Safe-haven assets are on the rise: Gold breaks through $3400 aiming for a target of $4000, silver aims for $42, could Bitcoin be the biggest winner?

Trump's dismissal of Fed Governor Cook has triggered an escalation of political risk, compounded by signs of economic recession (the Leading Economic Index has fallen 4.1% over six months), pushing gold to strongly break through the $3400 level, while silver holds above the $39 high. The dollar index shows a bearish flag pattern, and after breaking below the 97 support level, it risks a deep fall to the 90 level. This article analyzes the precious metals trend from the triple dimensions of political risk, economic indicators, and technical aspects, and deeply explores Bitcoin as "digital gold" in this wave of safe-haven opportunities.

[Political risks trigger safe-haven demand]

Trump unprecedentedly fired Federal Reserve Board of Governors member Lisa Cook, raising serious concerns in the financial markets about the independence of the central bank. The lawsuit filed by Cook subsequently intensified political uncertainty, leading investors to flock to safe-haven assets. Analysts believe that if Trump seizes this opportunity to appoint more dovish members (such as Waller and Bowman), it could accelerate the process of monetary policy easing. Historical data shows that for every 1-point increase in the political risk index, gold demand increases on average by 0.8%, which is particularly favorable for precious metals performance in the current environment.

[Economic recession signals fully lit]

The Leading Economic Index (LEI) of the Conference Board has fallen by 4.1% over the past six months, with all ten components indicating economic pressure, consistent with the classic recession warning model. The Consumer Confidence Index dropped to levels seen during the pandemic in 2020, with 71% of respondents expecting a recession within a year (an increase of 15 percentage points from last month). These data reinforce expectations for Fed interest rate cuts, with the CME FedWatch tool showing a probability of a rate cut in September rising to 83%. The Economic Uncertainty Index shows a positive correlation of 0.7 with gold prices, and the current environment supports the continued strength of gold prices.

[Gold Technical Analysis: Breaking above $3500 will initiate the journey to $4000]

The daily chart of spot gold shows that after successfully breaking through the resistance at $3400, it is now testing the key range of $3450-$3500. Once it effectively breaks through the psychological barrier of $3500, it may trigger algorithmic buying and accelerate the rise, with the target aimed directly at the historical high of $4000. The 4-hour chart indicates that gold prices are forming a strong consolidation in the range of $3250-$3450, with a 68% probability of accumulating energy for an upward breakout. Seasonal analysis shows that September is usually the best month for gold performance, with an average increase of 2.1%.

[Silver Technical Analysis: Bull Market Structure Targets $42]

The spot silver daily chart is forming a strong consolidation platform around $39, with a bullish hammer pattern forming above the 50-day moving average indicating a breakout is imminent. The RSI indicator remains above the midline, showing sufficient bullish momentum, with a target towards $42 after breaking through the $40 level. The 4-hour chart is forming a bullish structure above the $34.50 support, and the silver-to-gold ratio currently at a historical low indicates there is room for silver to catch up. The recovery in industrial demand (solar panel production up 23% year-on-year) and investment demand creates a double impact.

The Dollar Index: Bearish flag pattern indicates big dump risk

(Source: TradingView)

The daily chart of the US Dollar Index shows a typical bearish flag consolidation, with strong resistance at the 100.50 level (which has formed a bearish hammer pattern). If it breaks below the 97 support, it could trigger a deep correction towards the 96 and even 90 levels. The 4-hour chart indicates that the price continues to be under pressure in the support area, and the ascending expanding wedge pattern suggests a 72% probability of a fall. A weaker dollar will directly boost the prices of precious metals and cryptocurrencies priced in dollars.

[Bitcoin's hedging properties and linkage opportunities]

As an emerging safe-haven asset, the 90-day correlation between Bitcoin and gold has risen to 0.45, reaching a 12-month high. Institutional investors are viewing Bitcoin as "digital gold" allocation:

1. Macro Hedge: Blockchain analysis shows that "whale addresses" have increased their holdings by 120,000 BTC this month.

2. Interest Rate Sensitivity: If the Fed lowers interest rates, the crypto market is expected to see an influx of $4.7 billion in incremental funds.

3. Technical breakthrough: If Bitcoin can break the resistance at 117,570 USD, the target price is 130,000 USD.

4. ETF Channel: The US spot Bitcoin ETF has seen a net inflow for 4 consecutive days, with a single-day capital inflow of $81.4 million on August 28.

Historical data shows that when gold/silver prices rise more than 15% year-on-year, Bitcoin has a 78% probability of achieving excess returns in the following 3 months. The current precious metals breakout may drive funds to rotate into the crypto market.

[Investment Strategies and Risk Warning]

Bullish Strategy:

1. Gold: After breaking through $3500, chase long positions, target $3800-$4000.

2. Silver: Increase position after breaking $40, target $42-45.

3. Bitcoin: Break through the 117,570 resistance level, target 130,000 US dollars.

Risk factors:

1. If U.S. economic data is stronger than expected, it may weaken interest rate cut expectations.

2. The unexpected strengthening of the US dollar index will suppress all dollar-denominated assets.

3. Regulatory risks (especially policy changes in the cryptocurrency sector)

Conclusion

Political risks and economic uncertainties are jointly driving safe-haven assets into a new bull market cycle. After breaking through $3,500, gold is expected to challenge the historical target of $4,000, with silver also showing strong upward momentum. Bitcoin, as a digital safe-haven asset, may become the "dark horse" in this market, benefiting from the dual allocation of institutional funds. It is recommended that investors adopt a "precious metals + cryptocurrencies" composite hedging strategy, closely monitoring the performance of the Fed's interest rate meeting in September and the key support level of 97 for the dollar index. In an environment of rising market volatility, a diversified hedging allocation offers a better risk-reward ratio than betting on a single asset.