Gold’s 33% rally this year has repositioned the metal as the default benchmark for risk and store-of-value assets. It has outpaced the Nasdaq 100 by roughly three times and nearly doubled bitcoin’s gains, highlighting a shift toward traditional safe havens amid macro uncertainty.
Measured by the BTC‑XAU ratio — how many ounces of gold are needed to buy one bitcoin — the market now values a single BTC at about 31.2 ounces of gold, down from roughly 40 ounces last December. That compression reflects both a strong gold advance and a comparatively muted performance in crypto since year-end.
Macro conditions help explain the move. Falling government bond yields across major Western markets, driven by large public debt loads, persistent inflation concerns and slowing growth, have supported gold’s appeal as a non-yielding hedge. These forces reinforce gold’s historical role as a store of value and argue for using it as a benchmark against which other assets are measured.
What the charts suggest
Technically, the BTC‑XAU ratio has been trading inside a long-running ascending triangle that dates back to 2017 — a chart pattern investors typically view as bullish. After matching late-2021 peaks at the end of 2024, the ratio corrected about 25% and has since consolidated. The structure points to a possible breakout late in the fourth quarter or in the early months of next year if momentum returns.
Historical context matters: prior cycles produced severe drawdowns in the BTC‑XAU ratio — about 84% in 2019, 75% in 2020 and 78% in 2022 — before new highs formed. The current pullback is considerably shallower, which supports a longer-term bullish case for bitcoin relative to gold, but it does not eliminate downside risk.
Risk considerations: market dynamics can shift quickly. Past drawdowns show the BTC‑XAU ratio can move violently, and macro shocks or policy changes could reverse trends. This is market analysis, not investment advice.
In short, gold’s rally has reinforced its role as a reference asset, while the developing structure in the bitcoin-to-gold ratio suggests a meaningful directional move may be approaching. Traders and allocators should watch bond yields, institutional flows and the ratio’s triangle breakout for clues.
Source: CoinDesk. Read the original coverage for full details.