Many people consider gold a safe-haven asset, but recent market movements have reminded us once again:

Being a safe-haven asset doesn’t mean its price only goes up.

On November 12, the international gold price briefly fell to $3,948.82 per ounce. In addition to changes in market sentiment, the decline was driven by a stronger U.S. dollar and expectations that the Federal Reserve may continue raising interest rates.

The reasoning is simple:
If the market expects interest rates to keep rising, gold, which doesn’t generate interest, may become less attractive.
A stronger U.S. dollar also means investors in other countries face higher costs when buying gold.

So, when analyzing gold, we can’t look only at global events. And when analyzing Bitcoin, we can’t look only at safe-haven demand.

What really affects asset prices also includes how much capital is available in the market, how interest rates are changing, and where investors are willing to put their money.

Going forward, I’ll be keeping a close eye on inflation data, expectations for Fed policy, and movements in the U.S. dollar and gold prices.

Understanding the flow of capital helps us better understand market movements.

The above is for market observation only and does not constitute investment advice.