Gold, Bitcoin, and the Psychology of Shiny Things

Gold’s been gleaming for a few thousand years, but lately it’s been acting more like a meme asset than just a precious metal. For most of history, gold has been the emotional safe haven of the investing world, something you buy when everything else feels uncertain. It’s tangible, universally recognized, and historically tied to wealth and power. From Roman coins to Rolex bezels, gold has been the original status symbol. 

But gold’s story as an investment has always been complicated. It doesn’t produce cash flow, pay dividends, or fuel innovation; its value is simply determined by market conditions. Yet that’s exactly the point. When stocks wobble, inflation bites, or global headlines start to sound like a movie trailer, investors retreat to gold for psychological safety. The asset’s long-term correlation with the S&P 500 is near zero, meaning it usually ziggs when stocks zag. 

Over the last century, gold’s role has evolved. After the U.S. left the gold standard in 1971, gold became a floating asset with its own market dynamics. Prices surged in the 1970s during inflation fears, fell through the 1980s and 1990s, and then roared back in the 2000s as central banks printed money to fight recessions. Today, gold isn’t just a hedge; it’s an indicator of sentiment, and the government’s monetary policy / fiscal stability. 

What’s happening now (late 2025)

This year, gold isn’t creeping higher; it’s racing. The benchmark price of a troy ounce of gold has climbed to around US $4,100 as of late October, up roughly 50 percent year-over-year. It briefly topped US $4,300 per ounce, setting fresh all-time highs [1]. 

Analysts are revising their forecasts higher: HSBC raised its 2025 average gold price estimate to US $3,355 per ounce, citing continued safe-haven demand and a weaker dollar [2]. A later Reuters poll projected US $3,400 per ounce on average for 2025 and as high as US $4,275 for 2026 [3]. 

The main drivers are geopolitical uncertainty, ongoing central-bank purchases (especially in China, India, and Turkey), a softer U.S. dollar, and real (inflation-adjusted) interest rates that remain low, all of which favor non-yielding assets like gold. 

How gold miners bridge the gap

One of the main criticisms of gold ownership is that the metal itself doesn’t generate income. “The value of an asset is its ability to generate income,” John Chapman at every single one of our Investment Policy Committee meetings since 2006. It’s a store of value, not a producer of value. Enter the gold miners.”  

Gold-mining companies like Newmont, Barrick, and Agnico Eagle extract and sell gold, earning revenue tied to gold prices. Investing in these companies, either directly through stocks or indirectly through funds such as VanEck Gold Miners ETF (GDX) lets investors participate in the gold theme while still owning businesses that generate cash flow and often pay dividends. 

Because miners’ profits rise and fall faster than the gold price itself, they tend to amplify the metal’s moves: when gold rises 10 percent, miners might rally 20–30 percent. The trade-off is volatility and company-specific risks like labor disputes, political exposure, and environmental regulations. 

For long-term investors who want exposure to gold without giving up income potential, miners can help solve the “no yield” problem. In fact, several major gold producers currently yield between 2 and 3 percent, making them unusual among commodity plays that also act as a macro hedge. 

The bitcoin comparison

Everyone keeps asking: what about Bitcoin, the so-called digital gold? The comparison still holds philosophically. Both assets share an appeal as limited-supply, system-independent stores of value. But the behavior is completely different. 

The 30-day rolling correlation between Bitcoin and gold recently dropped to around –0.54, suggesting that when gold goes up, Bitcoin often moves in the opposite direction [4]. Earlier this year, while gold was up about 16 percent through March, Bitcoin was actually down more than 6 percent [5]. 

That said, JPMorgan recently projected that Bitcoin could outperform gold in the second half of 2025 as institutional adoption expands and a few U.S. states explore holding Bitcoin reserves [6]. 

Think of it this way: Bitcoin has volatility; gold has patience. If Bitcoin is adrenaline, gold is Ambien. Both, however, represent the same human instinct: distrust in systems and a craving for autonomy. 

The takeaway

Gold isn’t about getting rich; it’s about staying rich. In late 2025, that case is stronger than ever. A roughly 50 percent climb in price, record central-bank demand, and rising forecasts reinforce gold’s role as a stabilizer. 

Gold miners give investors a way to stay in the trade while also collecting yield, bridging the gap between safety and productivity. And for those leaning toward the digital alternative, Bitcoin remains a fascinating but far more volatile cousin in the same family of “anti-currency” assets. 

Whether you prefer your hedge in ounces or in Satoshi’s, the motivation is timeless: protecting wealth when everything else feels uncertain. And if you happen to wear that value on your wrist, that’s just a bonus. 

References 

1. Reuters. Gold rallies beyond $4,300/oz, set for best week in five years (Oct 17 2025).
   https://www.reuters.com/world/india/gold-rallies-beyond-4300oz-set-best-week-five-years-2025-10-17 
2. Reuters. HSBC raises average gold price forecasts for 2025–2026 (Oct 16 2025).
   https://www.reuters.com/world/asia-pacific/hsbc-raises-average-gold-price-forecasts-2025-2026-2025-10-16 
3. Reuters. Annual 2026 gold price forecast tops $4,000/oz for first time (Oct 27 2025).
   https://www.reuters.com/business/finance/annual-2026-gold-price-forecast-tops-4000oz-first-time-2025-10-27 
4. Bitget Research. Gold–Bitcoin correlation turns negative (Apr 2025).
   https://www.bitget.com/news/detail/12560604764737 
5. CME Group. Gold and Bitcoin decouple: what’s driving the divergence? (Mar 2025).
   https://www.cmegroup.com/openmarkets/metals/2025/Gold-and-Bitcoin-Decouple-Whats-Driving-the-Divergence.html 
6. Nasdaq. JPMorgan forecasts Bitcoin to outperform gold in second half of 2025 (May 2025).
   https://www.nasdaq.com/articles/jpmorgan-forecasts-bitcoin-outperform-gold-second-half-2025 

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