Naeem Aslam
Zaye Capital Markets
Bitcoin
Bitcoin prices are still very much stable and still, continue to trade between 19K and 20K. This is despite the fact that we have seen tremendous strength coming back for the dollar index after the US NFP data, and a lot of bullish commentaries have come out from a number of Fed members who think that inflation is stubbornly high. What they are trying to say is that the Fed needs to do in order to bring inflation lower.
This week we are going to get the US inflation reading, and it is expected to print a lower reading, perhaps 8.1%, but still, that is not going to be enough for market players. This represents a threat to bitcoin prices because what could potentially happen is that the Fed members may think that they need a number of meetings during which they need to increase the interest rate by 75 basis points before they can actually ease off from the gas. This could bring more strength for the dollar index, which may push the bitcoin price further lower.
Gold
The precious metal is struggling once again. As we mentioned last week, the price level of 1,700 was an important one to hold on to, but bulls have been outpaced by the bears, and this is what we have now. Gold prices are moving lower, and the path of the least resistance is skewed to the downside.
Gold traders are laser-focused on the FOMC Minutes events after the strong US NFP data, and they are also going to keep a close eye on the US CPI data as well.
A number of Fed members will be speaking today, and their comments are likely to give us some clues in relation to what we may hear in the FOMC Minutes. A bullish outlook could push the dollar index higher, and we may see oil prices moving lower.
The information is purely for education purposes only and cannot be perceived as an advise.
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