Gold steadies, bitcoin eyes USD20,000

Gold enjoys temporary reprieve

Gold is finally enjoying some reprieve after finding some support just ahead of the USD1,750-1,760 region, which coincides with the highs of late spring/early summer. The level coincided with the 50% fib level from the pandemic lows to highs and may be responsible for the sudden surge in buying interest. It may also be a little premature.

It’s been an impressive rebound today, with the price climbing back above USD1,800 in the process. But there are some major obstacles ahead and I’m not convinced it has the stomach for the fight at the moment. I think the rally may well face significant counter-pressure in the near-term, particularly around USD1,850, should it get that far.

Still, it is encouraging for gold. The USD1,690-USD1,760 region is big for the yellow metal and could be a major test of its bullish prospects over the medium term. I think this area will be tested a little more before it has a proper run higher, with another flurry of stimulus this month potentially being the catalyst for such a move.

Bitcoin continues to flirt with USD20,000

Bitcoin hit fresh highs today but has once again retreated ahead of the psychologically significant USD$20,000 level. I think the rally could kick into a higher gear if this level is overcome, likely lifting the rest of the space with it. Interest is only going to increase as we dive deeper into record territory which has historically been very positive in the near-term for prices.

Whether that is fundamentally warranted though is another thing and the more aggressive the rally, the more of a concern it becomes. It has a history of coming down in flames after hype-driven surges. There’s nothing to suggest that wouldn’t happen again.

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

Latest posts by Craig Erlam (see all)