Articles

Layer 1 ETF approvals could drive Hong Kong crypto adoption

May 18, 2024 21:26   FXStreet   Market News  

  • Hong Kong’s approval of Spot Ethereum ETF could pave the way for more Layer 1 tokens being accepted as ETFs. 
  • OKX’s Hong Kong branch OKLINK pointed out that Hong Kong’s attractiveness may have increased among crypto projects. 
  • Coinbase’s recent institutional research report showed that chances of Spot Ethereum ETF getting approved are 30 to 40%. 

Bitcoin and Ethereum Spot ETFs made their debut in Hong Kong on April 30. Following the approval, while ETH holders in the US await the Securities and Exchange Commission’s decision on Spot Ether ETF applications, Hong Kong is an attractive destination for crypto projects. 

Ether ETF approval could open gates to more Layer 1 ETFs in Hong Kong

Crypto exchange OKX’s Hong Kong entity OKLINK states that considering Hong Kong’s approval of the spot Ether ETF, more Layer 1 tokens could find acceptance here. The exchange cites Solana, one of Ethereum’s competitors as an example. 

The acceptance of more Layer 1 chains as ETFs is expected to greatly increase the Asian city’s attractiveness for projects and investors. 

Jason Jiang, researcher at Ouke Cloud Chain Research Institute was quoted in OKX’s research and said, 

The significance of Hong Kong’s issuance of virtual asset spot ETFs is not that it can bring major changes to the market in the short term, but that it signals that Hong Kong financial institutions will accelerate their embrace of virtual assets.

One of the leading factors that makes Hong Kong’s ETFs more attractive is the option for physical redemption. Native investors consider this a lucrative option when compared to US Spot Ether ETFs. 

The fee rate remains relatively high, resulting in a disadvantage and a restricted flow of liquidity and funds to the city’s ETFs. The report states that the recent decline in Bitcoin prices may be one of the factors affecting the low inflow of capital to these assets. 


Full Article

Vitalik Buterin welcomes opposing views on MEV being an attack on Ethereum

May 18, 2024 20:33   FXStreet   Market News  

  • Ethereum team lead Péter believes MEV is an attack on Ether and the Foundation has glorified it rather than addressing the issue. 
  • Co-founder Vitalik Buterin commented on the issue and welcomed opposing stances in the project. 
  • Ether is trading above $3,129 on Binance, at the time of writing. 

Ethereum co-founder Vitalik Buterin commented on the debate on the Maximum Extractable Value (MEV) on Ether. Team lead Péter Szilágyi believes MEV is an attack on Ethereum, says that “MEV has been glorified.” 

Buterin commented on the debate on MEV saying Ethereum does not have a culture that prevents people from speaking their mind. 

Ethereum co-founder welcomes opposing views

Ethereum co-founder and Foundation lead may have opposing views on “MEV” and other issues in the Ether network, however the culture is to welcome different viewpoints, per a recent tweet by Vitalik Buterin. 

Buterin’s comment comes at a time when the community is engaged in a heated debate over MEV and its place in the Ethereum chain. On May 17, Péter expressed his views in a tweet on X. 

Ethereum developer Dankrad Feist slammed Péter’s take and says that the reason for accepting MEV is that it was the only option to ensure that the protocol is fully trusted. Solo stakers of Ether would have left the chain within weeks, lest MEV was accepted by the protocol and the chain can find solutions to the issue. Feist argues that compromises are made in any successful protocol.

At the time of writing, Ethereum price is $3,129 on May 18. The altcoin added 1.17% gains on Saturday and 7.51% gains on a weekly timeframe, as seen on Binance. 


Full Article

Join us in Johannesburg, South Africa this week

May 18, 2024 20:21   Forexlive Latest News   Market News  

Full Article

Ethereum rallies 5% as Vitalik Buterin responds to criticism from community amid Coinbase ETH ETF prediction

May 18, 2024 17:35   FXStreet   Market News  

  • Coinbase analysts expressed confidence that spot ETH ETFs would be approved.
  • Vitalik Buterin has responded to criticisms labeled at Ethereum developers, stating how they have been addressing some of the concerns of community members.
  • Ethereum could see a further rise as it outperforms Bitcoin for the first time in May.

Ethereum (ETH) saw a quick rally on Friday, posting a 5% gain as its co-founder, Vitalik Buterin, responded to recent criticisms from the crypto community. Coinbase analysts have also expressed confidence that spot ETH ETFs would debut in the market soon. 

Read more: Ethereum drops below $3,000 again, spot ETH ETF sparks debate in crypto community

Daily digest market movers: Processing speed, Buterin’s response

Coinbase analysts have said that spot Ethereum ETFs would debut in the market despite the silence from the Securities & Exchange Commission (SEC) towards issuers. “As crypto begins to take form as an election issue, it’s also less certain in our view that the SEC would be willing to front the political capital necessary to support a denial,” said Coinbase analyst David Han.

He added that if the first deadline on May 23 sees a rejection from the SEC, “there’s a high likelihood that litigation could reverse that decision.”

Meanwhile, following Ethereum’s slow price growth compared to Bitcoin and Solana, many crypto community members on X have targeted core Ethereum developers through a series of criticisms.

Many criticized Ethereum’s “acceptance of MEV” after the Department of Justice arrested two brothers for an MEV-related exploit on the number one smart contract blockchain. Others complained that Ethereum folks need to post more about the protocol and its updates.

Read more: US Department of Justice charges brothers for alleged 12-second MEV fraud

One X user, @chainyoda, shared his plight:

More importantly, Geth core developer Peter Szilagyi expressed dissatisfaction with the several upgrades the Ethereum network has undergone in a short while. “My criticism is that you (Ethereum developers have) […] have abandoned due process and rushed to hotfix things.”

The increased concerns sparked a series of posts from several Ethereum core contributors, including Josh Stark, Tim Beiko, Dankrad Feist and Ethereum co-founder Vitalik Buterin.

Buterin gave a detailed response to these criticisms in a blog post, stating that the concerns raised by community members are valid and “are already being addressed by protocol features that are already in-progress.”

He also stated that several other concerns from the community can be “addressed by very realistic tweaks to the current roadmap.” Buterin addressed three major areas that he believes form the majority of the concerns raised:

  • MEV and builder dependence
  • Liquid staking
  • Hardware requirement of nodes

He discussed how Verkle trees, EIP-4444, robust solo staking, and a peer-pressuring development process for MEV reduction can solve these issues.

“There is a near-unlimited number of blockchain projects aiming for the niche of ‘we can be super-fast, we’ll think about decentralization later.’ I don’t think Ethereum should be one of those projects,” said Buterin.

“We should have deep respect for the properties that make Ethereum unique, and continue to work to maintain and improve on those properties as Ethereum scales,” he added.

ETH technical analysis: Ethereum could attempt to break $3,251 resistance

Ethereum posted a 5% gain on Friday after it broke the $3,103 resistance. The rise follows a general appreciation of assets in the crypto market. However, Ethereum notably outperformed Bitcoin in the past 24 hours after several community members highlighted the ETH/BTC ratio was nearing a bottom.

Also read: Ethereum shows slight bullish signs, SEC faces several hurdles in attempts to deny spot Ethereum ETFs

As a result, ETH short liquidations are outpacing longs for the first time. With a total liquidation of $24.5 million in the past 24 hours, short liquidations sit at $17.54 million compared to $6.76 million long liquidations, according to data from Coinglass.

The recent ETH rise has also caused a spike in ETH open interest, which increased by 6.6% in the past 24 hours. This signifies renewed investor interest in ETH, meaning it may see less sideways movement in the coming days.

ETH/USDT 4-hour chart

ETH/USDT 4-hour chart

If renewed confidence prevails, ETH could attempt to break the $3,161 resistance and, if successful, move past the $3,251 mark. However, it’s important to watch out for volatility in the days leading up to the SEC’s decision on spot ETH ETFs on May 23.

Ethereum FAQs

Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.

Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.

Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.

Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.


Full Article

Bankrupt lender Genesi Global could return $3 billion in cash and crypto to creditors per court ruling

May 18, 2024 17:33   FXStreet   Market News  

  • In a May 17 ruling, the presiding Judge approved Genesis’ Chapter 11 repayment plan. 
  • Genesis Global will return $3 billion in cash and crypto to its creditors. 
  • Distribution of funds to creditors will take precedence over parent company Digital Currency Group. 

Judge Sean Lane approved Genesis Global’s Chapter 11 repayment plan in a court ruling on Friday, May 17. In the ruling, the Judge rejected parent company DCG’s objection that Genesis could not pay its creditors more than the value of its assets at the time it filed for bankruptcy in January 2023. 

Nearly $3 billion payout has been approved by the court. 

Genesis Global to pay its dues to creditors

Genesis Global received court approval to return $3 billion in cash and crypto to its creditors. The parent company Digital Currency Group (DCG) claims may be returned after the creditors are paid off their dues.

In a May 17 court ruling, the presiding judge Sean Lane rejected an objection raised by DCG stating that Genesis cannot pay back its customers and creditors more than the value of its crypto assets at the time the firm filed for bankruptcy in January 2023. 

The Judge stated that any funds available for distribution will take precedence over DCG’s claims. At the time that Genesis filed for bankruptcy, Bitcoin was $24,000, it has surged to $66,964, a significant spike in BTC. 

The bankruptcy plan has been accepted and will be used to repay creditors irrespective of the change in asset prices. 

The firm has been working to liquidate nearly $1.6 billion in assets after failure to settle with parent company DCG. 


Full Article

ONDO rallies 7% as exchange supply declines and social rises

May 18, 2024 14:50   FXStreet   Market News  

  • ONDO added 7% to its value on Saturday amidst rising mentions on social media from market participants. 
  • The DeFi token’s exchange supply hit its lowest level in 2024. 
  • On Friday, a whale withdrew nearly $6 million in Ether to buy ONDO, ahead of the rally.  

ONDO, a DeFi token added 7% to its value on Saturday as the asset featured in higher number of discussions on social media platforms. Crypto intelligence tracker Santiment tracks the metric social dominance and helps identify the assets that are gaining traction among traders. 

A large wallet investor withdrew Ethereum and bought ONDO on Friday, ahead of the DeFi token’s price gains. 

ONDO price rallies amidst dwindling exchange supply

ONDO gains relevance among traders as more participants seek risk-isolated, fixed yield loans backed by yield-generating cryptocurrencies. The social dominance of the DeFi token surged to its 2024 peak on Saturday, as seen on crypto intelligence tracker Santiment. 

ONDO

ONDO social dominance

Another key on-chain metric, supply on exchanges shows that ONDO supply is at its lowest level in 2024. Exchange supply helps identify the selling pressure on the asset, higher the exchange supply, higher the likelihood of tokens being sold for profits. This negatively influences prices. 

ONDO supply on exchanges has consistently declined in 2024. 

ONDO

ONDO supply on exchanges 

Data from crypto intelligence tracker Lookonchain shows that a while withdrew nearly $6 million in Ether from an exchange and used it to buy ONDO, on Friday. The whale was likely preparing for the ONDO price rally. 

At the time of writing, ONDO is trading at $1.016, as seen on Binance, up 7% on the day. 


Full Article

PYTH, AVAX, PIXEL among $1.35 billion worth of token unlocks next week

May 18, 2024 10:02   FXStreet   Market News  

  • Pyth, Avalanche, Pixels, and Space ID networks have massive token unlock events on the calendar next week.
  • PYTH ecosystem will hold largest unlock, where 2.13 billion PYTH tokens worth $906.09 million will flood markets on Monday.
  • Depending on market conditions and investor sentiment, token prices may experience significant fluctuations round token unlock dates.

Token unlocks can impact the liquidity of a token in the market. Increased supply from token unlocks may make it easier for investors to buy and sell the token, but it can also lead to price slippage and challenges in executing large trades.

Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC is in a class of its own after ETF approvals

Brace for these token unlocks next week

The release of locked-up tokens can lead to increased price volatility as investors react to the newly available tokens. Depending on market conditions and investor sentiment, the token price may experience significant fluctuations.

Starting Sunday, May 19, the Pixels ecosystem will unlock 54.37 million PIXEL tokens. Comprising 7.05% of its circulating supply, these tokens are worth $19.02 million at current levels.

Pyth has the most voluminous unlock in the lineup. On May 20th, this coming Monday,  2.13 billion PYTH tokens worth $906.09 million will be unlocked. These tokens comprise 141.67% of the circulating supply.

On Wednesday, May 22, the Avalanche network will unlock 9.54 million AVAX tokens worth $329 million and composing 2.49% of the circulating supply.

Space ID is also in the lineup with 18.49 million ID tokens worth $13.21 million and comprising 4.29% to be unlocked on Wednesday, May 22.

Token unlocks this weekend

More closely, there are several token unlocks to watch out for this weekend. Among them:

The Manta Network will unlock 6.67 million MANTA tokens on Saturday, May 18, worth $10.40 million and comprising 2.66% of the network’s circulating supply.

On the same day, the Oasis Network will unleash 171 million ROSE tokens worth $14.82 million, making for 2.54% of the circulating supply.

While token unlocks are considered bearish catalysts, it is worth noting that properly structured token unlock schedules can support the long-term sustainability of a project.

Strategic token unlocks that align with project milestones and development progress can incentivize team members, encourage community engagement, and contribute to ecosystem growth.


Full Article

Spot Bitcoin ETFs gain momentum as investment firms disclose holdings

May 18, 2024 09:17   FXStreet   Market News  

  • Point72, JP Morgan, Millennium Management, and others have disclosed their exposure to spot Bitcoin ETFs.
  • Inflows from company investments have reached a total of $1.3 billion in the last two weeks.
  • Bitcoin ETFs put together strong inflows in May to offset the outflows in April.

Billionaire Steve Cohen’s Point72 held $77.5 million in spot Bitcoin ETFs. This comes as spot Bitcoin ETFs have experienced a substantial influx of capital from investment firms in May, effectively offsetting the outflows observed in April.

Also read: Bitcoin Weekly Forecast: Is BTC out of the woods?

Top investment firms reveal exposure to spot Bitcoin ETFs

Point72, JP Morgan, Millennium Management, and other investment firms have disclosed their exposure to Spot Bitcoin ETFs over the past week. This disclosure may be related to their recent quarterly reports.

Billionaire Izzy Englander’s Millennium Management is the highest investor in spot Bitcoin ETFs, with total holdings of $2 billion.

The latest company to join the list is billionaire Stephen Cohen’s $34 billion hedge fund Point72, which recently disclosed holding $77.5 million in Fidelity Wise Origin BTC (FBTC) in its Q1 report.

Read more: Vanguard CEO shoots down possibility of launching spot BTC ETF despite firms disclosing $100M+ in assets

Notably, according to data from bitcoin brokerage firm River, 13 out of the top 25 hedge funds in the US bought into spot Bitcoin ETFs.

The surge in investments has been particularly noteworthy, with recent data indicating a significant increase in Bitcoin ETF inflows, amounting to a staggering $700 million in the past three days. The inflows from company investments have reached a total of $1.3 billion in the last two weeks.

In a post on X, Bloomberg analyst Eric Balchunas expressed optimism regarding the potential for Bitcoin ETFs in the coming weeks, acknowledging the significant impact of the recent inflows.

Also read: Bitcoin Price Outlook: Will BTC confirm market structure change above $67K?

“The bitcoin ETFs have put together a solid two weeks with $1.3b in inflows which offsets the entirety of the negative flows in April — putting them back around the high water mark of +$12.3b net since launch,” said Balchunas.

In an interview with Bitcoin River, he further highlighted the massive potential this holds for BTC ETFs in the coming weeks.


Full Article

Arbitrum DAO approves M&A pilot as on-chain metrics suggest ARB may rally soon

May 18, 2024 08:17   FXStreet   Market News  

  • Arbitrum DAO approved an eight-week pilot M&A program after 99% support for the proposal.
  • Key on-chain metric hints that Arbitrum is still in buy zone despite 7.5% rise.
  • Arbitrum could see a rally soon following an increase in its MVRV.

Arbitrum’s (ARB) on-chain metrics showed signs of a rally on Friday following news that the Arbitrum DAO approved an eight-week M&A pilot proposal on Wednesday.

Also read: Arbitrum price sets the stage for 30% recovery rally

Arbitrum approves M&A proposal

The Arbitrum DAO showed massive support for the eight-week M&A pilot phase proposal, with over 99% of DAO members voting for it.

According to the proposal, the eight-week M&A pilot would focus on in-depth data-driven research and discussion to provide Arbitrum’s DAO with robust information on whether to approve or deny “further operationalization of the M&A unit and its funding requirements.”

“The overarching aim is to utilize M&A as a key growth driver for the Arbitrum ecosystem and to help the DAO expand non-organically through acquisition opportunities that are not accessible to competing ecosystems, thereby critically enhancing Arbitrum DAO’s capital allocation methods,” stated the proposal.

The M&A move from Arbitrum DAO follows the recent approval from the individual communities of AI tokens FET, OCEAN, and AGIX to merge as one with a new token, ASI.

Read more: Injective to launch Layer 3 chain on Arbitrum, INJ falls 4%

ARB’s on-chain metrics show signs of potential rally

ARB posted an impressive 7.5% gain on Friday, following a generally positive outlook across the crypto market. However, despite the recent gain, data from IntoTheBlock shows that 79.6% of ARB addresses are still out-of-the-money, with only 20.11% -in-the-money and 0.29% at-the-money.

A high percentage of in-the-money addresses signifies potential profit-taking from investors, and vice versa for out-of-the-money addresses.

Global In/Out of the Money

Global In/Out of the Money

As a result, ARB investors are likely to hold onto their assets in anticipation of a tangible price appreciation that would see them being in the money.

A further look into other metrics shows addresses holding 55% of ARB’s circulating supply are out of the money. This may be because of the 1.1 billion ARB — 41% of its current circulating supply — token unlock on March 16. The unlock largely affected ARB’s price growth, correlating with a steep decline that saw ARB drop 103% within two months from $1.83 to $0.93 on May 15.

Also read: Arbitrum price dips post massive token unlock, mass sell-off drives ARB decline

While prices have slightly recovered to $1.03, these metrics show ARB is still in the buy zone for investors looking to open a position in the Ethereum Layer 2 altcoin. However, investors should exercise caution, considering whales hold about 45% of the token’s total supply.

There has also been equal activity from bulls and bears in the past seven days, with 146 bulls and 146 bears indicating uncertainty. However, recent price movement tilts toward the direction of bulls, indicating signs of a potential rally.

ARB’s market value to realize value (MVRV) ratio also confirms the rally signs with a 6.54% growth in the past 24 hours. A bearish change in the general crypto market sentiment would invalidate this thesis.


Full Article

Ondo TVL rises with a market cap reaching $1.32 billion amid strong utility in RWA

May 18, 2024 08:02   FXStreet   Market News  

  • ONDO price has surged 13% in 24 hours sending its market capitalization to $1.32 billion.
  • Ondo Finance TVL has reached $420.89 million, up nearly 20% in May and almost 40% in a month.
  • Strong utility in RWA facilitating creation of decentralized fund management strategies is among possible catalysts.

Ondo Finance (ONDO) price has been on a bullish streak since inception in January, with a sustained series of higher highs. The token’s success is likely attached to the mania that is Real World Assets (RWAs), with ONDO standing in line alongside Polymesh (POLYX), XinFin Network (XDC), Mantra DAO (OM), and Opulous (OPUL).

Also Read: POLYX, XDC, OM, ONDO, OPUL: Top 5 cryptos on watchlist as RWA finance platforms take form

Ondo Finance TVL Skyrockets

Ondo Finance price is up 13% in the past 24 hours, a move that has sent its market capitalization to $1.32 billion.

When the market capitalization of a cryptocurrency increases, it indicates that the overall value of that particular cryptocurrency has grown. This rise in market capitalization can be driven by various factors such as increased demand from investors, positive news or developments related to the cryptocurrency project, adoption by mainstream institutions, or overall market sentiment.

A higher market capitalization generally suggests that there is more investment in the cryptocurrency and that it is gaining popularity and acceptance within the market. This is the case for ONDO.

Alongside the surge in price and market capitalization, Ondo Finance Total Value Locked (TVL) has also skyrocketed to $420.89. This is no mean feat, considering the project is barely five months old.

It is up 20% since the start of May at $352.67 million, and 40% in the past 30 days from $303.35 million on April 17.

ONDO TVL

A rise in TVL refers to an increase in the total monetary value of assets locked in DeFi protocols or platforms. TVL represents the total value of all cryptocurrency assets being utilized for various purposes within the DeFi ecosystem, such as lending, borrowing, providing liquidity, yield farming, and other decentralized financial activities.

A rise in TVL is typically seen as a positive indicator for the DeFi space as it signifies growing interest and participation in decentralized finance applications. It can be driven by factors such as increasing adoption of DeFi platforms, new projects launching innovative products, attractive yields and incentives offered to users, and overall market trends.

The popularity of ONDO comes on the back of its categorization under RWA tokens. This sector of cryptocurrencies tokenizes established commodities from traditional finance and brings them over into the DeFi space using blockchain technology.

Standing among the top five RWA finance platforms poised to change the game, Ondo Finance has been a beast of a platform, displaying significant strength on the charts.

It facilitates the creation of decentralized fund management strategies. It allows for diversified exposure across various DeFi assets.

The platform splits principal and yield returns between fixed and variable tranches, providing options for both conservative and risk-seeking investors. Ondo enhances liquidity provision by offering structured products in DeFi investment.

Technical analysis: ONDO price primed for more gains

Ondo Finance price remains above the Fibonacci Golden Zone, with the most significant retracement level, 61.8%, providing crucial support at $0.7239. The immediate support is the 78.6% Fibonacci retracement level of $0.8673.

With the Ondo Finance price confronting resistance due to the trendline of the Fibonacci retracement indicator, enhanced buyer momentum could see the price overcome this roadblock to reclaim the $1.0500 range high, last tested on March 31. Such a move would constitute a 10% climb above current levels.

The Relative Strength Index (RSI) is climbing, suggesting rising momentum. Its position above the mean level of 50 also accentuates the bullish thesis. Notably, the Awesome Oscillator (AO) has moved into positive territory above the mean level, showing that bullish sentiment is strengthening.

ONDO/USDT 1-day chart

Conversely, a rejection from the trendline could see the RWA token lose support offered by the 78.6% Fibonacci retracement level of $0.8673. If the subsequent support due to the Smooth Moving Average (SMMA) at $0.8240 fails to hold, ONDO price could to the 61.8% Fibonacci retracement level of $0.7239.

A slip below this base would send ONDO price into the Golden Zone, but the bullish thesis would only be invalidated upon a daily candlestick close below the 50% Fibonacci placeholder at $0.6232. This would denote a fall of nearly 35% below current levels. 


Full Article

Gold prices rally and refreshes monthly highs above $2,400

May 18, 2024 06:12   FXStreet   Market News  

  • Gold breaks above $2,400, nearing all-time high of $2,431.
  • Lower April inflation in the US supports Gold’s rally, despite rising Treasury yields.
  • Fed officials remain cautious, with December 2024 rate cut expectations slightly adjusted to 35 bps.

Gold’s price skyrocketed during the North American session ahead of the weekend as XAU/USD traded above $2,400, posting gains of more than 1.5% amid higher US Treasury bond yields. The non-yielding metal extended its advancement and threatened to crack the all-time high of $2,431.

A lower April inflationary reading in the United States (US) sponsored Gold’s leg up above the $2,400 mark, although US Treasury yields climbed. However, the Greenback is battered across the board and tumbled some 0.03%, according to the US Dollar Index (DXY), standing at 104.45.

That revived speculation that the Federal Reserve (Fed) could lower rates in 2024. However, Fed officials stressed that one positive read for inflation is not enough with most regional Fed presidents maintaining a cautious stance.

According to the fed funds rate December 2024 futures contract, expectations that the Fed would lower rates dropped from 36 basis points (bps) to 35 bps toward the end of the year.

Daily digest market movers: Gold price ignores hawkish Fed comments to keep rates higher

  • Gold prices advanced despite higher US Treasury yields and a weaker US Dollar. The US 10-year Treasury note yields 4.42% and is up four-and-a-half basis points (bps) from its opening level. DXY dropped 0.04% to 104.40.
  • On Wednesday, US inflation resumed its downtrend after stalling for six months, according to the US Bureau of Labor Statistics (BLS). The core Consumer Price Index (CPI) ebbed lower from 3.8% to 3.6% YoY in April, easing pressure on the Fed. This and soft Retail Sales augmented the odds for rate cut expectations by the Fed.
  • After the data, US equities rallied to new all-time highs, while the Greenback tumbled sharply, following the path of US Treasury yields.
  • Richmond Fed President Thomas Barkin acknowledged that inflation is decreasing but emphasized that it will “take more time” to reach the Fed’s target.
  • Cleveland Fed President Loretta Mester approved the latest CPI data, noting that the Fed’s current monetary policy stance is appropriate as it continues to assess forthcoming economic data.
  • Fed Governor Michelle Bowman said the policy is restrictive but is willing to raise rates if inflation stalls or reverses.

Technical analysis: Gold price to extend its rally toward $2,500

Gold price’s bullish bias remains intact as the golden metal resumed its uptrend. Gold  buyers gather strength with the momentum on their side as the Relative Strength Index (RSI) stays in bullish territory.

Therefore, the most likely scenario is that XAU/USD might test the all-time high of $2,431. Once cleared, the next stop would be the $2,450 mark, followed by the psychological $2,500 figure.

Conversely, if XAU/USD retreats below $2,400, that could expose the May 13 low at $2,332, followed by the May 8 low of $2,303. Once those levels are surpassed, the 50-day Simple Moving Average (SMA) at $2,284 will be up next.

Gold FAQs

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.

Full Article

NZD/USD Price Analysis: Bulls assert dominance, closes its best week of 2024

May 18, 2024 06:09   FXStreet   Market News  

  • The daily chart reveals a strong bullish sentiment with indicators deep in positive territory.
  • Hourly indicators show a flattening buying traction but remain positive.
  • The pair closed its best week since November 2023.

In Friday’s session, the NZD/USD rose to the 0.6137 level, demonstrating a strong bullish trend. After closing above its main Simple Moving Averages (SMAs) of 20,100 and 200 days, the pair secured its best week since late 2023.

On the daily chart, the Relative Strength Index (RSI) reveals a positive trend, moving from below 60 and nearing the 70 mark. This indicates that the NZD/USD pair is accumulating strength, demonstrating bullish pressure in the recent sessions. Concurrently, the Moving Average Convergence Divergence (MACD) prints green bars, showing steady buying traction.

NZD/USD daily chart

The hourly RSI readings exhibit a consistent positive trend over the recent hours, but was seen finishing at 57.17 but pointing downwards. The hourly MACD chart supports this view, with gradually diminishing green bars indicating a slowing positive momentum as investors take profits.

NZD/USD hourly chart

In conclusion, the NZD/USD is in a robust technical position, showing short and long-term bullish signals on the daily and short-term charts. Although the RSI shows that the pair is approaching overbought conditions and the  hourly indicators show dwindling positive momentum, the pair retains its position above vital SMAs. Traders shouldn’t take off the table further corrective movements as investors might continue taking profits.

Full Article

Rewind