Gold falls after an eight-week rally, while Bitcoin soars above $115,000. Here’s what the markets are sensing (and what it means for risk investors).
Markets tend to price in the Federal Reserve’s moves. And gold has fallen 6% after eight consecutive weeks of gains and Bitcoin soaring back to the $115,000 level are no coincidence.
Traders call it a ‘risk-on’ phase, when capital flows back into more volatile assets, driven by a sudden sense of confidence. It’s happened before, but the timing this time is suspect. It all comes just before the Federal Reserve meeting, expected this week, when Jerome Powell is expected to announce a 25-basis-point cut. The market, however, already seems to know how it will end.
Gold stalls, Bitcoin accelerates: markets are rotating back into risk
In recent weeks, gold had returned to the forefront, driven by geopolitical tensions and the idea that the Fed might further cut rates decisively. Then, suddenly, the rally came to a halt. Bullion has lost more than 6% from its all-time high of $4,380 an ounce, falling toward $4,030, amid ETF outflows and broad profit-taking. A decline that, rather than signaling structural weakness, looked more like a consolidation after a long rally.
What’s new is that, during gold’s decline, Bitcoin has rebounded. In a week, the price has risen more than 5%, driven by renewed appetite for risky assets and the perception that the worst for US monetary policy is now behind us. The Bitcoin/Gold ratio, an unofficial barometer of global sentiment, has begun to reverse course from oversold levels. A signal that many analysts have interpreted as the prelude to a change in sentiment. So, less fear, more confidence in the liquidity that could once again flood the markets.
The Fed is setting the stage, traders are reading between the lines
The September rate cut has ushered in a new era for the US central bank. After two years of restrictive policy, the Fed appears poised to cut by another 25 basis points, bringing the federal funds rate to a range of 3.75%–4.00%. But it’s not the decision itself that’s moving the markets: it’s the narrative that accompanies it.
If Powell suggests that the easing cycle has room to continue in the coming months, the signal will be clear: ample liquidity, falling real yields, and greater room for risk assets. In other words, a supportive backdrop for a short-term rally in Bitcoin, tech stocks, and emerging markets. Conversely, an overly cautious tone would reignite demand for safe haven assets, with gold poised to regain center stage.
Understanding the interplay between gold and Bitcoin is not just a technical factor for traders, but a compass for global sentiment. When the former declines and the latter accelerates, the message is that liquidity is returning and the market is willing to take risks. The Fed hasn’t spoken yet, but investors are already positioning for the next trend.
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The information and considerations contained in this article should not be used as the sole or primary basis for making investment decisions. Readers retain full freedom in their investment choices and full responsibility for making them, as only they know their risk appetite and time horizon. The information contained in the article is provided for informational purposes only, and its disclosure does not constitute and should not be considered an offer or solicitation to the public.
Original article published on Money.it Italy 2025-10-27 15:20:32. Original title: Cosa c’è (davvero) dietro il calo dell’oro e il rally del Bitcoin
