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Au or BTC? Better Store of Value

by Chirag Sharma
Au or BTC? Better Store of Value

Given that over the past 6 months both Au and BTC have not lived up to their expectations as a safe haven asset class to combat the rising inflation.

However, it is interesting to note that in recent weeks, both Gold and Bitcoin have reversed their trends and have started attracting investor capital.

At the time of writing this post, Gold is hovering around $1,770 and Bitcoin at $22,940. They reached a lowest low of $1,700 and $18,000 respectively in 2022.

The Federal Reserve last week sounded less hawkish and hinted that it could slow the pace of the policy tightening campaign at some point amid signs of a slowdown. Adding to this, the disappointing release of the Advance US Q2 GDP report confirmed a technical recession and fueled speculations that the Fed would not hike interest rates as aggressively as previous estimates.

This, in turn, exerts some follow-through downward pressure on the USD for the fourth successive day.

Apart from sustained USD selling, the prevalent cautious mood around the equity markets further offers some support to the safe-haven gold. The recent optimistic move in the markets runs out of steam amid growing worries about a global economic downturn.

Investors might also refrain from placing aggressive bets ahead of this week's key central bank event risks. The Reserve Bank of Australia (RBA) will announce its policy decision on Tuesday and the Bank of England meeting is scheduled on Thursday. Eyes will be focusing on the US monthly jobs report this Friday which is also an important driver of US Dollar.

Whilst many have their reasons for preferring one or the other or both, in your opinion, which asset class is a better store of value in the short term?