As gold loses steam after rallying to 12-month highs, one market expert says he is seeing bitcoin take a chunk out of the yellow metal.
“I think it’s a big part of the problem in terms of stalling gold’s rally. In my eyes gold is always a currency play not a safe-haven play, now that you have other currencies getting real traction they are taking part of the buyers away from gold,” said Todd ‘Bubba’ Horwitz, founder of bubbaatrading.com
In mid-July, Bitcoin was trading around $1,985 per coin before continuing its rise higher. As hostilities increased between North Korea and the U.S., it broke the $3,000 mark before slicing through the $4,000 level with ease.
But fret not gold trackers, Horwitz added that another yellow metal rally is coming.
“A lot of people using cryptocurrencies are selling them and converting it back into gold and silver. It will come back into gold, it’s just delaying the relay.” Horwitz is eying the $1,377 level for gold which would mark a three-year high for the metal.
On Friday, gold had cooled off, with December Comex gold last seen trading at $1,351.10, up 0.06% on the day. The precious metal had surged above $1,360 earlier week as the U.S. dollar sunk to more than two-year lows amid geopolitical tensions surrounding North Korea, fading Federal Reserve rate hike expectations and destruction caused by Hurricane Harvey.
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