Gold Could Be Overheating As Speculators Drive It Past Bitcoin

Gold’s red-hot run through $3000 an ounce might have been at the expense of another speculator’s favorite, Bitcoin, but the 40% rise in the gold price over the last 12-months is also raising doubts about its sustainability.
Too far, too fast, is one way of describing concern about gold which is being powered by a combination of investor concern about the global economic outlook, fear of inflation, central bank buying, and geopolitical tension.
Three one-kilogram gold bars worth 40% more today than 12-months ago. (Photo by Christopher ... [+] Furlong/Getty Images)
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However, it’s the rush past Bitcoin over the last 12-months which points directly to heavy speculative trading which can fade as quickly as it emerges.
A few numbers tell the story of gold v Bitcoin. Since this time last year gold has risen by $880/oz, or 41%, to last trade at $3030/oz.
Bitcoin, over the last 12-months, has gone the other way, down $23,772, or a 22% fall to $82,921.
The disparity between the two assets, neither of which generates a yield or pays a dividend, has been more noticeable over the last two months with gold rising by 11% and Bitcoin falling by 22%.
The rush into gold has lifted the share prices of most gold miners with industry leaders such as Newmont, up 39% since this time last year to be trading broadly in line with the gold price whereas other miners, such as Barrick Gold, is up 24%, and is not keeping pace with gold.