Gold is vulnerable to further declines

Gold hit its lowest level in nearly a week on Wednesday after data showed the US economy started 2024 on a strong footing, with business activity rebounding in January and inflation appears to be easing. The preliminary reading of the Manufacturing Purchasing Managers’ Index for January was 50.3 points, while expectations were for 47.9 points, the same as the previous reading. The Services Purchasing Managers’ Index recorded 52.9 points in the preliminary reading for January, while expectations were at 51 points, and it recorded 51.4 points in the previous reading.

“The US economy continues to defy pessimism, and this allows markets to price in monetary policy easing and the risk of recession.”

The dollar index rose to hover near a six-week high, making gold, which is priced in US dollars, less attractive to holders of other currencies, while US Treasury yields on 10-year notes were not far from a one-month high of 4.1980% reached last week.

Gold and the dollar now

Gold futures are now down 0.05% to $2,015 an ounce.

Gold spot prices rose by about 0.1% to $2,015 an ounce.

On the other hand, the dollar index rose 0.05% to 103.08 points.

Other metals

Silver in spot trading rose 0.4% to $22.76 an ounce, platinum rose 0.3% to $901.53, and palladium rose 0.1% to $964.07.

Oil prices rise amid decline in US crude stocks and hopes for Chinese stimulus

Oil prices rose on Thursday after data showed a bigger-than-expected decline in US crude stocks last week, while the Chinese central bank’s announcement of a cut in reserve requirement ratios for banks boosted hopes for more stimulus measures and economic recovery.

Brent crude for March delivery rose 20 cents, or 0.3%, to $80.24 a barrel. US West Texas Intermediate (WTI) crude rose 22 cents, or 0.3%, to $75.31 a barrel.

“The sharp decline in US oil stocks and expectations for economic recovery and more stimulus measures in China boosted oil prices,” said ING Bank’s head of commodity research, Warren Patterson.

Tension in the Middle East also supported buying.

Bitcoin could face a major crash in the coming months, with some analysts predicting it could fall below $20,000

The largest cryptocurrency in the world fell below $40,000 in the past few hours, hovering around this level for several days, while many retail investors believe it is heading for a major decline by the end of the year, according to a research report from Deutsche Bank.

This comes amid the volatility of cryptocurrency prices in the past 24 hours, as it is still witnessing significant volatility since the official launch of Bitcoin funds in the United States.

According to a report, more than a third of the people surveyed believe that Bitcoin will collapse to less than $20,000 by next January. About 15% of people said they expect the price to range between $40,000 and $75,000 by the end of the year.

The hype surrounding the long-awaited launch of Bitcoin spot exchange-traded funds (ETFs) on January 11th drove Bitcoin’s price to a high of $49,000, its highest level since March 2022. Since then, selling has driven the asset’s price down by more than 20%, to around $39,000.

The new Bitcoin spot ETFs are expected to help broaden institutional adoption of Bitcoin, according to report analysts Marion Laborie and Cassidy Ennis Grace. However, the majority of ETF inflows have come from retail investors, according to the report.

The survey was conducted from January 15th to 19th, and 2,000 people in the United States, United Kingdom, and eurozone were asked about their views on Bitcoin’s price and volatility.

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