By Rhodri Morgan
Gold and bitcoin have hit record high prices in a week headlined by major fiscal statements and ever-heightening geopolitical tensions.
Gold bullion rose to $2,141.79 an ounce, beating its previous record of $2,135.39 set on December 4 last year, while Bitcoin surpassed the $69,000 on crypto exchange Coinbase, a level first touched on 10th Nov 10 2021.
In a note earlier this week, Ole Hansen, head of commodity strategy at Saxo Bank said the yellow metal rush is being propelled by “key drivers” such as hedge funds amidst fears of a Federal Reserve pivot.
Federal Reserve chair Jerome Powell, who has been trying to water down expectations of interest rate cuts in recent weeks, will deliver his semi-annual monetary policy testimony to a House committee on Wednesday and a Senate panel on Thursday.
The UK government, meanwhile, will deliver its Spring Budget statement tomorrow.
Physical demand for gold among key markets such as India and China remains high and US Central bank gold purchases also remain historically strong, driving the price higher.
Gold has also enjoyed an extended stay as a so-called ‘haven asset’ as wars in both Ukraine and Palestine rage on.
Despite its success, however, some of those with significant gold exposure are yet to be risen by the tide as two of the world’s largest gold miners Newmont and Barrick Gold are down 18 and 12 per cent respectively in 2024.
Bitcoin’s leap, meanwhile, comes amidst a surge in regulatory approvals in the US for exchange-traded funds (ETFs) that track the bitcoin price.
Also on the horizon is an event known as ‘halving’ where bitcoin production is cut by 50 per cent. The previous highpoint for the currency was set just before the last halving in 2021.
The cryptocurrency’s resurgence has come after a dreadful two-year period for the sector, which has weathered high profile bankruptcies and fraud cases including the now-infamous rise and fall of Sam Bankman-Fried and his FTX cryptocurrency exchange.
