Naeem Aslam
Zaye Capital Markets
Gold
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.
Bitcoin
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.
The information is purely for education purposes only and cannot be perceived as an advise.
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