Decoupling in Motion: Bitcoin Climbs, Gold Slips Amid Trade Truce

Gold prices dropped to a one-month low on Wednesday, signaling a shift in investor sentiment toward risk-on assets like Bitcoin, as trade tensions between the U.S. and China ease.According to Trading Economics, gold has declined 9% to $3,185 per ounce from its mid-April peak of $3,500. In contrast, Bitcoin has surged 17% over the same period, rising from $88,200 to $103,600, per CoinGecko data.The divergence between the two assets has widened following productive negotiations between Washington and Beijing, which have reduced investor anxiety. Earlier in the year, escalating trade frictions had rattled global markets.This week, the U.S. announced it would reduce tariffs on Chinese imports from 145% to 30%, while China said it would cut levies on American goods from 125% to 10%. These temporary reductions—set to last 90 days—took effect Wednesday, according to a joint statement.Peter Schiff, economist and long-time Bitcoin skeptic, noted that gold has experienced several sell-offs during its recent rally, mostly during early U.S. trading hours. On X, he suggested this reflects a shift in gold ownership from U.S. to foreign investors.While Bitcoin has shown resilience amid Trump-era trade tensions, gold remains the top performer this year. Since January, gold is up 23%, while Bitcoin has gained around 10%.Analysts suggest Bitcoin’s image as a “safe haven” has been boosted by concerns over U.S. dollar debasement and a weaker greenback. Gold has similarly benefited from these macroeconomic fears, though the current spotlight is on trade de-escalation.In April, Chinese gold ETFs recorded their highest monthly inflows ever, attracting $6.4 billion, according to Ray Jia, head of China research at the World Gold Council. In a Wednesday report, Jia attributed the spike to strong local gold prices and trade war worries.However, he also noted that inflows began to slow in early May, with demand likely to ease further if trade tensions continue to cool. Still, long-term demand for gold may remain strong due to ongoing economic and geopolitical uncertainties.Meanwhile, Bitcoin ETFs—despite sharp outflows earlier this year—have seen a turnaround. On Tuesday, total net inflows crossed $41 billion since their Wall Street debut, setting a new record.