Gold prices climbed to around $4,310 per ounce on Monday, approaching its all-time high.
The rally reflects a flight to safety as investors navigate uncertain monetary policy.
Gold reached a record $4,379.22 on October 17, according to LiteFinance data.
The precious metal has surged more than 25% year-to-date, marking one of its strongest annual performances.
Meanwhile, Bitcoin (BTC) remains around $87,000 after a sharp selloff triggered $200 million in long liquidations on Monday.
What Happened
Gold continues to benefit from strong central bank purchases and robust ETF inflows.
Holdings in gold-backed exchange-traded funds have risen every month this year except May.
Federal Reserve rate cuts, persistent central bank buying, and steady institutional demand fueled the rally.
The U.S. dollar near a two-month low during the Asian session provided additional tailwinds for bullion.
As rates decline, the opportunity cost of holding gold falls compared to interest-bearing investments.
Bitcoin has fallen approximately 30% from its October peak of $126,272.
The leading cryptocurrency hit its all-time high on October 6 before entering a correction.
While gold acts as a safe-haven asset in turbulent times, Bitcoin often trades like a risk asset.
The digital currency suffers outflows when investors seek stability amid market uncertainty.
Crypto trader Michaël van de Poppe noted that Bitcoin's performance against gold has weakened significantly.
Technical analyst misterrcrypto shows the BTC/Gold pair has been testing a long-term ascending support line.
The Z-Score sits at -1.76 in oversold territory, according to his analysis.
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Why It Matters
The widening gap between gold and Bitcoin highlights contrasting investor sentiment.
Gold's rally reflects demand for traditional safe-haven assets during economic uncertainty.
Markets are closely watching this week's U.S. economic data for monetary policy clues.
The Bureau of Labor Statistics released combined employment reports for October and November on Tuesday.
However, key details including October's unemployment rate are missing.
This creates the first-ever gap in that critical data series due to a six-week government shutdown.
Technical patterns suggest Bitcoin may be oversold relative to gold.
Prior touches of the long-term support line have led to substantial rallies in the BTC/Gold ratio.
Still, technical indicators do not guarantee future moves.
The current macroeconomic environment differs from previous cycles.
Inflation remains elevated and geopolitical risks continue to support demand for gold.
The extent to which investors rotate from gold to Bitcoin remains uncertain.
Markets assign high probability that the Fed will adjust interest rates in upcoming meetings.
Gold-backed ETFs have seen sustained inflows as investors hedge against inflation.
Bitcoin ETFs have experienced mixed flows amid the cryptocurrency's recent volatility.
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