Bitcoin (BTC)-Gold (XAU) Ratio Drops to 34, the Lowest Since Nov. 14

Gold (XAU) is reaffirming its status as a safe haven asset amid ongoing fears of a U.S.-led trade war, while bitcoin (BTC) struggles to gather upside traction.

The price of gold (XAU) continues to highlight its status as a safe-haven asset as concerns over a U.S.-led trade war persist, while bitcoin (BTC) faces challenges in gaining upward momentum. This dynamic is evident in the declining bitcoin-gold ratio.

The ratio of bitcoin's USD price to gold's per-ounce dollar price has dropped to 34, marking the lowest level since Nov. 14 and nearing the previous peak reached in March 2024, according to data from the charting platform TradingView. The ratio has declined by 15.4% since reaching a high of over 40 in mid-December.

Gold's year-to-date increase of nearly 10% to a record per-ounce price of $2,877 has been attributed to safe-haven demand amidst the escalating U.S.-China trade war, as reported by Reuters.

The threat of tariffs has driven the Comex futures prices for metal products to trade significantly higher than the spot price in recent months. This has prompted traders to load U.S.-bound aircraft with the precious metal. According to The Guardian, investment banking giant JPMorgan is set to deliver $4 billion of gold bullion to New York this month. Additionally, Chinese demand for gold has surged ahead of the Spring Festival holidays.

Meanwhile, according to 10x Research, inflows into U.S.-listed spot Bitcoin (BTC) ETFs have primarily originated from traders engaging in non-directional arbitrage bets on BTC.

"The ETF buying could be offset by simultaneous spot or futures selling (unwinding of long positions), dampening any significant price impact," Markus Thielen, founder of 10x Research, stated in a note to clients on Monday, highlighting the $4 billion in inflows into the U.S. spot-listed ETFs following the release of inflation data three weeks ago.