Gold approaches record while Bitcoin and stocks retreat

Source: PortaldoBitcoin Original Title: Gold Approaches Record High as Bitcoin and Stocks Retreat Original Link: Gold rose nearly 1% this Monday (1º), while riskier assets such as cryptocurrencies and stocks are falling amid macroeconomic uncertainty.

Gold futures are trading at $4,262.35, just 2.95% below their all-time high of $4,381.44. The precious metal is less than $130 away from setting a new record.

The abrupt drop in Bitcoin overnight reduced the total market value of all cryptocurrencies by more than 6% on the day, from $3.191 trillion to $3.016 trillion. Bitcoin fell by 5.5% on the day and is trading just below $86,147, according to data from CoinGecko.

The S&P 500 index is down 0.5% in pre-market trading, reflecting a pessimistic sentiment among U.S. stock investors.

The constant rise of gold in November can be attributed to “increasing caution among investors and heightened expectations for a rate cut in December,” said Illia Otychenko, Lead Analyst at CEX.IO.

Gold Driven by Speculation About the Fed

The increase in speculation that the next Fed chairman will be more dovish is contributing to the demand for gold, Otychenko said.

Although the chances of a 0.25 percentage point cut in December are around 88%, investors remain cautious due to the gaps in data following the government shutdown.

“As a result, many are stepping away from risk or remain in wait mode,” added the analyst, suggesting that Wednesday's ADP employment report and Friday's core PCE will provide “clearer signals on the Fed's next steps.”

When addressing the end of quantitative tightening by the Fed, Otychenko noted that “risk assets seem weaker because the liquidity impulse from the end of QT will take time to reach the markets.”

Quantitative tightening is a change in monetary policy where the central bank reduces its balance sheet by shrinking the money supply. This is done by allowing assets such as Treasury securities and mortgage-backed securities to mature without reinvesting the principal.