Gold’s safe-haven status questioned as risk market ties deepen

Gold has lost part of its old safe-haven image as its price action now moves closely with risk assets such as Bitcoin and the S&P 500, according to economist Robin Brooks.

According to Brooks, gold no longer behaves like the traditional hedge investors once expected during periods of market stress. He said the metal now trades as a pro-cyclical, high-beta asset, with its correlation to the S&P 500 rising above 0.50 in recent months.

Gold’s safe-haven role comes under pressure

Brooks said gold historically kept a correlation near zero with the S&P 500, while Bitcoin’s long-term correlation with equities usually stayed below 0.15. During the late 2025 and early 2026 “debasement trade,” Brooks said Bitcoin’s equity correlation climbed as high as 0.55.

At the same time, gold’s correlation with U.S. equities also increased. Brooks said gold now matches Bitcoin’s correlation with the S&P 500, a setup he described as unusual for an asset long treated as a shelter during geopolitical or economic stress.

The economist said gold now falls with equities when investors reduce exposure to risk. In Brooks’ view, that behavior works against the basic purpose of a safe-haven asset.

Retail demand changed Gold’s market behavior

Brooks linked the change to the sharp gold rally over the past year and the arrival of new retail buyers. He said the price increase mechanically lifted the value of gold on central bank balance sheets, but he rejected the idea that institutions had suddenly rushed into bullion or abandoned the U.S. dollar.

According to Brooks, heavy promotion of the “debasement trade” in late 2025 brought many retail investors into gold. He said these buyers tend to react more quickly to market stress than older bullion holders.

Brooks said he first expected the high equity correlation to fade after corrections pushed short-term traders out of the market. He now believes gold’s trading structure has changed more deeply.

Schiff warns Bitcoin could face another sell-off

Meanwhile, Bitcoin critic Peter Schiff warned that the latest Bitcoin drop could lead to another round of panic selling. Schiff wrote on June 5 that Bitcoin had broken below $60,000 and touched its lowest level since October 2024.

Schiff said the move erased Bitcoin’s gains after Donald Trump’s November 2024 election win. According to Schiff, the rebound above $61,000 came from opportunistic buying rather than a durable recovery.

“If today’s low is taken out, prepare for a Crypto Black Monday,” Schiff said.

Schiff, chief economist and global strategist at Euro Pacific Asset Management, has long argued that gold is a better store of value than Bitcoin. He also founded SchiffGold and became widely known after predicting the 2008 financial crisis.

Standard Chartered keeps bullish Bitcoin view

Standard Chartered offered a different view in a June 4 client note. Geoffrey Kendrick, the bank’s head of digital assets research, called the latest crypto downturn a “painful week” but kept his long-term bullish outlook.

Kendrick said Strategy could restart heavy Bitcoin purchases, as it has done after past sales. He wrote that investors may later view this period as a buying zone if Bitcoin reaches $100,000 by the end of 2026.