Gold and crypto prices soar as rattled investors look for a safe bet

The price of gold and cryptocurrencies such as Bitcoin, Ethereum and Dogecoin soared this week. These rallies in prices that were in the doldrums until a month ago have been widely attributed to investors buying “safe haven” assets on rising concern about the US Treasury market, as government debt exceeded $40tn for the first time (more than doubling in a decade). Inflation remains stubbornly high.

Other forces complicate the story, especially in crypto. Supportive new US regulations were proposed this week amid signs that Donald Trump may begin a fresh cheerleading effort for assets from which the first family has already made a fortune since his return to the White House.

The gold price on Friday stood at just over $4,600 an ounce, up by 5% from a week earlier. Bitcoin rose by nearly a quarter to over $78,500, mostly since Tuesday when it was worth a little over $64,000. Dogecoin, which took off a few years back when Elon Musk championed it apparently as a joke, was the week’s biggest mover, according to Coinbase, climbing by more than one-third.

Gold has played the role of a safe haven in risky times for hundreds of years, so an increase in its price should always be taken seriously, especially when there are clear indications of growing stress in key markets such as US Treasuries, as there are now. Scott Bessent, the US Treasury secretary, is concerned about the rise in yields on long-term government bonds, having intervened twice in the market, first by supporting the yen (to reduce pressure on the Japanese government to sell some of its huge US Treasury holdings) and then this week doubling the size of a Treasury program of buying back its own long-term bonds (paying for this by borrowing more short-term debt, which is rarely a sign of financial strength).