Gold has continued to weaken recently, with its price falling below the 200-day moving average for the first time since October 2023. Meanwhile, the Bitcoin-to-gold ratio has rebounded 3% over the past 24 hours, prompting market participants to consider whether the relative strength between these two assets is shifting.
Gold has entered a technical bear market.
According to reported data, the price of gold has fallen more than 20% from its historic high of $5,600 per ounce in January this year, dropping below $4,300. The 200-day moving average is commonly regarded as a long-term trend indicator; breaking below this level often signals a significant slowdown in the previous upward trend.
This pullback occurred after a significant rally in gold prices. Since October 2023, gold rose from under $2,000 per ounce to a historic high, achieving a cumulative gain of nearly 200%. A key driver of this rally was market expectations that increased government spending, rising debt levels, and an accommodative monetary environment would erode the purchasing power of fiat currencies, thereby boosting demand for scarce assets.
A stronger U.S. dollar is pressuring risk assets.
Last week’s stronger-than-expected U.S. employment data pushed markets to price in a higher probability of further Fed tightening. According to the CME FedWatch tool, markets currently anticipate a 25-basis-point rate hike by the Fed in December, raising the federal funds rate range to 3.75%–4.00%.
The US Dollar Index (DXY) has also reclaimed the 100 level. Typically, a stronger dollar tightens global financial conditions and puts pressure on dollar-denominated commodities, gold, and crypto assets.
Silver is also weakening in tandem. Reports indicate that silver is currently testing support near its 200-day moving average, around $67 per ounce. Due to its higher volatility, silver is often regarded as a more responsive version of gold.
The Bitcoin-to-gold ratio is recovering
As gold retreated, Bitcoin's price rebounded to around $63,000, pushing the Bitcoin-to-gold ratio up to 14.72 ounces. This metric measures how many ounces of gold one Bitcoin can purchase.
However, this ratio remains approximately 70% lower than the recent peak of about 41 ounces in December 2024. The report also noted that last month, the ratio encountered resistance near the 200-day moving average, after which Bitcoin briefly fell below $60,000. Nevertheless, the indicator remains above the February low this year, indicating some recovery in Bitcoin’s performance relative to gold.
From the current market environment, a stronger dollar and rising expectations of interest rate hikes remain the primary sources of pressure. However, after gold entered a technical bear market, the relative performance between bitcoin and gold is once again becoming a key focus for market observers.