Gold Surges 9% as Bitcoin Lags While Dollar Hits 3-Month Low

Gold has sharply outperformed Bitcoin over the past month as weakening US economic data pushed the dollar to a three-month low and reshaped Federal Reserve rate expectations. Gold gained 9.3% during the period, while Bitcoin slipped 0.8%, highlighting a widening gap between two assets often viewed as alternatives to the US dollar.

The dollar came under pressure after July employment data showed US payrolls falling by 23,000. Previous estimates for May and June were also revised lower by a combined 103,000 jobs, while unemployment reached 4.1%.

Consumer spending weakened as well. July retail sales declined 0.6% to $763.6 billion after increasing 0.2% in June. Meanwhile, annual consumer inflation eased to 3.4%, with core inflation at 2.5%.

The softer economic picture prompted traders to reduce expectations for another Federal Reserve rate hike. The probability of a September increase dropped to around 30%, compared with roughly 75% in late July. The Bloomberg Dollar Spot Index subsequently fell to its weakest level since May 15.

Gold quickly benefited from the weaker dollar, climbing to approximately $4,407 per ounce. Bitcoin failed to capture the same momentum, trading near $63,572 and recording only a modest daily gain. Bitcoin's 24-hour trading volume stood at about $12.6 billion, suggesting relatively subdued market participation.

Attention now turns to Wednesday's Federal Open Market Committee minutes. The Fed held interest rates at 3.50%-3.75% in July, but the 9-3 vote revealed meaningful disagreement. Beth Hammack, Neel Kashkari, and Lorie Logan favored a quarter-point rate increase.

The minutes could indicate whether other policymakers were also leaning toward tighter monetary policy. A more hawkish tone could revive US dollar strength and pressure gold and Bitcoin, while signs of broader support for keeping rates unchanged may reinforce dollar weakness.

Global PMI data due Friday will provide another test. For now, markets are pricing near-term dollar weakness, but the Fed's internal debate suggests the outlook for US rates—and the next move for gold and Bitcoin—remains far from settled.