Gold and bitcoin rise on fears about US debt

Gold prices have risen to their highest levels in some three months or so, rising as high as $4,740 per ounce this week. Meanwhile, bitcoin saw its strongest weekly increase since March 2023, growing over 20% and crossing $80,000, before paring back those gains a bit on Tuesday.

“Last week, the U.S. federal debt surpassed $40 trillion — people are looking for diversifiers other than government bonds,” Campbell Harvey, a professor at Duke University’s Fuqua School of Business, told the Washington Examiner. “Gold is at the top of the list.”

He added that “20% of Federal tax revenue is directed to pay the interest on the U.S. massive debt. No wonder investors are looking to gold and bitcoin as potential diversifiers.”

In the past month, gold prices have risen by over 14%. Compare that to the benchmark S&P 500, which has risen just over 3.5% in that same period.

Joseph Cavatoni, a senior market strategist for the Americas for the World Gold Council, told the Washington Examiner that over the past several months, there has been a higher level of “up-and-down” volatility in the gold market as investors try to anticipate geopolitical events, understand the implications of tariffs, gauge the fallout from the war with Iran, and more.