Gold and cryptocurrencies have recently shown parallel price movements, but for very different reasons, according to Michael Cuggino, president and portfolio manager at Permanent Portfolio Funds. In a CNBC interview today, Cuggino highlighted that while both assets can rise simultaneously, their underlying drivers are distinct.
Cryptocurrencies, particularly Bitcoin, now reflect tech-sector dynamics and liquidity cycles, responding strongly to speculative sentiment and monetary policy shifts. In contrast, gold’s strength continues to be grounded in long-term macro fundamentals, including geopolitical uncertainty, central bank buying, and expectations of lower real interest rates.
Investors are watching both markets closely as the Federal Reserve signals a potential slowdown in interest rate hikes. While gold remains a hedge against risk and uncertainty, Bitcoin continues to behave as a growth-oriented, innovation-linked asset, sensitive to liquidity and market sentiment. Analysts suggest that understanding these differences is key to portfolio allocation.
Source: https://www.youtube.com/watch?v=qjF-X-PqDl8
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