Decoupling from interest rates, the US dollar, and Bitcoin, is gold shedding everything?
Gold prices have recently shown a strong independent trend, significantly diverging from traditionally correlated assets such as interest rates and the US dollar. However, from a technical perspective, the recent gold price chart has released signals of a short-term trend reversal
Since the beginning of this year, gold prices have shown strong performance. The price of gold has significantly diverged from several traditionally correlated assets such as interest rates and the US dollar, indicating its robust independent trend.
Data from Refinitiv shows a substantial short-term gap between gold and the yield on US 10-year Treasury bonds (inverted). The situation with the US dollar index is similar, while digital assets like Bitcoin are far behind gold.
Market analysis suggests that the current "decoupling" rise in gold prices may be driven by multiple factors.
The escalation of global geopolitical tensions and concerns about economic recession have stimulated investors' demand for gold as a safe haven. Central banks around the world continue to increase their gold reserves, providing strong support for gold prices. Although recent inflation data has shown a decline, concerns about long-term high inflation remain, with gold seen as an effective hedge against inflation. The continuous rise in gold prices has attracted a large influx of speculative funds, further amplifying the upward trend.
Investment banks are also bullish on the future market trends. Citibank's report points out that strong physical fundamentals are the foundation of the gold bull market. In the fourth quarter of 2024, investment demand is expected to account for 82% of gold mine supply, and this proportion is projected to rise to over 95% by the fourth quarter of 2025. Private investment demand will increase through various means such as gold bars, coins, ETFs, and OTC.
However, from a technical perspective, gold has currently released signals of reaching a peak.
According to Refinitiv data, a massive "shooting star" pattern has appeared on the recent gold price chart. This pattern is typically seen as an early signal of a short-term trend reversal after a significant price increase. It reflects that buying power may be weakening, and prices are facing downward pressure. Currently, the Relative Strength Index (RSI) for gold is as high as 79, further reinforcing the possibility of a peak.
