Bitcoin buyers should hedge with gold: Biswas

“If you look at the volatility of bitcoin and other cryptocurrencies, it is probably not a bad thing if you own cryptocurrencies to hold gold as well to reduce some of the volatility because gold is much less volatile and has a fundamental inherent physical value that can’t be substituted by the internet”.

Evolution Mining executive chairman Jake Klein said prices for gold and Bitcoin were often being driven by the same thing; quantitative easing in many advanced economies.

“Gold has been mined for thousands of years and bitcoin, to date, for only 12. Notwithstanding this, the current euphoria and hype around bitcoin is being driven by factors good for gold in the long term,” he said.

″⁣It again has thrown a spotlight on the underlying systemic challenge to fiat currencies which are being devalued through unprecedented money printing by governments. Gold has, and will, continue to benefit from this debasement in paper currencies.”

St Barbara chief executive Craig Jetson said he did not expect Bitcoin to erode investors appetite for gold.

“Over the various cycles we’ve seen play out for gold, against the backdrop of the global economy, it consistently presents itself as a safe haven,” he said.

“While the appeal of bitcoin appears to be attractive to investors, I remain confident in the future of gold – not only as a safe haven – but a highly attractive investment with a long-term horizon and return.”

Gold prices rose above $US2000 per ounce for the first time in 2020 as multiple governments announced stimulus packages to rescue their economies from coronavirus lockdowns.

Prices for the yellow metal have eased over the past two months, with gold fetching $US1841 per ounce on Thursday; a price that remains extremely high by historic standards.

The price was as low as $US1050 per ounce in early 2016.

High gold prices helped Newcrest to report its highest ever interim profit, in Australian dollar terms, on Thursday, double dividends and announce a more generous dividend policy.

St Barbara and Evolution will both report financial results on February 17.

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