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Happy New Year!
Alternative investors couldn’t have asked for a better way to ring in 2024. In a remarkable display of resilience, gold has held its value around its all-time high, maintaining its spot price of about $2,070 through early January after correcting from its record value of $2,130 per ounce last month.
The surge in gold’s value can be attributed to a confluence of factors: increasing geopolitical tensions, a weakening US dollar, and a noticeable dip in bond yields. The current global landscape, marked by instability and uncertainty, particularly with escalating tensions in South Gaza and the impact of naval conflicts in the Red Sea, is fuelling this upward trend.
Gold’s ascent of over 2 percent in the past month, reflects the market’s growing unease with volatile paper assets. Investors, both retail and institutional, are increasingly turning to gold as a hedge against risk.
Market Snapshot: January 3, 2023
- Inflation Rate: 3.1%
- Fed Rate: 5.5%
- Gold Price: $2,070/oz.
- Silver Price: $23.66/oz.
- Bitcoin Price: $44,842/oz.
- Ethereum Price: $2,364/oz.
Shockingly, gold isn’t the star of the show this January. Both Bitcoin and Ethereum have enjoyed incredible bull runs over the past couple of months and still haven’t shown any signs of relenting.
As of January 3, Bitcoin is up 6.23% over the pasrt 30 days while Ethereum saw a 7.4% gain over the 30-day period beginning December 2.
Key to this revival is the imminent debut of Bitcoin’s first ETFs. These funds are drawing institutional investors, offering a more accessible and balanced approach to cryptocurrency investment compared to direct buying.
Recently, the SEC witnessed a surge in S-1 amendment filings from Bitcoin ETF initiatives, including notable names like Invesco Galaxy, WisdomTree, and Fidelity. Notably, JPMorgan is involved as a major Authorized Participant in Invesco’s ETF.
Cathie Wood, CEO of Ark Invest, has recently suggested that the upcoming spot Bitcoin ETF could be approved by the SEC as early as this month.
The anticipation surrounding these institutionally-supported Bitcoin ETFs has rekindled interest in cryptocurrencies lately. In the face of global financial uncertainties, many investors are turning to Bitcoin to diversify their portfolios.
Despite the growing interest in Bitcoin and, by extension, the entire cryptocurrency asset class, gold is still top of mind for many investors. Central banks globally, including those in the U.S., China, and Turkey, have been aggressively increasing their gold reserves, signaling a strong belief in gold’s value as a safeguard against economic and geopolitical upheaval.
In Q3 2023 alone, central banks collectively added 337 tonnes of gold assets to their coffers. Only one Q3 has surpassed this pace of central bank gold acquisition—Q3 2022.
With gold shining brighter than ever, and Bitcoin currently trading around $45,000 per token, marking a significant year-to-date gain of +170%, now appears to be the time to get in on the gains.
As we delve deeper into 2024, it’s a pivotal time for investors to consider both traditional and modern assets. Gold’s unprecedented rise and Bitcoin’s robust performance offer unique opportunities for portfolio diversification.
For those considering an investment in gold or Bitcoin, it’s crucial to explore reputable gold IRA companies. Our exclusive reviews offer insights into top service providers in the industry, helping you navigate the options for integrating alternative assets like Bitcoin, gold, and silver into a self-directed IRA or retirement account.
Liam Hunt, M.A., is a financial writer covering global markets, monetary policy, retirement savings, and millennial investing. His commentary and analysis have been featured in the New York Post, Reader's Digest, Fox Business, and Forbes.
