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Gold Corrects After Soaring in January & Bitcoin Rallies: Signs of Things to Come?
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Last Updated on: 9th March 2023, 12:29 am
For alternative investors, the new year started off on the right foot as gold and Bitcoin both saw large gains that coincided with strong growth for the S&P 500 and Dow Jones. Although platinum and silver dipped in value, most well-diversified portfolios walked away from January well into the green—welcome relief after a bearish 2022.
Here’s a quick glance at how the top alternative and conventional assets performed over the 30 day period ending February 6:
- Gold: +0.1% ($1,865)
- Silver: (-6.24%) ($22.35)
- Platinum: (-9.93%) ($979.25)
- Palladium: (-4.71%) ($1,632)
- Bitcoin: +36.5% ($23,051)
- Ethereum: +31% ($1,651)
- S&P 500: +5.61% ($4,114)
(Note: All precious metals prices listed above denote per-ounce pricing in USD.)
As usual, gold prices held steady over the month of January, refusing to dip below the $1,860 price floor after rallying above the $1,900 mark toward the end of the month.
Mass media sources are starting to pay closer attention to gold’s utility as an investment. A recent NPR article did a good job summarizing gold’s resilience in the face of inflation, declining stock pieces, and the still-ongoing Crypto Winter.
Gold is a time-tested value store, and an increasing number of Americans are catching on. In fact, global gold demand rocketed +20% in 2022—demand levels that the yellow metal hasn’t seen in over a decade.
Bitcoin, meanwhile, is the (mostly) unsung hero of the New Year. The cryptocurrency saw dramatic growth over the past month, coinciding with broader market growth in the equities sector. As we’ve seen before, crypto performance tracks stock performance.
Major stock indices such as Morningstar US Market Index and the S&P 500 saw 6.8% and 5.6% growth on the month despite strong geopolitical headwinds. The optimism in the markets had a trickle-down effect on stock-correlated assets, such as Bitcoin and Ethereum.
If the stock market continues to grow, we could see cryptocurrencies make a resurgence in the year ahead. Interest rate uncertainty, however, makes it difficult to make any sweeping predictions regarding whether this will come to fruition—the same can also be said of whether the general public’s appetite for crypto can recover from the much-publicized FTX fallout.
All in all, stocks and gold were the big winners in January. While stocks may have been a surprise for many, gold, once again, proved its value as a failsafe asset during times of uncertainty.
If you’re wondering whether to load up on gold, first ask whether your portfolio can withstand another 2021 or 2022. For investors with longer time horizons in mind, this might be the case. For those nearer to retirement, it may be wise to consider reallocating some of your savings in inflation-resistant assets such as gold.
Ready to invest today? Check out our list of the top gold IRA companies—many of which are currently waiving first year fees for new sign-ups.