Two assets that are in focus for today are gold and Bitcoin. BTC serves as an alternative store of value amid collapsing regional banks in the US. Then there’s gold, the usual hedge, rising in value thanks to credit default swaps for US banks. So, what are the forecasts circulating for these two volatile assets in 2023?
What’s driving gold and BTC prices?
The U.S. interest rate decision was published on Wednesday along with a press conference with Jerome Powell. Once again, the interest rate was raised, this time to 5.25%. As anticipated, the scheduled one-step hike went as planned. The current consensus forecast suggests that it will be the last interest rate hike this year, after which monetary policy will stabilize or at least soften.
Jerome Powell sent a mixed signal to the market, claiming that current inflation is not pointing to a possibility of an interest rate decline and that the FED prefers modest economic growth rather than a recession. And how did Bitcoin react?
BTCUSD
Bitcoin landed on the 50-day moving average, which corresponds to the dynamic support zone in the context of a rising trend, and may bounce back higher as shown in the chart. It looks stronger than the equity markets, as S&P500 and Nasdaq are consolidating, but Bitcoin is being dynamically accumulated, which could potentially turn into a bigger move with a target of $31,000. Assuming gold doesn’t absorb all the trading volume.
Gold
After First Republic Bank was acquired by JPMorgan Chase & Co, gold got back into play as a potential hedge against the chaos. The level of fear of VIX stays below 20, which is a historically low level. Gold gained good momentum amid banking turmoil in the US and approaches another important resistance area of $2,050.
Currently, there are two possible scenarios for XAUUSD. If it goes higher this week, the move may happen quickly before the coming NFP publication. Otherwise, it may fall back to the support around $2000 below.
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