Rising US Government Debt Pushes Gold Prices to Highs, Competition with BTC Increases

Since the beginning of summer, gold has demonstrated steady growth against the backdrop of an unprecedented increase in the US national debt. This was stated by analysts from Matrixport. After Congress approved raising the debt limit by $5 trillion, the Treasury Department has already issued new bonds worth $1.2 trillion. According to experts, this dynamic has become the key factor in the growth of the precious metal price, which has consolidated at around $2,214 per ounce. Experts explained why the competition between the precious metal and Bitcoin (BTC) is gradually growing.

The researchers emphasized that the surge in bond issuance coincided with an acceleration in gold's growth. Investors are increasingly seeking safe havens, fearing that increasing debt could negatively affect the long-term stability of the U.S. economy. With budget expenditures rising and confidence in U.S. fiscal discipline weakening, gold is regaining its role as a safe haven.

“Another factor was the political context. Donald Trump's growing influence on the process of appointing Fed officials creates uncertainty. His supporters may soon gain a majority, which increases the risks of a revision of monetary policy. Such expectations are pushing investors towards gold as a more predictable asset,” the experts said.

Interest in the precious metal is growing not only in traditional financial circles, but also in the crypto sector. According to analysts, traders are increasingly transferring capital into tokenized gold, which confirms its importance in the digital economy. These instruments allow combining the reliability of a physical asset and the convenience of working in the blockchain.

However, competition with Bitcoin is intensifying. Gold is still closely correlated with the digital coin, but some investors prefer to distribute capital between both instruments. This strategy allows diversifying risks and maintaining flexibility in conditions of high volatility.

Source: cryptonews.net