Gold (GC=F), silver (SI=F), and bitcoin (BTC-USD) were all hitting record highs as the stock market hovered near its own peak, with investors seeking a hedge against mounting government spending and looser monetary policy.
Gold futures neared $4,000 per troy ounce on Monday, while silver also jumped to $48.50 per ounce. Meanwhile, bitcoin jumped above $125,000 per token, also hovering at new highs.
The jump in both “analog gold” and “digital gold” comes as questions grow over whether the current AI boom is fueling a bubble with stock market valuations last seen during the dot-com era.
In Japan, stocks (^N225) reached record highs after the leading political party elected Sanae Takaichi over the weekend as its next prime minister. Market analysts view Takichi as a “fiscal dove,” supporting government stimulus to grow the economy.
Japan’s surprise weekend election further indicates “how much of the developed world is pivoting into a ‘Run It Hot’ fiscal dominance framework, carrying monster deficits in order to try and outgrow debt,” noted Nomura Securities analyst Charlie McElligott.
“Accordingly, Gold, Silver and Bitcoin are again simultaneously moving to fresh ATH’s as the chief winners in this latest escalation of the … ‘Debasement Trade,’ alongside equities then too ripping to record highs as well,” he added.
The “debasement trade” refers to investors shifting into hard assets to guard against what they see as the erosion of fiat currencies’ value due to inflation, heavy government spending, and debt financed by money creation.