U.S. stock market recorded more forced liquidations on Wednesday amounting $1.5 trillion

After Fed Chair Jerome Powell said that more volatility is likely ahead. With the trade war negotiations taking longer than anticipated

The U.S. stock market saw another round of forced liquidations on Wednesday, wiping out an estimated $1.5 trillion in market value in a single day. This dramatic downturn came shortly after Fed Chair Jerome Powell hinted at the prospect of more volatility in the coming months.

With the trade war dragging on longer than expected, investors are pulling out of the stock market and rushing into the Gold markets to preserve working capital.

The move is also being driven by the prospect of inflation to increase in the next few months, and investors are displaying midterm fear amid the weakening U.S. dollar against major currencies.

Gold Price Explodes

The yellow metal gathered more bullish momentum during the North American trading session on Wednesday as the trade tariff threatened to spill over into global stock markets.

In the past 24 hours, Gold price rallied over 3 percent to trade at about $3,337 at the time of this writing. Gold has continued with price discovery since its bullish breakout in October 2023, catalyzed by rising demand from global central banks led by China.

When Bitcoin?

The stellar cryptocurrency, Bitcoin, has earned the title digital gold in the past decade, especially after emerging from the 2008 financial crisis and thriving through the Covid-19 crash. As Coinpedia reported, the Federal Reserve already views Bitcoin as digital gold and not as a competitor for the United States dollar.

Consequently, the U.S. government, through President Donald Trump, is keen to tap into Bitcoin to reduce its huge debt burden.

From a technical standpoint, BTC price has in the past cycles experienced parabolic rallies every time that Gold price reached the peak of its rally. Based on historical trends, Gold price is expected to reach $3,500 in this cycle, or even higher depending on the trade war dynamics.

In the three-month candlestick, gold price has reached the top after the Relative Strength Index hit a minimum of 93, whereby it currently hovers about 83.