Demand for gold doubled on one major platform in May as crypto crashed, casting doubt on bitcoin as an inflation hedge
Golddemand rose and prices moved sharply higher in May as inflationfears came to the fore.
cryptocurrenciescrashed, dealing a blow to the argument that bitcoinis "digital gold."
- Analysts said the
Federal Reserve's stimulus had also helped support the gold market.
Demand for gold jumped more than 97% in May while prices moved sharply higher, a leading metal-trading marketplace said, as investors looked for shelter against rising inflation.Meanwhile, bitcoin and other cryptocurrencies tumbled during the month, dealing a blow to the argument that investors see digital tokens as protection against inflation.
View all Offers
- 17% OFF
Mi Smart Band 5 – India’s No. 1 Fitness Band, 1.1-inch AMOLED Color Display, Magnetic Charging, 2 Weeks Battery Life, Personal Activity Intelligence (PAI), Women’s Health Tracking₹ 2499₹ 2999Buy On
- 75% OFF
OFIXO Multi-Purpose Laptop Table/Study Table/Bed Table/Foldable and Portable Wooden/Writing Desk (Wooden)₹ 492₹ 1999Buy On
- 66% OFF
Samsung EVO Plus 64GB microSDXC UHS-I 100MB/s Full HD & 4K UHD Memory Card with Adapter (MB-MC64HA)₹ 649₹ 1899Buy On
- 62% OFF
Boya BYM1 Omnidirectional Lavalier Condenser Microphone with 20ft Audio Cable (Black)₹ 750₹ 1995Buy On
- 51% OFF
Lenovo 300 Wired Plug & Play USB Mouse, High Resolution 1600 DPI Optical Sensor, 3-Button Design with clickable Scroll Wheel, Ambidextrous, Ergonomic Mouse for Comfortable All-Day Grip (GX30M39704)₹ 249₹ 506Buy On
"Any debate about crypto replacing gold as a core portfolio asset just got a very blunt answer," said Adrian Ash, director of research at London-based BullionVault.Bitcoin sank more than 30% in May after Elon Musk's Tesla said it would stop accepting the asset as payment for its cars, and China's central bank signaled a new crackdown.
Ash said it's impossible to say whether investors sold bitcoin to buy gold, however.He said a key driver of gold's rise was investors' worries about inflation. In the US, consumer prices shot up 4.2% year-on-year in April, according to data released in May that unnerved
One sign of investor appetite for gold has been a marked rise in total holdings in gold exchange-traded funds, according to Saxo Bank. At the same time, the metal's price has been supported by ultra-loose monetary policy from central banks.
The Danish bank's head of commodity strategy, Ole Hansen, said in a note that one driver has been the Federal Reserve's "tsunami of liquidity" which has held bond yields down and sent investors looking elsewhere.Ash said May's cryptocurrency crash was evidence that bitcoin can't be trusted to hold its value when inflation threatens to erode other assets.
"There's volatility and then there's bitcoin - or crypto, more broadly," he said. "[Gold] has never halved in value inside a week."
- Facebook’s first smart glasses in partnership with Ray-Ban are coming soon but don’t get too excited yet
- Shortform apps to take over second spot in users time spent after Internet giants like Facebook and Google: RedSeer
- OPINION: Rupee exchange rate against the Euro may improve to 86 in the near term
- Mortgage startup Easy has raised $15 million to provide quick home loans in a matter of days
- Tatva Chintan Pharma Chem IPO makes strong listing on exchanges with 100% premium, shares open at ₹2,111