U.Today – On Friday the 13th, Peter Schiff declared it a “lucky” day for gold investors as the precious metal is trading at a new all-time high of $2,600. (BTC), however, in Schiff's opinion, investors are “out of luck,” just like all Americans in general, says the banker and financial expert.
In his view, record gold prices are not just a reflection of market trends, but indicate something more worrying, such as higher inflation, unemployment, rising long-term interest rates and perhaps even a recession on the horizon.
While many expect the Federal Reserve to cut interest rates next week, which some believe will give a boost to gold's current rally, history shows that gold typically performs well in periods of monetary change.
For example, in September 2007, the Federal Reserve cut rates for the first time in four years, after holding them steady at 5.25%. This led to a 45% increase in gold prices over the next six months.
Bitcoin and gold from 2024
Now that the Federal Reserve is expected to cut rates once again, though perhaps not immediately, it is the anticipation of such changes that tends to push gold prices higher. Comparisons can be made to July 2019, when the Fed cut rates for the first time in 11 years: the value of gold rose 26.35% over the following year.
Meanwhile, Bitcoin, while seen by some as gold 2.0, has yet to emerge as a safe haven in the eyes of most market participants; while it is still seen as digital gold due to its deflationary nature and scarcity, the cryptocurrency as a whole is seen as a beta for tech stocks and riskier assets.
That's why the Nasdaq's performance may be more important for BTC than the precious metal right now, and why neither tech stocks nor digital assets are guaranteed against a free fall in a recession.
This article was originally published on U.Today
