Bitcoin fell below the $13,000 mark Friday morning which represented a retracement of over 30% since reaching all-time highs this past weekend. Bitcoin cash and Ethereum also suffered steep declines. The cryptocurrency mania has reached fever pitch in December, with bitcoin at one point more than doubling its November 30 value.
Cryptocurrencies have evolved as legitimate competition to gold and silver as a speculative hold and alternative to fiat. This correction has sparked a run up in the spot price of gold on December 22, with the yellow metal rising almost 1% to make it above the $1,280 mark. Silver was also up 1.15% on the day as of mid-afternoon trading.
Shares of Canadian producer Argonaut Gold Inc. (TSX:AR) were up 7.05% in afternoon trading. The stock has climbed 14.6% in 2017. In the third quarter Argonaut Gold posted a 100% increase in net income from $0.2 million to $0.4 million. Revenues were down 18% due to broadly lower gold prices compared to the same period in 2016. The company expects approximately 60% production growth from its Mexico operations by the end of 2019.
Toronto-based producer Yamana Gold Inc. (TSX:YRI)(NYSE:AUY) stock was up 4.64% in afternoon trading on December 22. Shares of Yamana Gold have now entered the green in 2017 – up 1.6% if the current trend holds up.
A collapse in cryptocurrencies could be a coup for gold and silver as a number of headwinds have emerged to hurt prices in recent months. A strengthening U.S. dollar and improving global economy have seen investor sentiment waver, but both gold and silver could be back in investor good graces beginning in 2018 if bitcoin and other speculative assets continue to plummet.
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