RESSEMBLING TREND?
Bitcoin traders are closely watching the price of gold for insights into the potential for Bitcoin to reach new all-time highs. Analysts believe that the correlation between the two assets could provide insights for investors to make informed decisions about their cryptocurrency investment strategies. In recent months, Bitcoin has been trading in a range between $50,000 and $70,000, while gold has experienced a significant increase, reaching record highs above $2,700. This pattern mirrors the trend seen in 2020 when gold’s rally preceded a surge in Bitcoin prices. Therefore, if gold prices were to drop, it could signal a forthcoming significant rise in Bitcoin values. Nevertheless, it is important to keep in mind that, as for now, we cannot say for sure when gold’s upward trend will begin to slowdown, thus, the future remains uncertain.
SEEKING EXPOSURE
In less than a year, the U.S. spot bitcoin exchange-traded funds are close to reaching one million tokens, currently holding about 967,459 tokens. This quick growth is driven by recent major investments in the funds due to the rising price of bitcoin, which is trading just over $68,000 as of 8:00 AM CST. It is worth noting that although interest in these ETFs had decreased when bitcoin prices were stable or dropping, they have significantly increased now, and the substantial investments in these funds, including a record-breaking $555 million in a single day, indicate renewed interest from investors in cryptocurrency assets. Moreover, it is worth remarking that the recent surge in bitcoin prices may also be influenced by the expectation of a victory for presidential candidate Donald Trump, who is seen as being supportive towards cryptocurrencies, in the upcoming U.S. election.
STRUGGLES DESPITE DEMAND
Although the price of gold is very high right now, Newmont Corp., the biggest gold mining company, did not do as well as expected in the third quarter as in its latest financial report, the company revealed that its earnings fell short of what industry experts had predicted. Let’s remark that due to the current notable demand for gold, many believe that the overall industry would be doing very well, nonetheless, Newmont’s latest results suggest that the other companies in the gold industry may also be struggling to fully leverage the high demand for gold coupled with cost challenges, especially in labor expenses. Thus, although gold mining companies may benefit from the robust performance of gold overall, they could also end up having to deal with turbulent times. Moreover, following Newmont’s earnings reports, the company’s shares took a significant hit, plummeting by 15%, and this shows that investors are unsure about what will happen next in the gold industry.
SANCTIONS SPARKED SURGE
Palladium prices have continued their upward trend as prices are above $1,170.00 as of 8:00 AM CST. Let’s highlight that yesterday was particularly a strong day for the palladium market as prices surged up to 9.5% after the U.S. suggested imposing sanctions on Russian palladium exports at a meeting with G-7 allies. Russia’s MMC Norilsk Nickel is the main palladium producer, mainly used in car catalytic converters, and although the company mostly sells to China, the recent sanctions talk has boosted buying activity because the potential removal of Russian palladium from the market could cause supply shortages as other major producers may struggle to make up for the gap. As a result, there has been an increase in palladium bullish positions by commodity traders. Nevertheless, despite this trend, it is still also important to remark that palladium’s overall prices have declined this year due to a weak global economy and reduced manufacturing demand.
FIGHTING BANK LIMITS
The leading asset manager overseeing over $7 trillion in funds, BlackRock Inc., is urging the Federal Deposit Insurance Corp. (FDIC) to revoke proposed limitations on money managers’ ownership in banks. They argue that these restrictions could have significant repercussions, including disrupting the economy and increasing costs for banks. The FDIC is seeking more oversight of money managers’ holdings in banks due to concerns about potential undue influence, and as result of this its initiative is to regulate situations wherein entities try to control FDIC-supervised institutions through holding companies. However, BlackRock contends that the proposed changes could lead to market uncertainties and deter investments in bank securities, and the asset manager is emphasizing the importance of thoroughly assessing public comments before implementing any regulatory measures, highlighting the need for coordination with other regulatory bodies like the Federal Reserve.
