Bitcoin vs. Gold: Why Ray Dalio is Doubling Down on the Yellow Metal
AI Podcast
Gold prices rebounded to over $5,000, driven by strong bullish sentiment and recommendations from investors like Ray Dalio, with analysts setting targets as high as $8,500. Conversely, Bitcoin prices have weakened, hitting new lows around $73,000, and face bearish sentiment with potential further declines projected. Despite current weakness, Bitcoin's price could experience a rebound due to the extreme fear indicated by the Crypto Fear & Greed Index.
TradingKey - Gold returns to the $5,000 mark as Bitcoin prices weaken to hit new lows; what is the future outlook?
During the Asian session on Wednesday (February 4), gold (XAUUSD) prices continued to rebound and strengthen, reclaiming the $5,000 mark. Spot gold surged nearly 3% today, with the current price at $5,081 per ounce.
Spot gold price chart; Source: TradingView
Conversely, Bitcoin (BTC) price performance remains weak. This morning, Bitcoin prices dropped to around $73,000, hitting a new low since October 2024, before recovering to $76,399.
Bitcoin price chart; Source: TradingView
On January 29, spot gold prices spiked above $5,500 to reach a new all-time high, achieving a year-to-date gain of 25%, though that gain has since narrowed to 16%. During the same period, Bitcoin prices retreated from their highs to hit new year-to-date lows, with a cumulative decline of over 12% this year.
Currently, bullish sentiment for gold remains high. Ray Dalio, founder of Bridgewater Associates, stated in an interview at the World Government Summit in Dubai on Tuesday: "Gold remains the best choice for storing wealth, as an effective tool for hedging against economic downturns and diversifying risk. I suggest investors maintain a fixed allocation of gold in their portfolios."
Deutsche Bank (DB) believes gold may have further room to rise, with a target price of $6,000. Meanwhile, JPMorgan (JPM) analysts recently suggested that gold futures were overbought in the short term, but they are bullish on a long-term target of $8,000-$8,500, representing 60%-70% upside from current levels.
In contrast, Bitcoin remains overshadowed by bearish sentiment. Alex Thorn, Head of Research at Galaxy, believes Bitcoin prices could fall further to $70,000, or even as low as $56,000-$58,000; meanwhile, Compass Point analysts believe it could plummet to $55,000 in an extreme scenario.
However, judging by the fear index, Bitcoin prices could rebound and strengthen at any time. As of press time, the Crypto Fear & Greed Index is at 14, indicating a state of extreme fear. Based on past experience, when market sentiment hits extreme fear, Bitcoin prices typically experience a rebound.
Fear & Greed Index and Bitcoin price chart; Source: CoinMarketCap
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
