WILD RIDE

Bitcoin has experienced a surge in volatility as it approached key weekly, monthly, and quarterly closures, leading traders to anticipate notable price shifts. Over the past 24 hours, Bitcoin hit highs of $63,712, having reclaimed the crucial $60,000 level, which marked a 4.19% gain from earlier in the day, according to CoinMarketCap. This volatile episode came after Bitcoin had dropped by 11.9% over the second quarter, including a 7.1% fall just in June. Moreover, some analysts are suggesting that Bitcoin’s correction phase might be nearing its end, with a predicted stabilization around $56,500, however, not everyone agrees with such perception as other traders are maintaining confidence in future gains. This highlights a mix of caution and optimism among analysts, which makes it essential to monitor Bitcoin’s performance closely.

RECORD-BREAKING RESERVES

According to the World Gold Council, central banks worldwide made substantial gold purchases in 2023, adding 1,037 tons – the second-largest annual amount in history, just behind the record 1,082 tons in 2022. The 2024 Central Bank Gold Reserves survey revealed that 29% of central banks intend to increase their gold reserves, the highest percentage since the survey began in 2018. Meanwhile, 68% plan to maintain their current levels, and 3% expect to reduce them. These purchases are primarily motivated by the need to balance portfolios and address financial market concerns, with gold’s role as an inflation hedge and its stability during crises being key factors. In contrast, de-dollarization and changes in the international monetary system were considered less significant. Moreover, Bank of America analysts forecast that gold prices could potentially rise to $3,000 per ounce within the next 12 to 18 months, and they highlight factors like potential Federal Reserve interest rate cuts and ongoing central bank purchases as potential drivers. Furthermore, it is worh remarking that year-to-date, gold futures have increased by 12.7% and are up 21.1% compared to a year ago, which indeed indicates a strong performance and a sustained interest in gold.

ROCKY PATH

Despite CEO Elon Musk’s efforts to boost demand through price cuts and layoffs, as well as the success of models like the Model Y, Tesla Inc. is expected to report a 5.4% drop in second-quarter sales, delivering approximately 441,019 vehicles.
This would mark its second consecutive quarterly decline, and it is worth noting that while issues such as factory arson and shipping diversions have been resolved, Tesla now faces significant challenges from increased competition and an aging vehicle lineup. As a result,  analysts estimate Tesla will deliver 435,200 units this quarter and about 1.83 million for the year, with only slight growth from 2023. Moreover, the company’s Cybertruck has also faced multiple recalls since production began, nevertheless, it is worth remarking that investor sentiment remains positive due to promises of new models and ambitious projects like humanoid robots and robotaxis. Looking ahead, investors are particularly focused on the upcoming Robotaxi event in August, seeing it as a pivotal moment, however, the company has warned that growth will be “notably lower” in 2024, and the specifics of new model releases remain vague.

SUMMER SURGE

Oil prices have increased due to the anticipation of high summer demand and production cuts by OPEC+. As a result, brent crude rose by 54 cents to $85.55 a barrel, and U.S. West Texas Intermediate climbed 49 cents to $82.03. Over June, both contracts saw about a 6% gain, with Brent maintaining levels above $85 after OPEC+ extended significant output cuts into 2025. This extension leads analysts to forecast supply shortages in the third quarter as summer activities ramp up fuel consumption. In addition, the U.S. Energy Information Administration reported a four-month high in oil production and demand in April, further supporting the price increases. JP Morgan analysts highlighted strong U.S. demand, predicting that peak refinery demand for crude will persist through August. Additionally, expectations of a potential interest rate cut by the U.S. Federal Reserve and rising geopolitical tensions in Europe and between Israel and Lebanon’s Hezbollah have also helped keep prices elevated. Despite these upward pressures, increased oil output from other regions and potential economic instability may limit further price gains

KEY EVENTS HAPPENING THIS WEEK

Monday: Construction spending report for May, S&P final U.S. manufacturing PMI and ISM manufacturing reports for June.

Tuesday: Job openings report for May, auto sales report for June, and speech from Federal Reserve Chair Jerome Powell.

Wednesday: Speech from New York Fed President John Williams, U.S. trade deficit and factory orders reports for May, ADP employment, S&P final U.S. services PMI and ISM services reports for June, initial jobless claims for week ending on June 29, and minutes of Fed’s June FOMC meeting.

Thursday: Market closed.

Friday: U.S. employment and unemployment rate reports for June, and speech from New York Fed President John Williams.