Political risk spillover: Gold decline and turning point in the cryptocurrency market

Due to political developments such as President Trump’s cancellation of EU tariff policies, the prices of gold and silver have moved from record highs to a downward correction. This market adjustment is not merely a fluctuation in commodity prices but also significantly impacts global investor sentiment, marking an important turning point in the cryptocurrency market.

Ripple Effects of Trump Policies and EU Tariffs on Gold and Silver Markets

Immediately after the announcement of the new US trade policies, gold and silver shifted from their historic highs to a correction phase. In particular, reports of the cancellation of policies related to EU tariffs alleviated market uncertainty, while simultaneously prompting a reassessment of gold’s status as a traditional risk asset. According to NS3.AI’s analysis, these political signal changes are encouraging investors to rebalance their portfolios.

Reassessment of Risks by Investors Alters Cryptocurrency Allocation

The change in investor psychology underlying the decline in gold is not just a matter of commodity market fluctuations. The temporary easing of political risks is prompting market participants to reconsider their risk tolerance, leading funds that previously favored defensive assets like gold and silver to explore shifts into cryptocurrencies seeking higher returns. This allocation trend is creating new demand in the digital asset market.

Bitcoin Market Uncertainty and Geopolitical Risks

Meanwhile, Bitcoin shows a slight recovery, but overall market sentiment remains cautious in the face of global geopolitical tensions and macroeconomic uncertainties. Currently, BTC is priced at $84.34K (24-hour volatility: -0.21%), with limited short-term price fluctuations. However, how the psychological shift caused by the decline in gold will influence future supply and demand in the crypto market depends on the progression of political and economic developments.