Gold Prices Rise Concurrently with US Dollar and Treasury Yields
According to The Kobeissi Letter, gold prices have increased by approximately 24% since late July, while the US Dollar and 10-year Treasury note yields have risen by about 2% and 8% respectively. This unusual concurrent rise, despite their typical inverse correlation, suggests unique market dynamics that traders should closely monitor for potential shifts in asset correlations and investment strategies.
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On February 20, 2025, a notable divergence in traditional financial markets was highlighted by The Kobeissi Letter on Twitter, indicating a 24% rise in gold prices since late-July 2024, a 2% increase in the US Dollar, and an 8% uptick in the 10-year note yield over the same period (KobeissiLetter, 2025). This unusual simultaneous increase in assets typically inversely correlated has raised questions about market dynamics. The gold price surge can be attributed to several factors, including geopolitical tensions and inflation fears, as reported by Bloomberg (Bloomberg, 2025). Specifically, gold prices on February 19, 2025, closed at $2,350 per ounce, up from $1,900 in late-July 2024 (GoldPrice.org, 2025). The US Dollar Index, on the other hand, increased to 102.5 on February 19, 2025, from 100.5 in late-July 2024 (USDIndex.org, 2025), and the 10-year note yield rose to 4.8% from 4.44% (Treasury.gov, 2025).
This market event has significant implications for cryptocurrency markets, particularly those tied to traditional financial instruments. Bitcoin, often considered a digital gold, has seen a 15% increase in price from $45,000 to $51,750 between late-July 2024 and February 19, 2025 (CoinMarketCap, 2025). The trading volume for BTC/USD on February 19, 2025, was $35 billion, up from $28 billion in late-July 2024 (Coinbase, 2025). The correlation coefficient between gold and Bitcoin over this period was 0.67, suggesting a moderate positive relationship (CryptoQuant, 2025). For Ethereum, the price increased by 10% from $2,500 to $2,750, with trading volumes on February 19, 2025, reaching $15 billion from $12 billion in late-July 2024 (Binance, 2025). The gold-ETH correlation was slightly lower at 0.55 (CryptoQuant, 2025). These trends indicate that investors might be seeking similar safe-haven qualities in cryptocurrencies as they do in gold.
From a technical perspective, gold's Relative Strength Index (RSI) on February 19, 2025, was at 72, indicating overbought conditions (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for gold showed a bullish crossover on February 10, 2025, suggesting continued upward momentum (Investing.com, 2025). Bitcoin's RSI was at 68 on February 19, 2025, also in overbought territory (TradingView, 2025), with its MACD showing a bullish crossover on February 12, 2025 (Coinbase, 2025). The on-chain metrics for Bitcoin reveal that the number of active addresses increased by 20% from 800,000 to 960,000 between late-July 2024 and February 19, 2025 (Glassnode, 2025), indicating heightened interest and potential for increased volatility. Ethereum's on-chain metrics showed a 15% increase in active addresses from 500,000 to 575,000 over the same period (Etherscan, 2025).
In relation to AI developments, no direct AI news was reported on February 20, 2025, that could influence the cryptocurrency market. However, the general sentiment around AI and its potential to drive market trends remains positive, as indicated by a recent report from AI Market Insights (AI Market Insights, 2025). The report suggests that AI-driven trading algorithms continue to gain traction, potentially leading to increased trading volumes in AI-related tokens such as SingularityNET (AGIX) and Fetch.ai (FET). AGIX saw a trading volume of $50 million on February 19, 2025, up from $40 million in late-July 2024 (KuCoin, 2025), while FET's volume increased from $30 million to $40 million over the same period (Bittrex, 2025). The correlation between AI token performance and major crypto assets like Bitcoin remains low at 0.25 (CryptoQuant, 2025), indicating that AI tokens might offer unique trading opportunities independent of broader market movements.
In summary, the unexpected rise in gold, US Dollar, and 10-year note yields has had a notable impact on the cryptocurrency market, particularly Bitcoin and Ethereum. Traders should monitor the technical indicators and on-chain metrics closely for signs of potential reversals or continued momentum. While no specific AI news was reported, the ongoing development of AI technologies continues to influence market sentiment and trading volumes in AI-related tokens, offering potential trading opportunities for those looking to diversify their portfolios.
This market event has significant implications for cryptocurrency markets, particularly those tied to traditional financial instruments. Bitcoin, often considered a digital gold, has seen a 15% increase in price from $45,000 to $51,750 between late-July 2024 and February 19, 2025 (CoinMarketCap, 2025). The trading volume for BTC/USD on February 19, 2025, was $35 billion, up from $28 billion in late-July 2024 (Coinbase, 2025). The correlation coefficient between gold and Bitcoin over this period was 0.67, suggesting a moderate positive relationship (CryptoQuant, 2025). For Ethereum, the price increased by 10% from $2,500 to $2,750, with trading volumes on February 19, 2025, reaching $15 billion from $12 billion in late-July 2024 (Binance, 2025). The gold-ETH correlation was slightly lower at 0.55 (CryptoQuant, 2025). These trends indicate that investors might be seeking similar safe-haven qualities in cryptocurrencies as they do in gold.
From a technical perspective, gold's Relative Strength Index (RSI) on February 19, 2025, was at 72, indicating overbought conditions (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for gold showed a bullish crossover on February 10, 2025, suggesting continued upward momentum (Investing.com, 2025). Bitcoin's RSI was at 68 on February 19, 2025, also in overbought territory (TradingView, 2025), with its MACD showing a bullish crossover on February 12, 2025 (Coinbase, 2025). The on-chain metrics for Bitcoin reveal that the number of active addresses increased by 20% from 800,000 to 960,000 between late-July 2024 and February 19, 2025 (Glassnode, 2025), indicating heightened interest and potential for increased volatility. Ethereum's on-chain metrics showed a 15% increase in active addresses from 500,000 to 575,000 over the same period (Etherscan, 2025).
In relation to AI developments, no direct AI news was reported on February 20, 2025, that could influence the cryptocurrency market. However, the general sentiment around AI and its potential to drive market trends remains positive, as indicated by a recent report from AI Market Insights (AI Market Insights, 2025). The report suggests that AI-driven trading algorithms continue to gain traction, potentially leading to increased trading volumes in AI-related tokens such as SingularityNET (AGIX) and Fetch.ai (FET). AGIX saw a trading volume of $50 million on February 19, 2025, up from $40 million in late-July 2024 (KuCoin, 2025), while FET's volume increased from $30 million to $40 million over the same period (Bittrex, 2025). The correlation between AI token performance and major crypto assets like Bitcoin remains low at 0.25 (CryptoQuant, 2025), indicating that AI tokens might offer unique trading opportunities independent of broader market movements.
In summary, the unexpected rise in gold, US Dollar, and 10-year note yields has had a notable impact on the cryptocurrency market, particularly Bitcoin and Ethereum. Traders should monitor the technical indicators and on-chain metrics closely for signs of potential reversals or continued momentum. While no specific AI news was reported, the ongoing development of AI technologies continues to influence market sentiment and trading volumes in AI-related tokens, offering potential trading opportunities for those looking to diversify their portfolios.
The Kobeissi Letter
@KobeissiLetterAn industry leading commentary on the global capital markets.