Bank Of America Says Gold Is The Ultimate Safe Haven, What About Bitcoin?đ đ§
Bank of America: Gold Outshines Bonds as Safe Haven
Bank of America strategists, who have long been strong proponents of goldâs benefits, particularly at a time of rising inflation, said its relative attractiveness against traditional havens of safety, such as government bonds, is improving as risks accumulate. However, even though it embraced blockchain, it is still very cautious about Bitcoin and crypto.
The bank added that, logically speaking, investors, including central banks, should shift toward the yellow metal. They see it as a hedge against inflation and currency devaluation because of growing government debt. More surprisingly, US PPI Inflation, up to 1.8% from the expected 1.6%, has rejuvenated fears of a possible slump in Bitcoin. This rise in the PPI indicates that inflationary pressures are firmer in the economy. This might result in the Federal Reserve keeping a more hawkish interest rate posture.
This shift is because of fiscal concerns and economic uncertainty. Therefore, it makes gold a better choice amid growing financial pressures and worldwide macroeconomic challenges.
On the other hand, some experts, like BitMex co-founder Arthur Hayes, think that war, especially in the Middle East, has a sobering impact on the USâs rush to increase government spending. This means more money printing and inflation. In his opinion, this will boost the Bitcoin price.
One fundamental driver is growing fiscal stress, which is there because of the US national debt, that could balloon to record highs. The cost of servicing this debt is also likely to rise as a percentage of GDP in the next few years.
This fiscal outlook brightens the appeal of gold, thereby establishing the reason behind Bank of America continuing target of $3,000 per ounce. Fiscal expansion seems to be supported by both main US presidential candidates, Kamala Harris, and Donald Trump. The likelihood of higher spending in the future is, therefore, increased.
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