Key facts
- Gold has dropped 28% from its January 2025 peak of $5,600 per ounce.
- Silver has fallen more than 50% from its record high near $120 per ounce.
- Bitcoin is trading below $62,000, a 50% correction from its October all-time high.
- Markets are anticipating two 25 basis point rate hikes by March 2027.
- The 'debasement trade' narrative has reversed, impacting assets like gold, silver, and bitcoin.
- U.S. equities, especially in semiconductors, are outperforming these assets.
Gold and silver prices have fallen sharply from their January 2025 peaks, with gold down 28% to below $4,000 per ounce and silver over 50% to below $59 per ounce. This sell-off is attributed to growing concerns about tighter monetary policy under new Federal Reserve Chair Kevin Warsh. Markets are anticipating two 25 basis point rate hikes by March 2027, potentially bringing the federal funds rate to 4.00%-4.25%, driven by renewed inflation fears. This marks a reversal of the 'debasement trade' narrative, which posited that fiscal deficits and rising debt would erode fiat currency value. Bitcoin has also corrected, falling 50% from its October all-time high to below $62,000, below its 200-week moving average of $62,800. Despite the downturn, bitcoin has outperformed gold and silver since February, but all three assets have lagged U.S. equities, particularly in the semiconductor and memory sectors.