The final month of the year has seen a surge in the business market, with gold hitting record highs and Bitcoin surpassing $41,000 in a rally that extends to Ethereum and other cryptocurrencies.
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Gold, often considered a safe haven, reached an all-time high with spot prices reaching $2,100 in the first trading session of the week. The ongoing Israeli-Palestinian conflict and expectations of interest rate cuts have driven demand for the precious metal.
A World Gold Council survey revealed growing pessimism about the US dollar as a reserve currency, with 24% of central banks planning to increase their gold reserves over the next 12 months. The recent rally in gold prices reflects its role as a reliable store of value during times of economic and geopolitical uncertainty.
Simultaneously, Bitcoin broke above $41,500 in the early hours of Monday, marking its highest level since May 2022. Ethereum also experienced a surge, rising above $2,200. Bitcoin’s value has more than doubled this year, fueled by investor speculation about the potential approval of a US ETF tracking its price.
The recent legal victory of Grayscale in its pursuit of a spot ETF contrasts with the SEC’s cautious stance on approving such products.
Federal Reserve Chair Jerome Powell’s recent remarks, signaling a need for balance between maintaining tight monetary conditions and supporting the US economy’s gentle landing, eased market concerns.
Traders are now pricing in a high likelihood of the Fed holding rates until December and a substantial chance of rate cuts by March 2024. The Fed’s upcoming meeting on December 12 and 13 will provide further insights into its monetary policy.
(C)ControlTV2023.
