Gold and Bitcoin experienced significant gains during early Asian trading on Monday following a provocative statement from former President Donald Trump, which reignited interest in these two top assets.
In a post on Truth Social, Trump declared, “THE GOLDEN RULE OF NEGOTIATING AND SUCCESS: HE WHO HAS THE GOLD MAKES THE RULES,” sparking a strong market reaction. The comment, underscoring the age-old association between wealth and power, led to a rally in both assets.
Gold surged to a record high of $3,385, marking an increase of nearly 2% within 24 hours, according to TradingView. Meanwhile, Bitcoin rose about 3%, reaching $87,500. The cryptocurrency is up 4.5% over the past week.
Although Trump’s statement echoes past remarks, analysts suggest that the recent gains in Bitcoin and gold are driven more by ongoing US-China tensions and growing economic uncertainty. The rare synchronized rally of both assets signals that investors may be increasingly concerned about the weakening US dollar and broader financial instability.
The Kobeissi Letter, a financial analysis firm, commented on the unusual price movement, suggesting it reflects a growing consensus among investors that the dollar may be headed lower. The US dollar index plunged to a three-year low in early Asian trading on Monday, driven by fears surrounding Trump’s potential influence over Federal Reserve policy. National Economic Council Director Kevin Hassett indicated that Trump may still be considering ways to remove Fed Chairman Jerome Powell, unsettling traders.
This prospect of Trump exerting more direct control over monetary policy, or continuing his public attacks on the Fed, spooked the market, prompting aggressive selling of the dollar.
Bitcoin’s performance during this dollar slump has been noteworthy. Traditionally, when the dollar weakens, Bitcoin’s price tends to fall as well, since both assets are viewed as competing safe-haven investments. However, Bitcoin’s rise instead of its typical decline suggests a “regime shift,” according to market observers. This deviation could indicate Bitcoin’s evolving role as a store of value, potentially distancing it from the volatility of the tech sector.
Despite being dubbed “digital gold,” Bitcoin’s correlation with gold has remained low in recent years. Franklin Templeton Digital Assets reported last week that Bitcoin has a stronger correlation with tech stocks than with gold. Over the past three years, Bitcoin’s correlation with gold rarely exceeded 0.3, while its correlation with tech equities reached as high as 0.7, indicating that Bitcoin aligns more with the tech sector than with traditional safe-haven assets.
While this shift in Bitcoin’s behavior is significant, analysts caution that it may be too early to confirm a definitive decoupling from risk-on assets like tech stocks.
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