Gold’s record-breaking run took a breather this week, snapping an eight-week winning streak as traders took profits ahead of the Federal Reserve’s October policy decision.
The pullback has eased safe-haven demand and, for the first time in weeks, has tilted some attention back to risk assets, including bitcoin .
Spot gold fell more than 6% from its all-time high above $4,380/oz on Monday and fell near $4,120 over the weekend. The pullback was driven by profit-taking, heavy outflows from exchange-traded funds (ETFs) and a shift in tone around US-China trade relations.
Officials from both countries said they reached a “tentative consensus” on key trade issues, easing fears of a new round of tariffs that had fueled the metal’s rise.
“The threat of 100% tariffs on Chinese goods is effectively off the table,” US Treasury Secretary Scott Bessent said on Sunday, after two days of talks in Malaysia set the stage for a broader deal between President Trump and President Xi Jinping.
The softer macro backdrop, combined with expectations that the Fed will cut interest rates by another 25 basis points this week, took the shine off gold’s parabolic rally. Silver and platinum also slipped sharply in signs of a reset ahead of Wednesday’s decision.
But the timing may turn out to be fortuitous for BTC.
After lagging gold for most of the quarter, Bitcoin has gained over 5% in the past week, reclaiming the $113,500 level and breaking away from a narrow month-long range.
The move comes as the BTC/gold ratio — a measure of Bitcoin’s relative value to the yellow metal — flashed its most oversold reading in nearly three years earlier, according to CoinDesk analyst Omkar Godbole.
The ratio’s 14-day Relative Strength Index (RSI) fell to 22.20 last week, below the February low and the weakest since November 2022. Historically, such extremes in the BTC/gold ratio have coincided with local bottoms for Bitcoin, often followed by periods of outperformance as traders rotate back to higher fear macro assets.
