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Ripple Reveals Exchanges for Stablecoin RLUSD Launch

Ripple Reveals Exchanges for Stablecoin RLUSD LaunchRipple has announced that its new USD-denominated stablecoin, RLUSD, will be available globally through strategic partnerships with major platforms, including Uphold, Bitstamp, Bitso, Moonpay, Independent Reserve, Coinmena, and Bullish. Fully backed by U.S. dollar reserves, government bonds, and cash equivalents, RLUSD is positioned to enhance financial solutions while ensuring transparency and stability. Ripple Introduces RLUSD […]

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Gold Fever Hits Costco: 77% of Stores Sell Out Amid Soaring Demand for Bullion

Gold Fever Hits Costco: 77% of Stores Sell Out Amid Soaring Demand for BullionCostco’s gold bars are flying off the shelves as record-high gold prices spark a buying frenzy across the U.S. A recent survey found that 77% of Costco stores offering gold sold out in early October. The trend reflects growing demand for gold as a hedge against inflation and economic uncertainty. Costco’s Gold Bars Are Selling […]

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Silver Squeeze: Precious Metal Soars 11.8% in 5 Days, Reaching Its Highest Price Since 2013

Silver Squeeze: Precious Metal Soars 11.8% in 5 Days, Reaching Its Highest Price Since 2013This week, the price of one ounce of silver has seen a significant rise. Over the past five days, silver has increased by more than 11% against the U.S. dollar, surpassing gold’s 2.3% five-day gain. Silver reached $31 per troy ounce for the first time since February 2013. Silver Hits $31 per Ounce, Outperforms Gold […]

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Costo sells out of gold bars, but is it a better investment than Bitcoin?

Gold bars recently sold out at Costco, reflecting investors’ souring mood about the economy. Is there a silver lining for Bitcoin?

Costco has made headlines this week after it rapidly sold out of gold bars. In times of economic uncertainty and rising inflation, it's no surprise that investors are turning to traditional safe-haven assets like gold. The question is whether gold’s performance will eventually catapult its price above $2,050, a level last seen in early May.

In the past 12 months, the price of gold has surged by an impressive 12%. This rally has been partially fueled by the Federal Reserve's efforts to combat inflation by maintaining higher interest rates, a move that benefits scarce assets like gold. While gold's performance is commendable, it's essential to put it into perspective.

Gold (yellow) vs. Bitcoin (orange), S&P 500 (green) and WTI oil (black), last 12 months. Source: TradingView

Over the same period, gold's returns have roughly matched those of the S&P 500, which saw a gain of 15.4%, and WTI oil, which increased by 12%. However, these gains pale in comparison to Bitcoin's staggering 39.5% rise. Still, it's important to note that gold's lower volatility at 12% makes it an attractive choice for investors looking to manage risk.

Risk-reward scenarios favor gold

One of gold's strongest selling points is its reliability as a store of value during times of crisis and uncertainty. Gold's status as the world's largest tradable asset, valued at over $12 trillion, positions it as the primary candidate to benefit from capital inflows whenever investors exit traditional markets like stocks and real estate.

Gold (yellow) vs. Bitcoin (orange), S&P 500 (green) and WTI oil (black), Feb/Mar 2020. Source: TradingView

For example, at the height of the COVID-19 pandemic. In the 30 days leading up to March 24, 2020, gold only dipped by 2.2%.

According to data from Gold.org, central banks have been net buyers of gold for the second consecutive month, adding 55 tons to their reserves, with notable purchases by China, Poland and Turkey.

Bloomberg reported that Russia is planning to bolster its gold reserves by an additional $433 million to shield its economy from the volatility of commodity markets, especially in the oil and gas industries.

200 years of gold production. Source: Visual Capitalist

Taking a closer look at production figures, Visual Capitalist estimates that approximately 3,100 tonnes of gold were produced in 2022, with Russia and China accounting for 650 tonnes of this total. The World Gold Council also predicted that if gold prices continue to rise, total production could reach a record high of 3,300 tonnes in 2023.

One crucial metric to consider when evaluating gold's investment potential is its stock-to-flow ratio, which measures the production of a commodity relative to the total quantity in existence.

Related: Bitcoin price holds steady as S&P 500 plunges to 110-day low

Gold's stock-to-flow has remained stable at around 67 for the past 12 years. In contrast, Bitcoin has experienced three scheduled halvings, effectively reducing its issuance, and currently boasts a stock-to-flow ratio of 59. This suggests that Bitcoin has a lower equivalent inflation rate compared to the precious metal.

Bitcoin can outperform gold even with lower inflows

Bitcoin’s performance could surpass gold’s as the U.S. government approaches a shutdown due to reaching the debt limit, causing investors to seek alternative scarce assets. Bitcoin’s $500 billion market capitalization makes it easier for the price to jump even if its inflow is much smaller. Additionally, central banks could be compelled to sell their gold holdings to cover expenses, further boosting Bitcoin's appeal.

There's also the possibility of new gold discoveries. While gold remains a stalwart in the world of safe-haven assets, Bitcoin's impressive gains and lower equivalent inflation rate make it a strong contender for investors seeking alternative stores of value. Despite this, the ongoing economic uncertainty and the Federal Reserve's monetary policies will continue to benefit both assets.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Report: Perth Mint Faces $9 Billion Recall From China Over ‘Doped’ Gold Scandal

Report: Perth Mint Faces  Billion Recall From China Over ‘Doped’ Gold ScandalPerth Mint, Australia’s official bullion mint, currently faces a $9 billion recall from China for allegedly selling “doped” bullion and attempting to cover it up, as reported by Australia’s ABC News. The practice of doping gold involves adding impure ore like silver to the mix to cut costs and lower the quality of gold. Reportedly, […]

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UK’s Royal Mint Reveals Record Profits Amid Significant Demand for Physical Gold and Silver

UK’s Royal Mint Reveals Record Profits Amid Significant Demand for Physical Gold and SilverWhile the price of gold has dropped in value from the asset’s all-time high on March 8, the U.K.’s oldest precious metals (PMs) company, the Royal Mint, saw record profits over the last 12 months. In fact, the Royal Mint’s annual earnings show the firm has seen the highest profits in 12 years, with PMs […]

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Report: UK Gold Dealer Sold Out of Bullion After Pound’s Record Fall Causes Demand to Skyrocket

Report: UK Gold Dealer Sold Out of Bullion After Pound’s Record Fall Causes Demand to SkyrocketThe United Kingdom-based gold dealer, Ash Kundra, has claimed that he recently ran out of gold coins and bars after the demand for the precious metal skyrocketed. The pound’s plunge to a record low versus the dollar, as well as the turmoil in financial markets, is said to be the cause of the sudden increase […]

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Gold Spikes Higher as Fed’s Minutes Report Looms, Central Bank Bullion Purchases Begin to Swell

Gold Spikes Higher as Fed’s Minutes Report Looms, Central Bank Bullion Purchases Begin to SwellAfter a long break, monthly purchasing data shows that central banks are buying gold again. The World Gold Council says throughout March and April, the organization recorded a higher level of central bank monthly gold purchases and the latest data from May shows the exact same trend. Gold Rises After Data Shows Central Bank Gold […]

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