Gold, the lustrous metal continued its bearish momentum into the new week as its price flash crashed earlier today during the Asian session. The morning flash crash dipped Gold’s price to a nearly 6-month low, falling below $1,700/oz. The price has since recovered slightly and traded at $1,746 at the time of writing.
The traditional store of value is down 8% in 2021, and 14.87% from its all-time high of $2,040 in August 2020. Analysts believe high leverage trading is the cause of the current flash crash something the crypto market is often looked down upon.
Peter Bandit, the Forex guru attributed current price volatility in Gold to high leverage trading on Chicago Mercantile Exchange’s gold markets that offer 15:1 leverage. A few others blamed it on the drop in the US unemployment rate to 5.4% from 5.9%.
“The better jobs data sent the US dollar and US bond yields higher, never a good formula for commodities.”
The flash crash in gold’s price became the butt of all jokes in the crypto community due to the obvious comparisons between the two. Max Keiser, the known Bitcoin proponent didn’t miss the chance to take a pot shot Peter Schiff, the gold proponent.
— BITCOIN MAXIMALIST (@maxkeiser) August 8, 2021
Bitcoin Looks to Consolidate on Gold’s Loss
The gold price has been on a downward trend throughout 2021, on the other hand, Bitcoin price has managed to shed its correlation with gold’s price further. The top cryptocurrency has also broken out of nearly three-month-long price slumber. It has also broken out of the $30K-$40K price range and looks set to move forward in the second leg of the bull run.
The top cryptocurrency is currently trading at $43,556 falling from a daily high of $45,246. BTC has managed to outperform every other asset despite losing a significant portion of its gains during the past three months. On the other hand, gold’s 10-year ROI went negative with the recent flash crash.
As the third wave of the pandemic approaches, Bitcoin and other crypto-assets might see another bullish surge while its arch-rival Gold continues to show a downward trend, losing investor confidence as a store of value.