- Trump threatens to derail trade talks with China, standing firm on Beijing making huge agricultural purchases.
- U.S. stocks decline as investors move capital into safe-haven assets.
- Bitcoin yet again fails to act as a hedge while gold surges.
Gold outperformed its rival bitcoin on Wednesday as trade talks between the U.S. and China seemed to hit an impasse.
President Donald Trump on Tuesday threatened to slap more tariffs on Chinese goods, a move that could thwart the White House’s plans for a “phase one agreement.” Investors took Trump’s words as a cue to move out of risk-on assets, causing declines in the Dow Jones, Nasdaq and S&P 500. They instead jumped at haven assets, sending the yield on 10-year Treasurys to 1.751% from 1.784% on Tuesday. At the same time, the hedging sentiment helped gold rise as much as 0.5%to set an intraday high of $1,478.739 an ounce.
Bitcoin Unfazed by Trade Situation
Investors, meanwhile, maintained a safe distance from bitcoin. During Wednesday’s session, the bitcoin-to-dollar exchange rate slipped by 0.4%. The downside move extended the pair’s weekly losses to 4.8%. On a month-to-date scale, it declined 11.70% on U.S.-based Coinbase exchange.
But analysts believe bitcoin is merely neutralizing its long-term bias after spiking earlier this year. Pseudonymous trader Bitcoin Jack sees the cryptocurrency inside a large upside parabola – an indicator that determines the direction and potential reversal of an asset. The analyst tweeted Tuesday that the price could fall to as low as $5,000, adding:
“Bitcoin will have to prove to me it’s bullish. Until then, parabola case study stands and correction is expected to continue.”
Until I can see clear conviction derived from bullish PA, parabola case study still stands and we have still not corrected close to any…