The price of gold has reached its highest-ever level following a United States Federal Reserve interest rates cut, and crypto analysts are now sharing their predictions on when Bitcoin could follow suit.
According to GoldPrice.org, the price of gold hit a record high of $2,629 per ounce on Sept. 23, following a gain of more than 5% over the past fortnight.
The commodity’s big move follows the Fed interest rate cut of 0.5% on Wednesday, Sept. 18, which provided a tailwind for the metal.
A reduction in interest rates makes assets with returns tied to the Fed-set rates, such as short-term government bonds, less attractive, with inflation hedges like gold becoming a popular diversification option.
Gold price over the last month. Source: goldprice.org
Global geopolitical risks, such as the ongoing wars between Russia and Ukraine, Israel and Hamas, and the upcoming US presidential election in November, have also boosted the appetite for gold investments.
Additionally, the volume of global central bank purchases of gold has tripled since Russia invaded Ukraine in early 2022, according to a Sept. 12 Goldman Sachs report.
Researchers at the Wall Street investment bank predicted that gold prices will reach $2,700 by early 2025, buoyed by further Fed rate cuts.
However, according to Peter Boockvar, chief investment officer at Bleakley Financial Group, gold still has not topped its inflation-adjusted price, which peaked at $3,200 in 1980.
Nevertheless, gold bug Peter Schiff couldn’t resist taking a dig at digital assets in a post on X on Sept. 23.
“Gold just hit another record high, but few investors notice or care,” he said, adding:
“With so much attention focused on Bitcoin, investors are not only missing out on gold’s gains but the significance of the rise.”
Bitcoin (BTC), which is often referred to as digital gold, has also been rising, with an 8.5% price climb since the Fed’s rate decision.
The asset reached an intraday and four-week high of $64,660 during early trading on Sept. 23, according to CoinGecko.
BTC/USD over the past month. Source: TradingView
Related: Central banks buying gold at record levels, but Bitcoin still outperforms
In a note to investors on Sept. 22, 10x Research founder and CEO Markus Thielen said, “The likelihood of a major breakout increases as we near the pivotal October-to-March window” before predicting a new all-time high before the end of 2024.
“Bitcoin’s 2024 performance has once again followed its seasonal pattern— just as it did in 2023. This is why traders should anticipate a major breakout, potentially reaching new all-time highs in Q4 2024.”
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