Gold surged to a six-week high as Chinese gold ETFs saw sustained inflows, while Bitcoin remained rangebound near $64,000 despite record U.S. equity markets and shifting investor sentiment.
Gold prices climbed sharply on August 5, reaching their highest level in six weeks as persistent demand from Chinese investors drove a notable streak of inflows into domestic gold-backed exchange-traded funds. Meanwhile, Bitcoin continued to trade in a narrow band near $64,000, showing little reaction to broader gains in both precious metals and U.S. equities.
Chinese Gold ETF Inflows Reverse June Outflows
According to data from Bloomberg, Chinese gold ETFs recorded 14 consecutive days of net inflows leading up to August 5, marking the longest such streak in months. This surge follows a historically poor June, when the World Gold Council reported record outflows from these products. Despite the earlier weakness, first-half 2024 inflows still totaled 40 billion yuan (about $5.6 billion), making it the second-strongest first half on record for Chinese gold ETFs. The World Gold Council attributed the renewed demand to ongoing geopolitical and economic uncertainty, increased institutional participation, and continued gold purchases by the People's Bank of China, which added 82 tonnes over the 20 months through June.
Bitcoin Stalls Despite Equity Highs
While gold rallied, Bitcoin failed to capture similar momentum. The cryptocurrency hovered near $64,000 for a second consecutive day, unable to break out of its established range even as the S&P 500 reached a new all-time high of 7,793. Analyst commentary highlighted weakening support for Bitcoin at current levels, with technical patterns suggesting a risk of further declines into the $58,000 to $66,000 range if buying interest does not recover. On-chain analytics firm CryptoQuant identified four conditions it believes are necessary for a sustained Bitcoin rebound: consistent inflows into U.S. spot Bitcoin ETFs, lower U.S. bond yields, no additional Federal Reserve rate hikes, and a return of the Coinbase Premium-a measure of U.S. exchange demand-to positive territory. As of August 5, the Coinbase Premium had remained negative for nearly 80 days, indicating persistent selling pressure or weaker U.S. demand relative to offshore markets.
Market Context and ETF Flows
The divergence between gold and Bitcoin comes as U.S. stocks continue to set new records, with Bloomberg ETF analyst Eric Balchunas noting that 66% of S&P 500 components were trading above their 50-day moving average on August 5. Despite this risk-on environment, Bitcoin's lack of movement stands in contrast to recent activity by major holders. For example, Trump Media recently transferred 2,628 Bitcoin to Crypto.com, a move flagged by on-chain trackers as a probable sale, though the company denied liquidating its holdings. Such large transactions can influence market sentiment and liquidity, especially when ETF inflows remain subdued.
On August 5, gold closed at $4,213 per ounce, up 2.8% from the previous session and marking its highest price since June 22, according to Bloomberg data. Chinese gold ETFs saw 14 straight days of inflows, while the S&P 500 reached a record 7,793. Bitcoin's price remained near $64,000, with the Coinbase Premium negative for nearly 80 consecutive days, based on CryptoQuant research.
Gold and Bitcoin are often compared as alternative stores of value, but their market drivers can diverge sharply. Gold's price is heavily influenced by central bank activity, ETF flows, and macroeconomic uncertainty, while Bitcoin's performance is increasingly tied to ETF demand, regulatory developments, and on-chain liquidity. The Coinbase Premium, which tracks the price difference between Bitcoin on U.S. exchange Coinbase and offshore platforms like Binance, is watched as a proxy for U.S. investor appetite. Extended periods of negative premium may signal weaker domestic demand or increased selling pressure, potentially affecting Bitcoin's ability to sustain rallies even when traditional risk assets are rising.
