Crypto awaits inflation data as gold attracts risk-off flows
Weaker-than-expected U.S. jobs data has shifted market expectations, but crypto gains remain muted while gold surges, raising questions about whether softer inflation this week can trigger a broader rotation into riskier assets.
A disappointing July employment report—showing an unexpected 23,000 job losses—triggered a sharp repricing of rate hike expectations, with odds dropping to 44% from 67% a week prior, according to FedWatch data. Normally, such a shift toward easier financial conditions would drive capital into higher-beta assets like crypto. Instead, the market has gained just 2% this month while gold has climbed more than 7% over the same period.
The weakness in labor data prompted a notable rotation into safe-haven assets, with gold futures on Binance recording one of their strongest trading sessions in four months on Friday, posting over $2.5 billion in volume. This flight to safety suggests investors are bracing for continued macro headwinds rather than positioning for risk-on moves.
The incoming inflation data this week will be critical. In June, U.S. inflation fell to 3.5% from 4.2% in May, a cooldown that coincided with a sharp rally in crypto and its strongest monthly inflows since April. Whether July can repeat that performance remains uncertain, especially with oil prices climbing more than 21% during the month. However, some early signals suggest positioning may be shifting: crypto recorded solid ETF inflows alongside a strong weekly performance, while recent Solana whale activity could indicate traders are preparing for another risk-on move if inflation data comes in soft.
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