Cryptocurrencies impact on Gold

We have retested the impact of cryptocurrencies (Bloomberg Galaxy Cryptocurrency Index) on the gold price, and the conclusion is clear: a rise in the price of cryptocurrencies has a negative impact on the price of gold. (Many observers have noted this qualitatively manner – young investors who might otherwise be interested in gold have flooded to the crypto-market, a good friend of mine has opined.)

Statistically, once we account for the influence of other factors on the gold price, the latest tests suggest that a 30% rise in the price of Bitcoin will knock gold back about 1%. Given that the cryptocurrency index has risen about 100% since mid-July, this translates into a $50-60 decline in the gold price. A not insignificant decline, in other words!