Welcome to this weekly price update on Bitcoin and Gold!
Since the surge in volume on April 12th, sentiment has shifted for Bitcoin [BTC/USD] and it has been trading in an upward trend. This direction was further reinforced by another price surge on April 20th—making a distinct turnaround from the downtrend that has seen the market slump since late December.
This growth has faced resistance at several key levels, particularly at around $8700 – $8800—a level that then became firm support. On breaking through, it then climbed sharply to $9800, but failed to hold consolidating around $8800 – $9300.
Both of these levels of support could be crucial reversal zones, but have been successfully tested several times, with yesterday’s dip on international labour day hitting $8818.
Should bitcoin pass the $9,300 barrier, and hold this level with healthy volume, then it is likely to face major resistance at the key psychological level of $10k. If however $8,800 is breached, then a retrace to the $6,000 region could be a possibility.
Trading volume remains in a healthy range, with the 24 hr volume consistently over $8 billion— a level that hasn’t been maintained since late February. International news has also been bullish, with monster Japanese financial group SBI unveiling plans to open a virtual currency exchange in Summer of this year. However, caution is required as the space is currently under some serious regulatory scrutiny by the SEC.
XAU/USD – Strong Demand for the Dollar Puts Bears in Control
The Bears have been biting away at Gold [XAU/USD], which has suffered from a strong US dollar, and dropped to $1302 yesterday—an almost 5 percent dip from the April 11th high of $1365. Over the past few hours, it has bounced back as Chinese buyers have returned to the market after Labour Day.
Demand for the dollar has largely been driven by speculation that the Federal Reserve will keep interest rates on hold, and lift borrowing costs in June due to rising inflation and low unemployment. This sentiment is likely to influence the price for the remains of the day, until The Fed announce their decision at 18:00 GMT.
Further bearish pressure comes from the geopolitical front, where denuclearisation talks between North and South Korea have reduced the demand for gold, which is traditionally considered to be a safe haven in times of diplomatic crisis.
Following the conclusion of the Fed Monetary Policy Meeting, investors will be looking for indicators on the future of the gradual tightening path, which could influence the direction of gold. Any recovery is likely to face resistance at $1316, but strong support can be found around the $1302 region.
Disclaimer: This information is not a recommendation to buy or sell, and is only to be used for educational purposes.