JPMorgan Predicts Rising Demand for Gold and Bitcoin

Global tensions and the upcoming presidential elections in the United States are driving investors towards gold and Bitcoin as safe-haven assets. This is reported by The Block, citing opinions from JPMorgan analysts.

Initially, the precious metal reacted rather cautiously to geopolitical upheavals. However, in the last quarter, its price surged sharply, approaching the $2700 mark.

“This rise is influenced by a 4-5% decline in the dollar’s value and a significant drop in the real yield of US Treasury bonds by 50-80 basis points,” the analysts explained.

Other factors driving demand for safe-haven assets include ongoing concerns about rising inflation, significant budget deficits in major economies, and declining trust in fiat currencies. 

Experts at CryptoQuant expressed a similar view in a recent post. They noted historical trends where lower bond yields led to higher gold prices.

Is the decrease in the 13-week Treasury yield driving up prices?

In 2008, as the 13-week Treasury Bill Yields started to lower, gold prices soared from $590 to a peak of $1900 per ounce in 2011.

In 2024 a similar trend is occurring, with gold rising from $2000 to nearly $2700.… pic.twitter.com/zTPbeWUqeP

— CryptoQuant.com (@cryptoquant_com) October 1, 2024

“In 2008, when the yield on 13-week Treasury bills decreased, gold prices soared from $590 to a peak of $1900 per ounce by 2011. A similar trend is observed now: gold has risen from $2000 to about $2700. Bitcoin, often seen as ‘digital gold,’ might follow this pattern,” the analysts explained.

In a conversation with the publication, J. A. Maartuun from CryptoQuant noted that despite the decline in yields and the increase in the M2 money supply, “gold is already benefiting from these factors, whereas Bitcoin is not, creating the current negative correlation between these assets.”

Earlier, experts at QCP Capital suggested that digital gold could fall to $55,000 due to escalating geopolitical tensions.