles to regain real momentum. Behind this gap is a historic rush of Asian demand for the precious metal and an intact appetite for US stocks. This divergence raises questions: are liquidity temporarily abandoning cryptos?

The spectacular surge of the yellow metal and the frenzy on Asian ETFs

The global precious metals market is experiencing a remarkable acceleration phase, driven by a massive shift of capital flows toward Asian financial instruments. While Western investors closely watch monetary policy adjustments, the physical and paper market in Asia registers unprecedented activity. This fund dynamic reaffirms the central role of Eastern markets in setting international gold prices.

This renewed interest in the traditional safe haven is illustrated by a spectacular recovery in market indicators after a period of strong summer volatility. The recent price trajectory and massive inflow of liquidity into investment vehicles in the region reflect a radical change in stance by major institutional operators and private investors :

• Price increase : gold rose 2.8% during the day to climb to $4,213 an ounce, marking its highest level since June 22 ;
• Continuation of inflows : Bloomberg reports 14 consecutive days of net capital inflows on physical gold-backed ETFs in China ;
• Recovery after historic low : this momentum comes just after June, labeled as the worst month of historic capital outflows for these products according to the World Gold Council ;
• Cumulative volume for the semester : inflows since the start of the year into Chinese ETFs reach 40 billion yuan (5.6 billion dollars), marking the second-best half-year performance in domestic market history.

The behavior of institutions and monetary authorities is the cornerstone of this bullish move on tangible assets. The World Gold Council explains this trend by very specific structural factors: “the demand for gold ETFs has remained strong amid growing geopolitical and economic uncertainties, while the uninterrupted gold purchases by the PBoC (People’s Bank of China) have continued to support a favorable climate. Institutional investor participation in Chinese gold ETFs has also increased, thus supporting demand for these products.” The numbers confirm this institutional commitment, with the People’s Bank of China (PBoC) having accumulated no less than 82 tons of gold over a consecutive 20-month period ending in June.

The S&P 500 hits an all-time high : the rise of American indexes

While precious metals shone in Asia, American stock indices showed remarkable strength in New York. The S&P 500 index reached a historic peak at 7,793 points before slightly pulling back in early afternoon. Thus, analysis of the internal structure of this rise shows particularly broad financial health within the equity sector.

Eric Balchunas, an analyst specializing in ETFs at Bloomberg, highlighted that 66% of the stocks comprising the S&P 500 are now trading above their 50-day moving average, while 57% of them outperform the standard benchmark index.

This performance of American stocks occurs in a context of easing some major geopolitical risks, notably the outlook on the reopening timeline of the Strait of Hormuz. Such a configuration allowed injecting a strong dose of optimism among equity investors, boosting buying in the vast majority of values on the American market. This appetite for risk in traditional markets contrasts with the passive behavior observed in the crypto market.

Bitcoin stagnation under threat of prolonged capitulation

In contrast to the widespread optimism around stocks and commodities, bitcoin fails to generate convincing bullish momentum. Analyst and trader Rekt Capital summarizes the delicate technical situation of the weekly chart of the BTC/USD pair as follows: “as long as the orange support produces increasingly weak rebounds, the price will continue to form lower highs, eventually causing a deeper break within the $58,000 to $66,000 zone.” This graphic vulnerability reflects the gradual exhaustion of buyers at each rebound attempt.

According to research published by the on-chain analysis platform CryptoQuant, three prerequisites must be met to hope for the emergence of a sustainable recovery in the bitcoin price. First, the market requires a sustained return of capital inflows into US-listed Bitcoin spot ETFs. Second, a calming of US bond yields must materialize, along with the absence of new interest rate hikes from the Federal Reserve. Finally, CryptoQuant reiterates the importance of a return to positive Coinbase Premium, which measures the price gap between the BTC/USD pair on Coinbase and BTC/USDT on Binance.

The current divergence between gold, stock indices, and bitcoin reveals a critical transition phase in the allocation of global liquidity. While the resilience of the US economy and the support of Asian central banks directly benefit traditional safe havens and stocks, the crypto sector still suffers from the aftermath of a prolonged capitulation phase in price metrics.

In the short term, the absence of an immediate monetary catalyst from the Fed leaves bitcoin at the mercy of stifling sideways volatility. Investors will need to closely monitor the realignment of US institutional flows and the stabilization of Coinbase Premium to determine if bitcoin will manage to catch up.