Gold recorded its biggest one-week rise since March. After this, it continued its rise for the second week in a row. It reached the highest level in the last three months with the influence of safe haven demand. Bitcoin price also surpassed $30,000 with a strong move. There will be several high-level data releases on next week’s economic agenda that may affect the movement of gold and Bitcoin. However, investors are likely to focus on the headlines surrounding the Israel-Hamas conflict.
How will Gold and Bitcoin react to the upcoming data?
cryptokoin.com As we reported, next week will see several high-impact data releases. The US economic calendar kicks off on Tuesday with the S&P Global Manufacturing and Services PMI surveys. On Thursday, the US Bureau of Economic Analysis (BEA) will release its first estimate of third-quarter Gross Domestic Product (GDP) growth. It will also release the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, on Friday. Market analyst Eren Şengezer interprets the impact of these data on gold and Bitcoin as follows:
The market’s reaction to this data will likely be simple and short-lived. Strong Q3 GDP growth could confirm the Fed’s view that the US economy remains resilient despite higher interest rates. It could also help the dollar gain strength. On the other hand, monthly Core PCE inflation at or below 0.3% could support the view that the Fed does not need to tighten policy further this year. This could put pressure on the dollar.
It is possible that geopolitical developments will support gold
Geopolitical issues are likely to continue to be the primary factor in the movement of gold prices next week. Israel’s defense minister reportedly ordered troops to prepare to view Gaza “from the inside.” The ground operation is likely to trigger an escape to another safe haven and support gold. It seems unlikely that tensions in the Middle East will ease in the near term, especially as Hezbollah becomes more involved in the conflict.
Gold prices technical view
The analyst evaluates the technical outlook of gold as follows. The Relative Strength Index (RSI) indicator on the daily chart has moved above 70. This highlighted technically overbought conditions for gold for the first time since March. In case gold makes a technical correction, $1,960 (Fibonacci 23.6% retracement of the last uptrend) aligns as initial support before $1,930-1,920 (200-day Simple Moving Average (SMA), 100-day SMA). A daily close below this support area is possible to discourage buyers. Moreover, it is likely to open the door for an extended decline towards $1,900 (Fibonacci 38.2% retracement, psychological level).
On the upside, gold prices will likely face stiff resistance at $2,000 (psychological level, static level). If gold rises above this level, technical buyers are likely to take action. Moreover, there is a possibility of another rally towards $2,020 (static level) and $2,040 (static level).
Bitcoin price is at a critical point
The analyst then looks at Bitcoin’s technical outlook. Bitcoin (BTC) price has produced three significant highs and two significant lows in the past year. This bull trend gave investors a 91.50% return with a peak of $31,818. However, momentum depletion and profit-taking pushed BTC down by around 21%. This correction created a lower low of $25,386 compared to the previous week’s low of $25,941 on the weekly chart. This is the first condition for the trend to reverse.
The second condition for a full-fledged downtrend would be a lower peak. In this case, bears must prevent BTC from making a weekly candlestick close above the last significant weekly high of $30,616. If the bears are successful, they will have met all the conditions for a downtrend to begin. Last week, a majority of investors expected the Bitcoin price to definitely start a downtrend. However, the recent rally in BTC has pushed it to trade around $29,000, a two-month high. This has reduced the likelihood of a downtrend as more investors remain uncertain about the future.
Where will BTC go next?
The weekly Relative Strength Index (RSI) has jumped from the average level of 50. Thus, it shows that the bulls have an equal chance of making a comeback. The Awesome Oscillator (AO) is very close to reversing the zero mean level. The last time AO successfully crossed the zero level was in early 2023, when Bitcoin started a bull rally. If history repeats itself, the RSI is already in place to support such a move.
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