(Kitco News) – Stocks trended higher in early training on Thursday while gold rallied to a new record high and Bitcoin (BTC) consolidated near $67,000 as the latest retail sales jumped 0.4%, more than the 0.3% rise expected, adding further support to arguments that the economy could be reaccelerating following a surprisingly strong September jobs report.
Further positive signs on the economic front came from the jobless claims, which came in at 241,000, far below expectations and a drop from the prior week's upwardly revised 260,000. While the news is good for the economy, it's bad for interest rate cuts, as the CME FedWatch Tool now shows the odds of the Fed holding rates steady in November have risen to 11.7%, up from 6.3% yesterday.
“Stocks climbed on Thursday, buoyed by strong economic indicators that have tempered recession fears, with semiconductor stocks leading the charge,” said analysts at Secure Digital Markets. “Meanwhile, the European Central Bank lowered its key interest rate to 3.25% on Thursday, marking its third quarter-point cut this year.”
The morning rally in the semiconductor sector followed a selloff earlier in the week after ASML lowered its sales outlook for 2025. An upbeat outlook from TSMC (TSM) helped ease worries about artificial intelligence chip demand, lifting shares of Nvidia (NVDA) to an intraday all-time high.
The rising price of gold and stocks came even as the DXY continued to climb higher, perplexing some, as asset prices usually fall when the value of the dollar increases.
This reality started to catch up with the markets as the day progressed, however, leading to a retreat from intraday highs for the major indices. At the closing bell, the Dow finished up 0.37% while the S&P and Nasdaq were flat.
Gold, meanwhile, continued its record-setting ways, with spot gold hitting a new all-time above $2,697/oz earlier in the day. At the time of writing, it trades at $2,692.50/oz for a gain of 0.68% on the session.
Data provided by TradingView now shows that gold has outperformed the S&P 500 since 2005, with an increase of 455% versus a gain of 422% for the index.
S&P vs. gold chart. Source: TradingView
In a change of pace from the first three days of the week, Bitcoin was the odd asset out on Thursday as bulls took a breather following a 7-day rally that saw BTC price increase nearly 16%.
“Bitcoin retreated to $66,600 from its peak at $68,400 as the market undergoes a correction from the upper boundary of the prevailing trend channel,” Secure Digital Markets analysts said. “Currently, BTC is sidestepping a breakout from this sustained consolidation pattern established since March, opting instead for a pause as the market anticipates the next significant move.”
BTC/USD Chart by TradingView
“With 94% of BTC's circulating supply now in profit, historical trends suggest that profit-taking could intensify soon,” they warned. “Indeed, Glassnode reports over $11 billion in profits realized in just the past week.”
“In the ETF arena, BTC continues to draw significant capital with $458.5 million in recent inflows, predominantly from Blackrock, which contributed $393.4 million,” they added. “This marks over $1.6 billion in BTC inflows across four sessions. ETH ETFs also showed positive movement, capturing $24.2 million in inflows, also primarily led by Blackrock.”
At the time of writing, Bitcoin trades at $67,027, a decrease of 1.23% on the 24-hour chart.
Gold shines bright as Bitcoin consolidates
According to Matthew Jones, precious metals analyst at Solomon Global, interest rate cuts are the source of momentum behind gold’s new all-time high.
“The ECB’s rate cut and the anticipated Fed and BoE rate cuts are driving the gold price (as well as weakening sterling and the euro),” Jones said in a note to Kitco Crypto. “Meanwhile, uncertainty over the upcoming US election and current geo-political events add a safe-haven demand. Investors are hedging against both economic volatility and a possible inflation spike. $2700 is now in touching distance.
Maruf Yusupov, co-founder of Deenar, also sees further gains in store for the yellow metal.
“Gold has been a standout performer over the past quarter after hitting multiple all-time highs atop a 13.8% surge,” he said in a note shared with Kitco Crypto. “Considering gold’s market cap, this growth rate is impressive, especially as it stayed relatively stable compared to Bitcoin, which recorded just 24% over the past quarter.”
“Undoubtedly, investor sentiment toward gold saw a more positive twist this year as central bank monetary policies and regional conflict forced the embrace of safe assets,” he added.
“Over the past few years, many have compared gold and Bitcoin as possible safe haven assets. Despite different valuations and performance per market data, both assets still have dedicated proponents,” Yusupov said. “However, sentiment has shifted recently as many gained access to gold, proof that many are running from more volatile assets like Bitcoin. With the 50 basis points rate cut from the US Federal Reserve and further cuts by 25 basis points projected for November, more economic uncertainty lies ahead.”
“The core triggers of these macroeconomic uncertainties are not uniform,” he noted. “While others slashed rates, the Bank of Japan hiked interest rates, which has weighed positively on the yen. Despite these discrepancies, investors across the globe have trust in gold to better preserve their capital.”
“The primary goal in these times of uncertainty is not to increase profit but to guarantee asset safety,” Yusupov stressed. “However, gold has been able to offer a mix of both, making it a relatively superior asset compared to other traditional alternatives.”
Looking specifically at the recent rally for Bitcoin, Todd Ruoff, CEO of Autonomys, told Kitco Crypto that it has been driven by several factors.
“First and foremost, the election is responsible for the current surge,” he said. “One candidate has pledged full support, and the other has shown signs of softening on crypto policy. There is the hope and expectation that bipartisan support will lead to some semblance of a regulatory framework to support the industry.”
“Second, the interest rate environment has begun to soften, finally decreasing the cost of capital,” he added. “Some of the capital in the saturated treasury market is moving into higher-risk assets. The US stock market continues to hit new highs, and the economy is strong. The price action in equities has decoupled from the crypto market, which had been stagnant but is showing signs of strength as investors move to risk-on positions.”
A third factor is China, which “has more recently made a significant impact on global markets,” he said. “The much anticipated ‘Beijing Bazooka’ has fired a small round, announcing a series of stimulus measures to boost growth. While the market has initially found this underwhelming, people remain hopeful this is the beginning of a softening cycle.”
Scott Guenther, Head of Finance at 0x, also highlighted increased demand for Bitcoin ETFs, as well as positive comments from big names in the finance industry.
“Not only is Bitcoin having a strong week, but ETFs are as well. Earlier this week, net inflow on Monday was the highest since June, seeing a net of $556 million,” he said in a note to Kitco Crypto. “Larry Fink, CEO of Blackrock, made favorable remarks about Bitcoin, saying, ‘Bitcoin will become as big as the US housing market, which currently sits at $50T.’ He also noted, ‘We believe Bitcoin is an asset class in itself.’”
“These comments from a highly notable TradFi leader and institution could have stirred some people to want exposure to ETFs,” Guenther suggested. “As the election nears and crypto continues becoming a highlighted topic, ETFs will likely sustain their rally.”
“Trump's odds of winning the US election have skyrocketed in the past week,” he added. “Polymarket prices Trump winning at 58%, his highest lead via the platform since July. It's no secret that, at face value, a Trump administration would likely be much more favorable to the digital asset industry than his opponent.”
Expanding on the effect the election is having on the markets was Matthew Le Merle, CEO of Blockchain Coinvestors.
“As we head into the home stretch, a larger premium is being placed on crypto natives and other single-issue voters that believe in the power of blockchain,” he said in a note to Kitco Crypto. “The release of Trump’s new crypto coin and verbiage by both candidates re: their crypto stance has made this a key issue and important voter cohort/bloc. An estimated 90 million of the US's 160 million voters own at least some digital assets therefore, regardless of the result of the election, blockchain technology is here to stay.”
Profit-taking takes a toll on altcoins
Bitcoin’s correction and consolidation led to a pullback in altcoins, with most tokens in the top 200 recording losses on Thursday.
Daily cryptocurrency market performance. Source: Coin360
Popcat (POPCAT) bounced back from yesterday’s losses to lead the gainers, increasing 10.4%, followed by gains of 6.5% and 4.8% for UMA (UMA) and Echelon Prime (PRIME), respectively. Scroll (SCR) led the losers with a decline of 6.7%, followed by losses of 6.6% for Bonk (BONK) and Conflux (CFX).
The overall cryptocurrency market cap now stands at $2.29 trillion, and Bitcoin’s dominance rate is 57.7%.
