Bitcoin Flying, Pressuring Gold Price

London (Dec 7)  Investors are always looking for safe places to put their money while measuring the risk on their investments. Traditionally the metals and bonds were places that they would go to for safety. Now the cryptocurrency has become a competitor for the dollars that used to go into the metals. Even though the Bitcoin is trading at $15,000 and is in some bubble formation, investors think of it as a safe-haven currency play, which it is not.

Bitcoin is in a blow-off pattern where time and price mean nothing. The fear or missing out has caused Bitcoin investors to lose their mind and pay any price to get in. With investors chasing the Bitcoin, gold is feeling the pain and is now in danger of breaking down. On a weekly chart, if gold closes below $1,265, this would be a breakdown and the recent bullish movement would be over.

The Bitcoin bubble will pop, and buyers will come back to gold. The only question is at what price this will happen. If we look at history, there is no way to know when the Bitcoin buyers will run out of steam. When they do, it will be ugly for the Bitcoin and bullish for gold, but our first concern is where will gold close on Friday -- below $1,265 will cause a great deal of heartburn. Gold owners and investors will need some Rolaids.

Reuters

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