Bitcoin [BTC] and Gold Drop with Positive Tidings in Global Trade

By Nivesh Rustgi
August 25, 2020 Updated August 25, 2020
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Image Courtesy of Reuters/Dado Ruvic

Two recent announcements from the U.S. government on the improvement of trade with the European Union and its economic rival, China, are faring well for the stocks market. However, it seems to be causing a downturn in Gold and Bitcoin. Worries around inflation are also not bading well for the ‘safe haven’ assets. 

The U.S. stock markets opened with a positive gap on Tuesday, now trading at an ATH at $3433. Bitcoin and Gold, on the other hand, dropped 3.1% and 0.53%, respectively. The price of Bitcoin [BTC] at 15: 30 hours UTC on 25th August 2020 is $11,370.

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S&P 500, Gold and Bitcoin Daily Chart (TradingView)

Trade Agreements

The United States and the European union passed an agreement (in talks since 2018) to bolster trading between the two nations.  The agreement to reduce tariffs between the EU and the United States will be mutually beneficial to the economies of both countries.

These tariff reductions are the first U.S.-EU negotiated reductions in duties in more than two decades.

On the more significant, Chinese front, positive tidings for the economies came with the escalation of talks on the implementation of Phase One Agreement. China’s Vice Premier Liu He held talks with the U.S. counterpart Steven Mnhuchin and Ambassador Lighthizer on the matter on 24th August.

The final statement of the announcement of the call says,

  Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement.

Japan and the U.K. also reached an agreement yesterday on a ‘free trade agreement’, pending ratification next week.

Fingers Crossed for Thursday

On Thursday, Jerome Powell, the Federal Reserve Chairman of the United States will give a speech at the annual conference in Jackson Hole, Wyoming. His announcement will cater to targeting “Average inflation”; it implies, allowing inflation to run higher than normal for a period of time.

During times of high inflation, gold has performed well in the past. Hence, the contiuation of current trends point at a positive reaction from the market. Nevertheless, the market already seems to be pricing in all the information. Despite inflation worries, economic recovery seems to be taking precedence over ‘risk-off’ assets.

What is the best the long-term pay for the stock market, gold and Bitcoin? Please share your views with us. 

Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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