Gold and Bitcoin – FXStreet

Naeem Aslam Naeem Aslam

Gold prices are trading lower today as investors worry about the Fed's hawkish monetary policy stance. It seems very clear that the Fed will not be increasing the interest rate by 25 basis points, but the number will be 50 points. Speculators believe that the Fed could increase the interest rate by 75 basis points next week, which we think is an improbable scenario for now.
Nonetheless, the gold price is under tremendous selling pressure, and it is moving fast towards the 1,900 price, which is critical support. We may see the price violating this price level, especially if the US economic numbers beat expectations. That would confirm the Fed is likely to remain hawkish for this monetary policy meeting that is taking place next week, but we could expect them to increase the interest rate next time by 50 basis points.
In terms of Bitcoin's price action, we have seen another lacklustre weekend. We saw the BTC price moving below the 40K price level, which has set a negative tone for cryptos. Remember, 40K is a critical price level, and traders do not want to see the price keep falling below this price level again and again, as this gives bears more power and makes the piece action weak.
But in terms of regulation or overall fundamentals, there is no doubt that they are moving in the right direction. It certainly seems that UAE is becoming the hub of cryptocurrencies. This is primarily due to the region presenting itself as an early adopter and providing a transparent regulatory environment for the crypto space. One of the biggest crypto exchanges, Kraken, is to launch in the UAE. This will only increase institutional capital flow, and we are likely to see more money going into bitcoin. Remember, in terms of Bitcoin, supply is limited while demand seems to be going in one direction and one direction only, which is to the upside.
EUR/USD has lost its traction after having recovered toward 1.0750 on upbeat German IFO data in the European morning. With safe-haven flows dominating the financial markets, however, the greenback preserves its strength and continues to weigh on the pair. Investors await mid-tier US data releases and Wall Street's opening bell.
GBP/USD continues to push lower toward 1.2700 on Monday, pressured by disappointing UK data and the risk-averse market environment. Wall Street's main indexes remain on track to start the day sharply lower, suggesting that the dollar is likely to hold its ground in the second half of the day.
Gold stays on the back foot and falls toward $1,900 on Monday after having lost 2% last week. Although the benchmark 10-year US T-bond yield is down sharply on Monday, the broad-based dollar strength is forcing XAU/USD to push lower.
Bitcoin price has slid below a crucial support level slowly indicating that the sellers are overwhelming the buyers into a slow death. Ethereum, Ripple and altcoins could see a similar bearish fate.
Another directionless week for equities as some initial enthusiasm was knocked on the head from firstly Netflix (NFLX) and then rising bond yields. Netflix found plenty of willing sellers but not too many willing subscribers.
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