Gold vs. Bitcoin: XAU/USD Rebounds as BTC Tests $75,000

Gold was also supported by concerns about the government debt and fiscal stability. But high Treasury yields and strong U.S. dollar limited the recovery. The Fed decision could introduce some volatility in the short term.

Investment demand continues to be the key growth driver for gold. In August, the world’s gold ETFs pulled in $18 billion, according to the World Gold Council. Their holdings grew by 121 tonnes to a record 4,189 tonnes.

People’s Bank of China also bought 20.2 metric tonnes. It was the highest monthly buying volume it had ever recorded since October 2023. But the wholesale demand for gold in China declined due to high prices that brought down purchases of jewelry and bullion. Hence, institutional and central bank demand remains good and physical demand is mixed.

Bitcoin faces the different set of pressures. The price dropped over 3% to $75,500 after the U.S. Senate failed to advance the Clarity Act. The vote was 50-49 in favor but the bill needed 60 votes to move forward. This setback delayed the regulatory clarity expected by crypto industry.

U.S. spot Bitcoin ETFs recorded $450.4 million in net outflows on September 15, which reverses the inflows of the previous day. But the cumulative inflows remain close to $54.9 billion. This shows that institutional interest is still significant but the demand in the short term has weakened.