Gold’s Price Dropped 4% in Hours After Fed’s Latest Rate Cuts Comments



The cryptocurrency market is known and critiqued (by some) for its enhanced volatility, a good example of which it witnessed in the past 12 hours or so when prices tumbled, leaving nearly $1 billion in liquidations.

Bitcoin was among the least affected assets, but its price still tumbled from around $71,000 to $65,000 before it recovered to approximately $67,000.

Volatility Across All Markets

The altcoins, however, plunged hard, with numerous double-digit declines within hours. Yet, price declines were evident even in more mature industries, like the US stock markets, where the S&P 500 fell from over 5,210 to under 5,100 in minutes, and so did the Dow Jones Industrial Average and the Nasdaq Composite.

Even gold, arguably the asset best known for its stability amid crisis and lack of volatility, decreased by 4% in hours from its all-time high of $2,433 to $2,333.

Before that, the precious metal was on a roll, especially since it decisively broke above $2,000 earlier this year. The geopolitical tension in Europe and the Middle East propelled further gains, but Iran’s inclusion resulted in massive price increases that drove gold to its aforementioned highest price against the dollar.

XAUUSD. Source: TradingView
XAUUSD. Source: TradingView

However, all markets were seemingly impacted by the latest comments coming from various US Federal Reserve high-ranking officials. Raphael Bostic, the President of Atlanta’s Federal Reserve Bank, as well as San Francisco’s President – Mary Daly – were among those who forecasted a delay in the central bank’s potential pivot from its current monetary policy.

Both branch Presidents were quick to refute the rumors that the Fed would start cutting interest rates anytime soon. Daly indicated that “there is still a lot of work to do” and that there is “absolutely” no urgency to reduce the rates.

Crypto Market Outlook

Although these comments should indeed lead to volatility in riskier markets like crypto, or even Wall Street, gold should actually be spared. Furthermore, given its status as safe haven, its price against the dollar might increase following such comments.

However, the greenback actually rose against other currencies. This is because higher interest rates lead to fewer loans and less cheap money, at least in theory.

Nevertheless, the crypto market is still deep in the red on a daily scale but has recovered some ground since the lows seen last night. After all, more than $250 billion left the market within hours at one point, but there are some promising signals for the next few weeks. Most importantly, the Bitcoin halving is scheduled to take place in just days, an event highly regarded as a catalyst for a new bull run, at least historically.

LIMITED OFFER 2024 for CryptoPotato readers at Bybit: Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!


Source link

You might also like
Leave A Reply

Your email address will not be published.