# Spot gold hits a new high

Yesterday I just analyzed the correlation between gold and Bitcoin, and today gold has once again surged into the trending topics. Spot gold (London Gold Spot) has for the first time ever crossed the $4500/ounce mark, accumulating a rise of over 70% this year. Spot silver has also broken through $70/ounce for the first time, with COMEX silver futures closing up 4.44% at $71.61/ounce, setting a new historical high. On the other hand, Bitcoin has decreased instead of increasing, showcasing the seesaw effect of capital once again. Today, our little fortune god will analyze the factors behind gold's rise and whether Bitcoin can replicate this logic.
? Looking back at the main upward wave of gold this time, the breakout is not accidental, but the result of multiple factors intertwining and resonating. From the shift in Federal Reserve policy to the escalation of geopolitical risks, and the central bank's gold purchasing frenzy, the gold market is undergoing an unprecedented structural transformation.

💰Federal Reserve Policy Shift: The "Catalyst" for Gold
The monetary policy of the Federal Reserve has always been the core driving factor of gold prices. In 2025, the Federal Reserve has cut interest rates three times, totaling a 75 basis point reduction, with the current rate maintained in the range of 3.50%-3.75%. In December, the Federal Reserve announced the end of quantitative tightening (QT) and initiated a $40 billion U.S. Treasury bond purchase program, marking a significant shift in the global liquidity environment. The market expects the Federal Reserve to continue lowering interest rates in 2026, with Goldman Sachs predicting another possible 100 basis points reduction in the medium term. The low interest rate environment decreases the opportunity cost of holding gold, while the weakening dollar directly enhances the attractiveness of gold priced in dollars. The dovish remarks recently made by Fed Vice Chairman Waller further reinforced market expectations for a loose monetary policy.

Geopolitical risks: Amplifier of safe-haven demand
The escalation of global geopolitical tensions has become a direct driving force behind the rise in gold prices. Events such as the strained relations between the United States and Venezuela, the Red Sea shipping crisis, and the ongoing Russia-Ukraine conflict have significantly heightened market uncertainty. The Geopolitical Risk Index (GPR) has recently reached a near-term high, prompting a substantial influx of safe-haven funds into the gold market. As a typical safe-haven asset, gold's demand has been unprecedentedly stimulated under the traditional notion of "buying gold in chaotic times." The University of Michigan's Consumer Expectations Index is at a historical low, reflecting consumers' lack of confidence in economic and employment prospects, further enhancing gold's safe-haven attributes.

💵 Central Bank Gold Buying Frenzy: The "Ballast Stone" with Structural Support
Since 2022, central banks around the world have continued to purchase gold, becoming the most solid foundation of the current gold "bull market". In the first three quarters of 2025, the total net gold purchases by global central banks reached 634 tons, and the annual gold purchase volume is expected to reach 750-900 tons. Emerging market countries are accelerating "de-dollarization", optimizing their foreign exchange reserve structures, and viewing gold as an important strategic reserve. The behavior of central banks in purchasing gold is strategic rather than short-term speculation, forming a "ballast" for gold prices. Data from the World Gold Council shows that the value of gold reserves held by global central banks has exceeded that of U.S. Treasury bonds, and this trend is expected to continue in 2025.

📈 Technical Breakthrough: The "Accelerator" of Upward Momentum
From a technical perspective, the price of gold has triggered programmatic buying after breaking through a key resistance level, forming an upward momentum. The market's "fear of missing out" sentiment is stronger than the profit-taking sentiment, leading to sufficient buying pressure that continues to push up gold prices, even though it is already overbought. Gold ETF inflows have reached a record, with net inflows of approximately $40 billion into global gold ETFs in the first half of 2025, and the assets under management have surpassed $450 billion.

So can the logic of gold's rise be repeated in Bitcoin? I think it is quite difficult at the moment, mainly for the following two reasons:
1. The hedging property of Bitcoin is decreasing while its investment property is increasing.
2. From a technical indicator perspective, Bitcoin is currently in a bear market, and a technical decline is difficult to avoid.

What does everyone think about this? Feel free to leave a message, and I wish everyone to make money every day!