Gold and Bitcoin have diverged

After moving in tandem earlier this month, Bitcoin and Gold have diverged. 

The safe haven metal, which rose to a six-year high of $1,611 on January 8, is currently trading at $1,540. 

The number one digital currency did face selling pressure on January 8 and 9, tracking gold’s reversal lower from $1,600. 

However, the positive correlation weakened on January 10 with bitcoin finding takers below $7,700 and rising to two-month highs near $8,600 earlier today. 

Gold did print 0.64% gains on January 10, but only to turn red on the following day and drop to an 11-day low of $1,536 during Tuesday’s Asian trading hours.

Bitcoin a safe haven?

Bitcoin closely tracked the rise in gold during the recent US-Iran tensions. 

The US launched an airstrike in Iraq on Jan. 3, killing a prominent Iranian military commander. The resulting rise in the geopolitical uncertainty triggered risk aversion in the markets, sending gold higher. Bitcoin also rallied more than 5% on that day. 

Further, both gold and bitcoin registered solid gains after Iran launched a retaliatory attack on US bases in Iraq on Jan. 8. 

As a result, many analysts are convinced that bitcoin is now a safe haven asset. 

Leave a Reply

avatar