Record-Breaking Gold Rally Meets Crypto’s Crossroads: How Precious Metals Surge Could Shake Bitcoin
Gold’s real (inflation-adjusted) price shattered its previous 1980s peak in 2024, fueled by central banks scooping up nearly 1,000 tonnes a year—over 25% of annual mine production. According to DSP Mutual Fund’s Netra Report, this unprecedented demand has pushed bullion to heights not seen in over four decades. What’s more, the report warns that if sovereigns shifted just 5% of global foreign-exchange reserves into gold, prices could spike even higher.
By contrast, silver remains the underdog. Despite strong industrial uses, its inflation-adjusted value still lags 20% below its 2011 high.
Why Investors Care
Scarcity vs. Demand: Central banks’ voracious buying is tightening gold’s available supply, turning each new tonne into a golden prize.
Currency Hedges: As inflation worries linger and geopolitical tensions simmer, treasuries worldwide are diversifying away from the U.S. dollar—pointing a steady flow of capital into precious metals
Silver’s Catch-Up: For risk-tolerant investors, silver offers leveraged exposure to the same macro forces driving gold.
What This Means for Crypto
Gold’s resurgence can both compete with and complement digital assets:
Capital Rotation: Some institutional money that flowed into Bitcoin($BTC )as a “digital gold” hedge may find traditional gold’s record performance hard to ignore, potentially siphoning off short-term crypto inflows
Safe-Haven Correlation: Periods of heightened market stress often see Bitcoin and gold rally in tandem—so a stronger gold price may buoy crypto in volatility.
Diversification Play: As investors seek to spread risk, portfolios that mix physical gold, silver, and cryptocurrencies could emerge as the new balanced “store of value” strategy.
Source: DSP Mutual Fund Netra Report via Business Today
Credit: Basudha Das / Business Today
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