Traditional perceptions of gold as a reliable safe haven are being challenged, according to economist Robin Brooks. He argues that the precious metal now behaves more like a high-beta asset, moving in tandem with risk-on investments such as Bitcoin and the S&P 500. Brooks notes that gold’s correlation with the S&P 500 has climbed above 0.50 in recent months, a stark departure from its historical near-zero correlation. This shift suggests that gold no longer provides the shelter investors expect during turbulent times.
Brooks attributes this change to a surge in retail demand during the late 2025 debasement trade. Heavy promotion of the trade attracted many short-term retail buyers, who are quicker to react to market stress compared to traditional bullion holders. He initially believed the heightened correlation would fade after corrections, but now thinks gold’s trading structure has fundamentally altered. According to Brooks, gold now falls alongside equities when investors reduce risk exposure, undermining its status as a hedge.
Meanwhile, Bitcoin critic Peter Schiff warns that recent Bitcoin price drops could trigger panic selling. Schiff points out that Bitcoin fell below $60,000, wiping out all gains from the post-election rally. He cautioned that if the daily low is breached, a “Crypto Black Monday” might ensue. Schiff has long championed gold over Bitcoin, arguing that gold remains a superior store of value.
On a different note, Standard Chartered remains bullish on Bitcoin. Geoffrey Kendrick, the bank’s head of digital assets research, described the latest downturn as a “painful week” but maintained a long-term optimistic outlook. He suggested that Strategy could resume heavy Bitcoin purchases, and that investors might view the current dip as a buying opportunity if Bitcoin reaches $100,000 by end of 2026.