Gold’s eight-week rally came to an end as investors rotated out of safe havens and back into risk assets ahead of the Federal Reserve’s policy meeting, giving Bitcoin (BTC) room to regain momentum and climb past $113,500.Key TakeawaysGold’s record run ended, dropping over 6% from all-time highs amid profit-taking and ETF outflows.US–China trade progress reduced demand for safe havens, easing macro tension.Bitcoin gained 5%, breaking free from a month-long range as the BTC/gold ratio hit its most oversold level in nearly three years.Traders now await the Federal Reserve’s October rate decision, with markets pricing in a 25 basis point cut.Gold Retreats After Record-Breaking RallySpot gold prices fell more than 6% from their all-time high of $4,380 per ounce reached Monday, closing the week near $4,120 as investors locked in profits ahead of the Fed’s October policy meeting.The pullback marked the end of an eight-week winning streak, driven by a combination of profit-taking, ETF outflows, and a softening geopolitical backdrop.Officials from both the U.S. and China announced they had reached a “preliminary consensus” on several contentious trade issues — including export controls and shipping levies — following two days of talks in Malaysia.“The threat of 100% tariffs on Chinese goods is effectively off the table,” said U.S. Treasury Secretary Scott Bessent, easing investor concerns ahead of a potential Trump–Xi summit to finalize a broader agreement.Fed Outlook and Global Risk SentimentThe calmer trade tone, combined with expectations of another 25-basis-point Fed rate cut, shifted market sentiment sharply. Traders are now positioning for looser financial conditions as the Federal Reserve continues its gradual easing cycle to support growth.The CME FedWatch Tool shows rate-cut odds above 98%, while global equity markets and cryptocurrencies have rebounded in tandem. Silver and platinum also declined sharply, suggesting a broader rotation out of precious metals and into higher-risk assets.Bitcoin Rebounds as BTC/Gold Ratio Flashes Oversold SignalAfter underperforming gold for much of the quarter, Bitcoin rose over 5% last week, reclaiming the $113,500 level and breaking free from a tight month-long range.The move coincides with a notable signal from the BTC/gold ratio — a measure of Bitcoin’s value relative to gold — which recently hit its most oversold level since November 2022, according to CoinDesk analyst Omkar Godbole.The ratio’s 14-day Relative Strength Index (RSI) plunged to 22.2, below February’s lows. Historically, such extreme readings have preceded local Bitcoin bottoms, often followed by periods of BTC outperformance as traders shift back into high-beta assets once macro fear subsides.“Whenever the BTC/gold ratio reaches these levels, it tends to mark exhaustion in gold’s momentum and the start of a crypto catch-up phase,” one analyst noted.Bitcoin’s Macro Correlation StrengthensThe interplay between gold and Bitcoin continues to shape institutional allocation strategies. While gold remains a core hedge, Bitcoin’s recovery from oversold conditions highlights its growing role as a liquidity-sensitive asset — one that tends to outperform when policy eases and risk appetite returns.If the Fed confirms another cut next week, analysts expect further inflows into crypto, potentially pushing BTC toward the $118K–$123K range in the coming sessions.For now, the narrative is clear:Gold’s pause has become Bitcoin’s pulse — a signal that risk appetite is back, and the macro tides are shifting once again.
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