BullionFX Market Report – May 12, 2023  

Gold has run back towards last week’s highs of $2,050, breaking its resistance of $2,020 as mentioned in the previous report. Gold is currently hovering around the $2,050 resistance at $2,040 – well positioned for a run.   

If Gold can push through the $2,050 support, and sustain that level, we may see a new floor price for gold around the $2,000 mark signalling the start of a bull run in gold markets.   

Fundamentally, gold markets are also aligned for a bull run. Historically gold has always lagged inflation by 12-18 months, and over the long term despite prices of property, vehicles, energy, and food rising – the corresponding prices in Gold have generally been consistent. This implies that gold should rally in 2023 by the same amount as inflation in 2022.     

The US Dollar index (DXY) has also lost further ground from last week, adding to upward pressure on gold markets, due to gold being priced over USD. The US Dollar Index is still trading along lower resistance. If the US Dollar breaks resistance to the downside, the market can expect a further rally in the price of Gold. This is more likely to happen now over last week, as the US Federal Reserve rate rise is behind us with another consecutive rate rise on May 3. 

Bitcoin is heading for a lower close across the seven days, with it residing at US$28,170 at the time of reporting per coinmarketcap. Bitcoin was up earlier in the week but dropped in the afternoon trade on Wednesday. This also followed the lead of equities and futures declines, as most investors await the key inflation data to be released out of US and China this week. Bitcoin prices slid despite the network surpassing 5 million Ordinals inscriptions.  

Ethereum followed a similar trajectory to Bitcoin over the last week, but is currently at US$1,879, close to the same level as one week ago.  

In the NFT market, there was an overall 7% decline during the week. 24-hour NFT sales on Ethereum, the leading blockchain for NFTs, rose to US$18.5 million, driven by a +300% increase in Azuki sales that generated over US$2 million in sales for the blockchain. Sales for the Bored Ape Yacht Club, the biggest Ethereum-native NFT collection, also rose 114% to US$1.5 million in the past 24 hours.  

Meme coins were a big focus across the week, with PEPE up 102% for the last 7 days. Floki was also experiencing some big volatility and up 10% for the week.  

Polygon’s Matic token was the biggest loser among the top 10 coins by market cap, falling 9.45% to-date. 

Hong Kong will have ‘tight’ crypto regulation – Cryptocurrency firms moving to Hong Kong should expect tight regulations as part of the city-state’s new regulatory regime, Eddie Yue, the Chief Executive of the Hong Kong Monetary Authority (HKMA) stated. Yue noted that Hong Kong’s crypto regulations have been strict these past years, but they have been adjusted to a more “reasonable” level, which will bring more transparency to the crypto space. The regime aims to restore Hong Kong’s status as a global digital asset hub.  

Standard Chartered signs MoU with Dubai International Financial Centre to collaborate on digital assets – Standard Chartered has signed a memorandum of understanding (MoU) with the Dubai International Financial Centre (DIFC) to collaborate on digital assets, including digital asset custody. The MOU aims to foster cooperation between Standard Chartered’s wider digital assets agenda and the DIFC’s Innovation Hub, Dubai’s hub for fintech start-ups.  

International Interoperability’ on Regulations Key to Mass Adoption: UK Crypto Parliamentary Group Chair – Dr Lisa Cameron highlighted progress on international regulatory standards by the G7 and G20 as a positive sign for the crypto industry. Regulatory “international interoperability” is vital if cryptocurrency and digital assets are to achieve mass adoption. 

PayPal’s crypto holdings increased by 56% in Q1 2023 to nearly $1B – The lion’s share of the fintech’s held cryptocurrency assets lie in BTC and ETH with $499m and $362m respectively — up more than 56% since Q4 2022.  

Microsoft, Goldman Sachs, others partner in new blockchain network  – The Canton blockchain network for financial institutions is being launched by Digital Asset and a group of firms, including Microsoft, Goldman and Deloitte. The Canton Network will be a privacy-enabled interoperable blockchain network aimed at those working with institutional assets. It will allow the synchronisation of financial markets that were “previously siloed”. The network will begin testing its capabilities in July, which include extensive privacy controls and the ability to achieve the scale and performance needed by major financial institutions.   

Binance to integrate Bitcoin lightning network – Binance announced today that it would consider adding Lightning support for deposits and withdrawals. Lightning is a layer2 off-chain network running atop the Bitcoin blockchain. The network can instantly handle millions of transactions at faster speed with cheaper costs. 

SUI mainnet goes live as token sees immediate action on Binance, OKX, and other exchanges – The total supply of the SUI token is capped at 10 billion coins, with tokens running on delegated Proof-of-Stake, or dPoS, consensus algorithm. Shortly after the trading launch, the value of the SUI took a sharp dive to below $2. According to data from CoingGecko, SUI tanked40% from its opening price.   

Sui, or the Sui Network, is a layer-1 blockchain and smart contract platform designed to increase Web3 adoption with fast speeds and high scalability. The Sui platform relies on delegated proof-of-stake. That means that SUI network users can elect and vote for delegates to confirm the next block. The Sui project is famous for being built on Move, a new Rust-based programming language designed at Meta.  

Bhutan has secretly been mining $BTC with hydropower – Bhutan uses Himalayan rivers to generate energy used to mine Bitcoin, local reports reveal. The scale of Bhutan’s mining operations remains a mystery, with little information available about the location, size and profitability of its mining farms. 

DeFi Powerhouse Curve Finance Deploys Decentralized Stablecoin on Ethereum –Decentralized finance protocol CurveDAO has successfully launched its algorithmic stablecoin crvUSD on the Ethereum network – minting more than $22 million worth of the crvUSD token so far. 

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