Can gold & crypto sustain recent momentum amid looming US Fed rate hikes?

Precious metals like gold and silver, and new-age assets like Bitcoin, have had a strong run in the last month, but the rally has run into a roadblock amid expectations of a rate hike by the US Federal Reserve later this year. 

are up 7.6 per cent in a month and silver 6 per cent (as of the September 3 close), according to spot market data available on MCX. Meanwhile, crypto token

has rallied 26 per cent during the same period, reclaiming the $80,000 mark. The CME FedWatch tool signals that market participants are pricing in a 58 per cent chance of a hike, as against 45 per cent a month ago. 

Historically, these alternative assets have been vulnerable to a hawkish

. This is because higher interest rates typically push yields and the dollar index higher, increasing the opportunity cost of holding non-yielding assets. However, it might not hold this time amid an uncertain global environment, rising demand for other stores of value, and a likely risk of dollar debasement due to a rate hike. 

Manav Modi, commodities analyst at Motilal Oswal Financial Services, said that underlying demand remains supportive. Still, a hawkish Fed could remain an important resistance factor for both gold and silver in the near-term.