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This month, gold has outperformed bitcoin after crypto markets shuddered following the recent FTX collapse, with the precious yellow metal climbing 6.12% since the first of November. The US housing market has shown weakness and October’s US inflation rate was lower than expected. Analysts believe these economic trends helped push the price of gold up 3.81% against the dollar on November 10, 2022, after the US Bureau of Labor Statistics published October’s Consumer Price Index (CPI).
Bitcoin has seen better days as the leading crypto asset is more than 18% lower than it was during the first of November. A good portion of the crypto asset’s losses in USD may contribute to the FTX collapse and the chaotic aftermath that followed.
An ounce of gold, on the other hand, has risen 6.12% higher than it traded for on November 1, 2022. On that day, the spot value for a troy ounce of 0.999 fine gold was 1,647.50 nominal US dollars. Today, the value of an ounce of 0.999 fine gold is approximately $1,748.49 per unit.
Analysts, gold bugs and economists attribute some of gold’s success over the past two weeks to the slowdown in US real estate sales. The National Association of Realtors (NAR) reported Friday that “sales of existing homes fell 5.9% in October.”
“Existing home sales declined for the ninth consecutive month to a seasonally adjusted annual rate of 4.43 million. Sales fell 5.9% from September and 28.4% from a year ago, the NAR report says. The NAR study further attributes falling home prices to the Fed’s aggressive rate hikes that have pushed the 30-year mortgage rate up a lot this year.
Most of gold’s rally started on November 1, 2022, and it jumped even higher after the US Bureau of Labor Statistics released October’s Consumer Price Index (CPI). The lower inflation rate pushed the gold price up 3.81% against the US dollar between November 10 and November 13, 2022.
The report also helped bitcoin (BTC) to some extent, as the FTX collapse effect on crypto markets may have been worse if the inflation rate was higher. BTC’s one-hour candle after the CPI report was published jumped much higher.
On November 10, the price of gold per ounce was on its way to $1,706 per unit, and by November 13, 2022, it was trading at $1,771 per ounce. Frank Cholly, RJO Futures senior market strategist, told Kitco News that gold may have run up too fast and the precious metal is simply taking a breather.
“Gold was close to $1,800. And now the market is seeing some profit. It seems to be rolling over. I’m not ready to go bearish yet. We’re taking a breather,” Cholly explained on Friday. However, there is a point where Cholly could turn bearish as RJO Futures senior market strategist said:
If gold closes below $1750, I will start to turn bearish – At $1725, it turns sour for gold.
Just like bitcoin supporters who are betting on the Bitcoin halving event to bolster BTC’s prices, gold bugs believe that the price of gold will be much higher over the next eight years. Traders at primexbt.com believe gold will reach $4721 per ounce by 2024 and by 2030 the traders predict gold will reach $8732 per ounce.
What do you think of gold’s market performance so far this month? Let us know what you think about this topic in the comments section below.
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