Popular U.S. economist and proponent of gold, Peter Schiff, recently explained why the precious metal is plunging in the past few weeks. He believes that investors are to blame due to their lack of awareness of what is to come. Once they realize it, though, gold will surge once again.
The COVID-19 (coronavirus) started an adverse snowball effect on most financial markets. Riskier assets such as equities and cryptocurrencies have been plummeting for quite some time. Gold, however, known as a safe haven due to its stability in times of uncertainty, is also decreasing.
In just a week, the metal went from a 7-year high of $1,700 per ounce to the current price of $1,490 – a total loss of over 12%.
According to Peter Schiff, world-renowned economist, and Gold bull, the precious metal’s decline has nothing to do with its actual value. Schiff, who recently warned that the coronavirus recession would be worse than the 2008 financial crisis, put the blame entirely on investors:
“Gold is falling because investors are clueless as to what is coming. Their mindset is similar to that of central bankers. They have no idea how bad the consequences of the current monetary & fiscal policy mistakes will be. When they figure it out en masse, #gold will skyrocket.” – he Tweeted.
Schiff might be on point on why gold is dropping. During the most intense months of the last recession, the precious metal lost over 25% of its value. However, once investors’ trust in the markets returned, gold surged by 60% in a little over a year.
Aside from his constant belief in Gold, Schiff is also known for his never-stopping bashing on Bitcoin. He rarely misses a chance to talk down the leading digital asset.
As such, the cryptocurrency community is following his comments closely to provide a different vantage point. This time was no different. The popular cryptocurrency commentatorJoseph Young offered a compelling conclusion that can be derived from Schiff’s comments:
“When Bitcoin falls – BTC sucks. When Gold falls – investors suck.”
During previous periods of tension, like the U.S. – China Trade War, the largest cryptocurrency and the precious metal performed somewhat similarly. With the latest massive sell-offs in the markets, though, it seems that Bitcoin is correlating more with the stock market, and not as much with gold.
