Gold has become a safe haven for the global market as the Trump tariff war deepens concerns about economic recession. Today (14th), the spot gold price hit a new high, approaching $3,000 per ounce. However, while the market is chasing gold, international oil prices have fallen due to declining demand and geopolitical variables, and the role of Bitcoin as a hedge asset seems to have not yet been realized.
Gold approaches 3,000 US dollars Dual attack of high inflation and expected rate cuts
On March 13, international gold prices soared, with the New York spot gold price rising 1.85% to close at $2,989 per ounce, just one step away from $3,000. The driving force behind this surge is mainly the increase in global economic uncertainty.
In addition, the US released the Producer Price Index (PPI) for February last night, with the increase lower than market expectations, consistent with the trend of the previously released Consumer Price Index (CPI), indicating that inflationary pressure is easing, strengthening investors' expectations that the Federal Reserve may start cutting interest rates in a recession.
Bart Melek, Head of Commodity Strategy at TD Securities, said:
Currently, market funds are clearly flowing into gold, as it remains the most stable hedge asset to deal with market risks.
At present, major institutions are also generally optimistic about the future of gold. Macquarie Group forecasts that gold will soar to $3,500 in the second quarter of 2024, while BNP Paribas has also raised its gold price forecast to above $3,000.
Alex Ebkarian, Chief Operating Officer of Allegiance Gold, pointed out that investors have re-recognized the value of gold in times of market turmoil, saying:
Gold is in a long-term bull market and may fluctuate between $3,000 and $3,200 this year.
Oil price drop deepens recession concerns
Another evidence of the potential economic recession is that international oil prices have weakened due to the aggravation of trade tensions and the weakening of demand prospects, and the progress in the ceasefire between Russia and Ukraine has led the market to take a more conservative view of supply chain risks.
International oil prices fell
- Brent crude oil futures fell $1.07, down 1.51%, to $69.88 per barrel.
- US West Texas Intermediate (WTI) crude oil futures fell $1.13, down 1.67%, to $66.55 per barrel.
The latest report from the International Energy Agency (IEA) shows that global oil supply may exceed demand by about 600,000 barrels per day in 2025. The IEA has also lowered its forecast for global oil demand growth to 1.03 million barrels per day, a decrease of 70,000 barrels per month, mainly due to the global economic slowdown, especially the impact of the escalation of trade conflicts on energy demand.
On the other hand, Citi analysis points out that with Trump's campaign promise to lower oil prices, the market expects Brent crude oil prices to potentially fall to $60 in the second half of 2025.
The hedging market is reshuffled The hedging function of Bitcoin is weakening
For crypto investors, the most frustrating thing may be that the narrative of Bitcoin as "digital gold" has not been able to rise in sync with gold in this wave of hedging. Currently, Bitcoin prices are more affected by the US stock market, and have been relatively sluggish recently.
A market expert pointed out that the strength of gold and the weakness of Bitcoin highlight the shift in the market's choice of hedging tools, and said:
This is a great era of hedging, with uncertainty in international trade, geopolitics, and the macroeconomy.
During the Trump administration, a friendly stance towards cryptocurrencies drove a large influx of funds into Bitcoin, but with gold back on the stage, the hedging role of cryptocurrencies still needs more time to observe.
