This is Why Gold Outperforms Bitcoin

The crypto market has actually completely collapsed in the past week. The king of cryptocurrencies, bitcoin (BTC)In fact, at the time of writing, it is trading at just over $21,000. There is certainly some pain in other markets as well, but for now gold and silver seem to be holding up very well in this economically turbulent period.

The gold price holds

To indicate the current price of gold, it is first of all important to zoom out to the past period. On March 8, the gold price was able to rise to just above $2,040 per ounce. This had everything to do with the outbreak of the war in Ukraine. People frantically searched for a way to protect their wealth, causing the price of gold to explode. According to Bart Brands, precious metals specialist at GoldRepublic, this peak at the beginning of March could be described as a “panic peak.”

Then the price of the precious metal plunged again by more than 10% in a few weeks. When things had calmed down a bit, you then saw a strong phase of consolidation emerge. We are still in this now.

“I think that’s fundamentally nice to see, because you could say that gold, after the outbreak of the conflict in Ukraine, has shown that it has not reacted very strongly despite noise in the market.”

There was also a huge panic in other markets following new measures by, in particular, the US central bank to curb inflation. However, the gold price remains very stable again and there are no strong reactions for the time being. Bart Brands argues that this once again confirms that gold may be the ultimate way to protect your wealth when the macroeconomic environment begins to show cracks.

“Gold and bitcoin are different here. Bitcoin is not yet, not yet, perhaps never digital gold.”

If we translate these macroeconomic factors into the gold price, it can again be said with some caution that things are not looking particularly bad. The price of a U.S gold is at $1,844 at the time of writing. That is an increase of just over half a percent compared to yesterday. Importantly, gold has been able to maintain the support zone around $1,815. In fact, the bounce actually looked really good.

At the time of writing, the price is moving cautiously towards a zone of resistance at $1,880. If the price manages to break through this, a further rise may be heralded.

Should the course not be able to enter this zone of resistance traverse, there is a chance that the price will first take a step back. A possible zone of support is then around $1,800, which of course also represents a psychological limit.

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The silver price

The silver price shows a different story than the gold price, but is broadly quite comparable. However, the volatility of the silver price is, as we are used to with silver, a bit higher. The price of silver can sometimes rise enormously and then plummet again. According to Bart Brands, this is because the function of silver is two-sided:

“I call silver a ‘schizophrenic metal’. Why? Because silver has been a form of money for 4000 years, but it is also an industrial metal. It is used in everything. Because it’s schizophrenic, I feel like the market doesn’t really know how to value silver. You can see that in the race.”

A very important price point that we can look at for silver in the near term is, on the upside, a zone of resistance around $22. Since the end of 2020, this point has acted as a strong support, but unfortunately this zone was lost in mid-May. This happened after, like gold, silver showed a ‘panic spike’ as a result of the Russian invasion of Ukraine. That is why that same zone around USD 22 has turned into resistance at the time.

At the time of writing, the silver price is already hitting this important point. If this zone is broken, that is a special crucial recapture for the silver price. However, if it is not possible to break through this again, silver may well take a significant step back.

GoldRepublic

GoldRepublic is a Dutch platform based in Amsterdam where you can buy and sell various precious metals. GoldRepublic was founded in 2008 by Marleen Evertsz and Kasper Luursema and meanwhile the company has grown into one of the largest platforms in the Netherlands where people can invest in precious metals such as gold and silver.

The actual possession of this gold is an important aspect when investing in precious metals with GoldRepublic. You invest physically in, for example, gold and in this way you get sovereign ownership. Crypto investors who consider it important to protect their assets in the current economic climate, would do well to consider investing in precious metals.

For more information about GoldRepublic and investing in gold, silver and platinum, please visit the GoldRepublic’s website† You can read more about this gold trader on the GoldRepublic company page

Create an account with GoldRepublic and receive your first gram of gold for free.

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