Gold prices have been dropping quickly this week, falling 8%. This behavior is unusual – it’s acting more like the volatile cryptocurrency Bitcoin than a safe investment during uncertain economic times.
Gold prices have fallen 15% since reaching a peak of $5,500 per ounce in late January. On Wednesday, the price dropped to $4,550, its lowest point in ten weeks, according to GoldPrice.
Bloomberg analysts pointed out on Tuesday that gold, often seen as a safe investment during times of conflict, didn’t protect investors during the recent events involving Iran – its price actually fell along with other assets.
Gold Little Correlated With Stocks
The big move is something that is expected in volatile crypto markets, not stable gold.
This serves as a stark but important reminder that precious metals don’t typically move with the stock market and can act like any other risky investment when money becomes scarce.
According to Bloomberg ETF analyst Eric Balchunas, gold isn’t a consistently dependable investment to offset risk. He notes that Bitcoin shares this characteristic, but tends to move more in sync with the stock market.
“Both unpredictable but valid asset classes, and shouldn’t be judged based on short time frames.”
I wrote today about how investors recently saw a clear reminder that gold doesn’t move in opposition to stocks – it has no real correlation at all. That’s an important distinction. While gold can be a good way to diversify a portfolio, it’s not a dependable hedge against stock market drops. Bitcoin is similar, but it actually has a moderate correlation with stocks (around 0.45). Both assets are unpredictable, but they can still be valid investments.
— Eric Balchunas (@EricBalchunas) March 24, 2026
Peter Schiff, a well-known gold investor, recently stated that the current situation should reinforce positive expectations for gold, especially for those who already believed in its potential before the war began.
The conflict is causing significant economic problems for the US, including much larger budget deficits, rapidly increasing costs for food and energy, a potential recession, job losses, and falling prices in the stock market, bond market, and housing market. It also poses a greater risk of terrorism and could trigger a broader financial crisis.
As a researcher following the gold market, I’ve observed a significant downturn this week. Investors seem to be losing confidence, triggering a sharp sell-off. Reports from CNBC indicate gold has officially entered bear market territory, largely due to a strengthening US dollar and rising Treasury yields, which are making gold less attractive as an investment.
Bitcoin ETFs Performing Well
In another update, Balchunas noted that Bitcoin ETFs have received $2.5 billion in investments this month and are very close to recovering all the money lost so far this year.
“Again, incredible fortitude in the face of 40% six month price drop and widespread media pile on.”
About ten years ago, when the price of gold dropped 40% quickly, roughly a third of its investors sold their holdings, he noted.
Bitcoin’s price is currently stable around $70,000, moving sideways in a range it’s been in since early February. Despite this, the price is gradually increasing, showing signs of potential growth.
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2026-03-25 09:48