Market Stability Observed Amid Rate Cut Expectations and Gold Surge

According to BlockBeats, after a volatile weekend, risk assets have stabilized with stocks approximately 1.5% below recent highs and Bitcoin about 10% off its peak. This rebound is partly driven by renewed expectations for interest rate cuts, with swap contracts predicting a cumulative reduction of around 125 basis points by the end of 2026. Federal Reserve Chair Jerome Powell has reiterated plans for a 0.25% rate cut this month, providing short-term support for risk sentiment despite the government shutdown delaying key labor data releases. Gold continues to be a focal point, reaching a historic high of $4,022 per ounce, marking a 52% increase this year. This surge is attributed to strong central bank reserve accumulation and declining real yields. Market narratives are shifting from interest rate sensitivity to liquidity-driven dynamics. Central bank purchases, de-dollarization fund flows, and institutional portfolio hedging have become major forces driving gold's rise, surpassing its traditional role as an inflation hedge. Despite the weekend's market volatility, the correlation between Bitcoin and gold has exceeded 0.85, indicating a high degree of synchronization in fund flows between traditional and digital value storage tools. Gold continues to set new records, and Bitcoin briefly reached new highs before the weekend. With institutional vaults maintaining positions and ETF fund flows remaining robust—yesterday saw BTC ETF inflows of $102.7 million and ETH ETF inflows of $236.2 million—a foundation for a new round of market rebound appears to be forming.