Gold is not a dream risk-off hedge, nor is Bitcoin [Video]
|The US government won’t be shut today, as Joe Biden signed a funding bill that should keep the US government agencies running until December 3rd. So, the short-term solution to the US debt ceiling issue should give a certain relief to US equity markets in the short-run, after the S&P 500 finally couldn’t hold on for longer and gave in the 100-dma resistance to close the session a touch above the 4300 mark.
But the picture is not optimistic. US futures are in the red as Asian equity markets kicked off the new month on quite a negative note. We saw Japan’s Nikkei index plunge more than 2.5% overnight, as Australian ASX200 slid close to 2% on rising inflation fears, which would keep the central banks’ hands tied faced with a slower economic recovery due to the skyrocketing energy and commodity prices.
In summary, the high inflation is about to become a worst headache than the pandemic itself, as at least for the pandemic, central banks had tools to use. With this high inflation, they have nothing to do.
And the traditional hedge for inflation and a market rout gold has not shouted present in September decline in equity markets, nor did Bitcoin.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.