Gold Rally Takes Breather in Boost for BTC Bulls

Gold’s record-breaking run took a breather this week, snapping an eight-week winning streak as traders took profits ahead of the Federal Reserve’s October policy decision.

The retreat has eased safe-haven demand and, for the first time in weeks, tilted some attention back toward risk assets including bitcoin BTC$111,700.54.

Spot gold fell more than 6% from its all-time high above $4,380/oz touched on Monday, settling near $4,120 by the weekend. The pullback was driven by profit-taking, heavy exchange-traded fund (ETF) outflows, and a shift in tone around US–China trade relations.

Officials from both countries said they reached a “preliminary consensus” on key trade issues, easing fears of a new tariff cycle that had fueled the metal’s climb.

“The threat of 100% tariffs on Chinese goods is effectively off the table,” US Treasury Secretary Scott Bessent said Sunday, after two days of talks in Malaysia set the stage for a broader deal between President Trump and President Xi Jinping.

The softer macro backdrop, combined with expectations that the Fed will cut rates by another 25 basis points this week, took the shine off gold’s parabolic rally. Silver and platinum also slid sharply in signs of a reset before Wednesday’s decision.

But the timing may prove fortuitous for BTC.

After lagging gold for most of the quarter, Bitcoin has gained over 5% in the past week, reclaiming the $113,500 level and breaking free from a narrow, month-long range.

The move comes as the BTC/gold ratio — a measure of Bitcoin’s relative value against the yellow metal — flashed its most oversold reading in nearly three years earlier, according to CoinDesk analyst Omkar Godbole.

The ratio’s 14-day Relative Strength Index (RSI) dropped to 22.20 last week, below its February low and the weakest since November 2022. Historically, such extremes in the BTC/gold ratio have coincided with local bottoms for Bitcoin, often followed by periods of outperformance as traders rotate back into higher-beta assets once macro fear subsides.