Gold has run back towards heavy resistance around $1,950 retracing 50% of its gains from the March to May rally. During last week we saw gold analysts relax targets as the US upwardly revised economic growth forecasts to 1.3% annualised. The economic growth revision sent signals through markets speculating that growth may allow the U.S. to avoid recession, therefore supporting strength of the Dow Jones and the US Dollar over gold.
While there are suggestions higher growth may avoid recession, however – with inflation sitting at 8.3% while economic growth (in USD) and an economic growth forecast of 1.3% it seems obvious that any economic growth in the US has been entirely caused by inflation and in fact the economy is retracting. Accordingly, gold markets remain aligned long term. In the short term Gold seems a good buy at $1.945,L with strong fundamentals around inflation and negative real economic growth, and technical analysis signalling the market is likely to run back towards monthly high of $2,050 if it can find support above its low range of $1,930-$1,950 in the short term.
The impending U.S. debt ceiling negotiation over the coming week will surely impact markets, and as such remain cautious we may see the market find support lower in the $1,800’s before a rally back to its monthly high as we move into June
Overall the markets are being impacted by concerns around the US Treasury running out of cash. The risks of a government shutdown and subsequent default exist at present, which could in the black-swan scenario trigger a wave of bankruptcies and stock market declines as people rush to liquidate assets for cash. This is one to keep a close eye on. Continued concerns around the debt ceiling in the U.S. could create an opportunity for cryptocurrencies, especially if discussions drag on as the deadline of June 1 approaches.
Bitcoin was sitting at $26,821 (USD) at the time of reporting down 0.17% for the week. Ethereum was at $1,821 (USD) experiencing a 0.74% for the week. Tron was the biggest mover of the past 7 days (a top 20 coin) with a 9.36% increase. That rise appeared to be following rumours circulating online that Tron could be considered legal tender in Hong Kong from next month, when retail investors become able to trade in crypto. However, there was an announcement as noted in last week’s regulatory update by the HK SFC on Tuesday, that stablecoins for retail investors was not in play at this point in time.
NFT sales on Ethereum, the most-used blockchain for NFTs, dropped 14.22% in the last 24 hours to US$13.48 million. Sales on the Bitcoin blockchain fell 22% to US$2.78 million. The Mutant Ape Yacht Club collection saw the most sales among Ethereum-based NFTs. Its daily sales dropped 4.83% to US$766,090.
The Hong Kong Securities and Futures Commission (SFC) released the conclusions following the consultation on regulation of virtual asset trading platforms. The Guidelines for Virtual Asset Trading Platform Operators will become effective on 1 June 2023 with retail users obtaining acess. There were some comprehensive amendments around the insurance side across hot/cold storage, as well as responses associated with use of third party custody, and requirements placed on exchanges in relation to due diligence procedures expected prior to token listings.
Binance Australia suspends AUD fiat services, citing issues with third party – Whilst this was big news last week, this continues to have ripples in the Australian market. AUD deposits by bank transfers are no longer available to Binance users in Australia. There are however plenty of centralised exchanges with on/off ramp still being provided in AUD.
Central Bank Digital Currency (CBDC) news out of China – Financial service providers in China will allow citizens to pay for wealth products using the digital yuan. Per the Chinese media outlet Securities Times, the China Securities Regulatory Commission (CSRC) has “officially approved the first application scenario for the digital yuan in the securities market. What does this mean? The move means that investors will be able to make e-CNY-powered investments via their smartphones.
Huobi Global ordered to halt operations in Malaysia – Huobi Global has been ordered to close its operations in Malaysia following an enforcement action from the country’s securities regulator. The SCM noted that its decision was driven by concerns about Huobi’s ‘compliance with local regulatory requirements’
Last Monday, many around the world celebrated Bitcoin Pizza Day 2023. This represents the community celebrating the anniversary of the first known BTC transaction. The first known crypto transaction was 10,000 Bitcoin for two pizzas; 13 years on, its ingredients alone equate to millions of dollars worth of Bitcoin, or $6.5m today.
Ripple announced it is rolling out a CBDC platform to enable central banks, financial service providers, and governments to launch their own digital currency. In addition, the platform will allow financial institutions to manage and take part in inter-institutional settlement and distribution operations using the CBDC. It will also let global central banks issue both retail and wholesale digital currencies. Pilot Phase – The platform’s use cases will be displayed through the e-HKD pilot.
Tether buys bitcoin with a portion of its net profit to back USDT stablecoin – Tether said it would invest 15% of its net profit into bitcoin to “diversify” the reserves that back its USDT token, which aims to stick to a 1-to-1 peg to the U.S. dollar. That would amount to roughly $222 million, based on the company’s last attestation report, which said the company generate $1.48 billion of net profit.
Sotheby’s First Sale of NFTs From Three Arrows Capital’s Collection Pulled in a Stunning $2.4 Million, Obliterating Estimates – In the first of a series of sales hosted by Sotheby’s to sell off the hundreds of NFTs collected by bankrupt crypto hedge fund Three Arrows Capital, the auction house sold seven NFTs for more than $2.4 million. The sale’s title “Grails,” which in NFT verbiage refers to historical NFTs that are believed to have enduring value, proved true with works from Tyler Hobbs, Larva Labs, Dmitri Cherniak, and 0xDEAFBEEF all maintaining high demand.
Crypto VC Firm HashKey Group Seeks $200M at $1B Valuation – Asian cryptocurrency investment firm HashKey Group is in early-stage talks to raise between $100-200 million at $1 billion valuation. Although terms of the deal remain undisclosed, the Hong Kong-headquartered firm reportedly wants to use the proceeds to expand its customer base as the city is liberalizing crypto policy
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