New all-time high in gold – will Bitcoin follow? This is what analysts say

Bitcoin traders should be prepared for a decent upward momentum led by the gold market. This is due to the increasing correlation between the two plants. On August 3, Bitcoin and gold moved in the same direction with an accuracy of up to 67.5 percent. This marks their highest 1-month correlation in 2020 – which illustrates the likelihood that they will move towards each other for the rest of the year.

Gold at $ 2,000?
Wayne Gordan, Executive Director of Commodities and Forex at UBS Global Wealth Management, believes that gold will reach $ 2,000 in September 2020. Gordan said in a phone interview that gold needs real Treasury yields to “move deeper into negative territory”. On Friday, real yields on ten-year US government bonds – in which expected consumer price changes are calculated from nominal bond yields – slid to minus 1.005 percent. This slump reflected higher government bond demand despite expectations of poor yields. It also showed investors’ willingness to invest in safe-haven assets during the downturn in the US economy triggered by the COVID pandemic. According to Gordan, real yields could now drop as low as 1.6 percent in the coming months, increasing gold bids. Bitcoin, with its growing correlation to gold, could therefore follow the upward trend.

Bitcoin against loose Fed policy
And then there is the Federal Reserve’s monetary policy, which promises to keep the tap open as long as the US economy needs it. Traders expect the US Federal Reserve to keep their interest rate close to zero over the next few years – especially after data released last week showed that the economy was in its most significant post-war contraction.