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Gold stumbles on strong US data, BTPs, bitcoin rises on Visa news

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Silver is bouncing back now that the retail disruption is behind us. The Reddit frenzy led to silver going on a roller-coaster earlier in the week. Silver will thrive this year as expectations are high for the Biden administration to drive green capex with solar panels getting support via presidential executive orders.

Gold under pressure after solid US numbers

Gold is struggling as demand for safe-havens ease following better-than-expected US economic data.  The ADP employment change, final Markit Services reading, and ISM Services index all improved from their readings a month ago and topped expectations.  January was supposed to be a bad month for the economy as the country battled the worst of the virus, so these numbers are welcome news.

Gold’s fundamentals still support higher prices but the failure to maintain the USD1,850 level has opened the door for some short-term technical selling.  Gold should see investors come in and defend the USD1,800 level if selling pressure picks up.

BTPs

Italian bonds rallied on expectations Mario Draghi, the former head of the European Central Bank, will bring stability to Italy as the next prime minister.  The 10-year yield on Italian debt fell 7.3 basis points to 0.576%.  Draghi brings calm to a tense situation as Italy battles a recession and struggles with the fight against COVID.

Bitcoin

Bitcoin is rallying after Visa announced their next major step in expanding their digital currency roadmap.  Visa partnered with First Boulevard in what will help them enable their customers to purchase, custody and trade digital assets held by Anchorage, a federally chartered digital asset bank.

Bitcoin’s acceptance continues to improve, and Bitcoin is once again making a run towards the upper boundaries of its current consolidation phase.  Bitcoin’s next attempt at USD40,000 could easily trigger a wave of momentum trades that target the USD47,500 region.

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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