Analyst Warns Gold Trade 'Overheated,' Says Capital Could Rotate To 'Undervalued' Alternatives, Including Bitcoin
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The gold trade is likely "overheated, says The Coin Bureau CEO Nick Puckrin.
"Gold's record run is fuelling fresh price projections, with Goldman Sachs now expecting the shiny metal to reach $4,900 by next December,” Puckrin said in a note shared with Benzinga last week. "But investors should remember that this is what often happens when a trade gets overheated. Gold's surge is now as much a momentum trade as anything else, and momentum trades have a tendency to fizzle out."
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Puckrin added that another factor supporting his view that the gold market is overheated is the relative strength index in response to questions from Benzinga over email.
The RSI is a technical indicator used to identify market momentum and whether a trend is overextended. Puckrin noted that gold’s RSI is above 80, which is typically considered overbought territory.
Gold has been the best-performing asset so far this year amid policy instability and trade tensions. The asset’s record run has accelerated in recent weeks amid growing fears of debasement in major currencies such as the U.S. dollar. The asset was most recently trading at just over $4,160, up nearly 58% year-to-date.
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But according to Puckrin, after gold’s extended run, investors are likely to seek higher beta plays in “undervalued” alternatives such as “other metals and commodities, tokenized real assets, and Bitcoin.”
“This shift may well become the dominant narrative for the remainder of 2025 as gold takes a breather,” he wrote.
Puckrin told Benzinga that such a capital rotation could help drive Bitcoin to a new record high around $150,000. The asset was most recently trading at $113,000, up 15% year-to-date.
Despite Puckrin’s remarks positioning Bitcoin as a possible alternative to gold, the digital asset experienced a flash crash this past weekend as President Donald Trumpthreatened 100% tariffs on Chinese goods. Comparatively, gold continued to melt up to new price records, proving once again its preferred safe-haven status.
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Still, Puckrin told Benzinga that his view of capital rotating from gold to Bitcoin has not been affected by the recent market swings.
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