Bullish Sentiment Returns to Gold as Bitcoin Underperforms
Bullish sentiment has seemingly returned among retail investors in the gold market, after what has now been five months of strong outperformance of bitcoin (BTC) by gold in 2022.
Looking at how the two markets have performed year-to-date, it’s clear that it’s been a tough year for the bitcoin crowd, who have seen their wealth slashed in US dollar terms. And perhaps even worse is that the normally cautious and risk-averse gold investors at the same time have seen far better returns on their investment.
Depending on which data source is used, gold has as of Thursday returned around 2% so far in 2022, although it has been a fairly volatile ride for the yellow metal. Still, the positive performance compares to a loss of around 35% for BTC investors at the same time, with the lion’s share of the losses for BTC seen in January and May of this year.
Bitcoin (blue line) compared to gold (red line) in 2022:
According to Spectrum Markets, a European derivative trading venue, early signs of “a new rally” for gold could be spotted in late May, helped by a weaker US dollar and euro.
“After a period of decline in May that saw the gold price drop below 1,800 USD on the 16th, the gold price started what looked like a new rally in the last few days of the month, supported by both the dollar and euro undergoing a weak phase”, Michael Hall, Head of Distribution at Spectrum Markets, said in a comment shared with Cryptonews.com.
Gold performance in 2022:
Hall added that both the US Federal Reserve (Fed) and European Central Bank (ECB) are facing high inflation, while at the same time trying to deal with a number of other economic problems, including supply chain bottlenecks.
“Considering the macroeconomic backdrop, it’s no surprise to see investors
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