On March 23, GTC ZHH Capital noted that gold has shown clear signs of weakness amid accumulating macroeconomic pressures, while Bitcoin maintains a consolidation pattern driven by liquidity dynamics. Rising real interest rates and heightened inflation risks are diminishing gold's appeal, whereas Bitcoin remains in a typical cyclical consolidation phase. Overall, the market is shifting from traditional safe-haven logic towards an asset pricing model more sensitive to liquidity and interest rate environments.
Current market performance indicates that gold is gradually approaching a technical bear market zone. Data shows its price has retreated nearly 20% from the historical peak reached in January. Although geopolitical tensions were once considered a key supportive factor for gold, actual price movements have diverged; since the escalation of conflicts in late February, gold prices have instead fallen by approximately 10%. GTC ZHH Capital stated that this shift reflects macroeconomic variables taking precedence over traditional safe-haven sentiment in driving the market.
The repricing of interest rate expectations has emerged as a critical factor. Markets have broadly pushed back expectations for rate cuts and anticipate tight monetary policies persisting until the end of 2026. Meanwhile, rising oil prices fueled by geopolitical risks are exacerbating inflationary pressures, further reinforcing the "higher-for-longer" interest rate environment. GTC ZHH Capital believes this macroeconomic mix significantly pressures non-yielding assets like gold, contributing to its recent weakness.
From a liquidity perspective, when adjusted for M2 money supply—which includes cash, deposits, and other highly liquid assets—the price of gold is nearing historical highs, similar to cycles observed in 1974 and 2011. GTC ZHH Capital indicated that this suggests gold is currently in a high-volatility consolidation phase, potentially forming a cyclical bottom relative to global liquidity.
In contrast, Bitcoin remains in a consolidation phase under the M2-adjusted framework, reminiscent of early 2024, and is retesting the highs of 2021. Historical data shows that in each cycle, Bitcoin has broken through previous peaks after liquidity adjustments. Currently, Bitcoin's price remains about 40% below its peak from last October. GTC ZHH Capital views this range as more indicative of normal consolidation before an upward move rather than a trend reversal.
Notably, recent price movements of gold and Bitcoin have shown signs of synchronization. After breaking below key price levels, both assets have exhibited strong positive correlation, following a period of significant divergence. GTC ZHH Capital suggested that this return to correlation may indicate the market is repricing different asset classes within a unified macroeconomic framework.
In summary, GTC ZHH Capital believes the core drivers of the current market remain the path of interest rates and the liquidity environment. Gold faces pressure from high rates and inflation, while Bitcoin maintains a structural consolidation within the liquidity framework. Future trends will hinge on whether expectations for macroeconomic policy shift and how market risk appetite further evolves.