Gold Price Outperforms Bitcoin as Powell Fans Inflation Fears: Are Rate Cuts a Pipe Dream?

Core Insights - A Deutsche Bank study suggests that Bitcoin could coexist with gold in central bank reserves by 2030, highlighting their roles as "complementary diversifications" while emphasizing the continued dominance of the US dollar [1][2]. Group 1: Gold's Position - Gold prices surged to an all-time high of $3,783 per ounce in September, driven by central bank purchases and geopolitical risks [2]. - Central bank demand for gold has increased for five consecutive quarters, marking the longest stretch since the 1970s [3]. - Gold is perceived as a safe haven during times of fear, contributing to its sustained demand and price increases [3]. Group 2: Bitcoin's Potential - Bitcoin remains more volatile than gold but has shown significant momentum, with prices reaching $123,500 in August and a 22.7% gain over the past 12 months compared to gold [4]. - The advantages of Bitcoin include capped supply, independence from government control, and ease of verification, making it attractive for private reserves and alternative funds amid inflation concerns [4]. Group 3: Central Banks and Market Influence - Central banks play a crucial role in managing reserves and influencing global markets, and even small Bitcoin allocations could lead to trillions in new institutional flows [7].