Viewpoint: Gold is rising but still has room to rise.

Author: Fishmarketacad, encryption KOL

Compiled by: Felix, PANews

On October 17, market data showed that spot gold prices strongly broke through the 4300 USD/ounce barrier, rising to a record high of 4378 USD per ounce. Meanwhile, tokenized gold PAXG surged over 8% this morning. Discussions about gold are heating up on encryption Twitter, and crypto KOL @FishMarketAcad posted on the X platform analyzing the current rise in gold and the drop in Bitcoin, believing that gold still has room to rise and is expected to break through 5000 USD in the future. The following are the details.

PANews Note: This article is not any financial advice and only represents the author's personal views.

Why is only gold rising?

Since the unlimited quantitative easing and depreciation of fiat currency in 2020, individuals have been paying attention to precious metals as a way to preserve value that is unrelated to the market.

Gold has broken through $4300, rising 25% in less than two months. Let's explore the reasons for the increase.

1. De-dollarization**/**Central banks of various countries are competing to buy

Central banks around the world, especially the Chinese government, have been buying gold frantically. I believe that this year it is likely to exceed 1000 tons of gold for the fourth consecutive year, and surveys show that the Chinese government plans to continue purchasing.

Why? The U.S. national debt is expected to reach $37.5 trillion this year, with interest alone exceeding $1 trillion (despite tax revenues of about $4 to $5 trillion). There are only two ways to handle such massive debt: default or devaluation, and the U.S. never has to default because it can print more money, thereby devaluing the debt.

2. Stablecoins as a Tool for Socializing Debt

The United States devalues its debt through monetary inflation, essentially by printing more money, which lowers the value of the dollar and thus shrinks the actual value of its debt. You should already know this, as this situation has been ongoing for decades.

The new situation is that if the U.S. transfers its debt into cryptocurrencies like stablecoins, it could be interesting because stablecoins are more accessible to the world.

Stablecoins are increasingly backed by loans. Dollar-pegged stablecoins like USDT and USDC are now primarily supported by U.S. Treasury bonds. What was originally a purely 1:1 tool has gradually transformed into being over 90% backed by U.S. Treasury bonds.

So now, whenever people in other countries hold stablecoins, they are indirectly purchasing U.S. debt. This has globalized America's “inflation tax.” The higher the global adoption rate of U.S. stablecoins (which will reach trillions of dollars), the more the U.S. can export debt to the world and share its “losses” with the world (rather than just the U.S.).

If this is indeed part of the plan, then it goes back to the previously mentioned reasons for the demand for de-dollarization and why gold is a relatively safe store of value alternative.

3. Physical Pressing

Another point is that this rise in gold is not merely driven by paper/derivatives. If you understand that when the open interest of options contracts exceeds the liquidity of a certain token, a short squeeze phenomenon may occur in the perpetual contract market, the situation here is similar.

In 2025, the open interest for gold futures on the New York Mercantile Exchange (COMEX) typically amounts to hundreds of thousands of contracts (each representing 100 troy ounces), while the total amount of physical gold registered for delivery is just a small portion of that.

This means that at any given time, the subscription volume of physical gold far exceeds the quantity available for delivery. This is why the delivery time for gold has extended from a few days to several weeks, with actual physical demand (similar to spot demand) present, and this demand is unlikely to be weak, thereby forming a structural bottom.

4. Overall Uncertainty

Gold has once again proven its status as a safe-haven asset during times of uncertainty. The current Sino-US competition, concerns over trade wars, domestic turmoil in the United States, Federal Reserve interest rate cuts, the US economy being supported by AI infrastructure spending, and economic uncertainty have all led global investors to flee the dollar and turn to gold.

In my opinion, gold mainly falls when there is no need for a safe haven, and the following conditions need to be met, but it is unlikely to occur in the short term:

• High employment rate: but the current economic outlook in the United States is not good.
• Risk asset rotation: Current stocks are not cheap.
• Political Certainty: The United States needs to get along with China.
• Rising interest rates mean rising capital costs: the current situation is exactly the opposite.

Due to the unpredictable behavior and actions of Trump, these factors may also change rapidly (or at least the external perception of him), so caution is advised.

What does this mean for Bitcoin?

Bitcoin has fallen more than 25% relative to gold so far this year. Despite the many similarities between Bitcoin and gold, individuals still believe that Bitcoin does not yet meet the criteria to become “digital gold”; however, over time, Bitcoin is getting closer to gold (although it remains unclear how to address the quantum issue).

However, if you have tried to buy gold, you will know that the spread between the buying and selling price for physical gold is very high, so gold is an asset that is held after purchase, which is not interesting. Therefore, retail investors may choose to buy Bitcoin instead of gold, but the purchasing power of retail investors is relatively low compared to central banks.

The current high degree of political association between Bitcoin and the United States may deter other central banks from de-dollarization by purchasing Bitcoin. I believe that currently, American miners account for about 38% of Bitcoin's hash power, and American entities (exchange-traded funds, publicly listed companies, trusts, and the government) control approximately 15% of the total Bitcoin supply, and this proportion may continue to grow.

So… individuals are not clear about how Bitcoin will perform relative to gold, but in the short term (until this year), it will continue to put pressure on gold.

What is the individual doing?

Going long on Bitcoin: I personally believe that de-dollarization is more beneficial for Bitcoin than for other altcoins. Moreover, after the recent crash on “1011”, it is clear that Bitcoin is the only asset with real order book liquidity and buying pressure, and currently, Bitcoin's dominance seems to be on the rise. If I see altcoins performing well, I may close this position, but usually after Bitcoin sets a new all-time high, which should enhance Bitcoin's dominance.

Going long on gold: Essentially, this means buying paper gold, selling put options, or buying call options. However, the phrase “not your keys, not your coins” also applies here; you might just be holding a useless piece of paper, but personally, I still somewhat agree with it.

Conclusion

In light of the aforementioned structural changes, gold remains a decent buying option, but a 20% - 30% pullback would not be surprising. If such a situation occurs in the short term, it could be a good opportunity for long-term buying, provided that the above uncertainties have not been resolved.

In addition, gold is about to reach resistance against the S&P 500, and its market capitalization is about to hit $30 trillion. These two factors could signal a local top, so it is advisable to wait and see rather than blindly follow the trend.

Finally, here is another way to view gold; I personally believe that gold still has room for growth:

• If the US economy or the global situation is unstable, gold prices will rise;
• If the US economy or the global situation becomes more unstable, gold prices will rise;
• If the U.S. economy or global situation becomes more stable, gold prices will fall.

Related reading: Gold “big bull” report, why is gold expected to reach $8,900 by the end of 2030?