Gold price climbed above $2,000 at the start of the week, but then saw a deep correction. However, the Federal Reserve’s dove surprise, combined with the bad mood in the market, helped gold regain traction in the second half of the week. Bitcoin, which is seen as digital gold, performed well, although not as much as gold. As gold and Bitcoin continue to shine as hot assets amid the ongoing turmoil in the global financial industry, market participants will be watching global returns closely next week.
Data for gold and Bitcoin investors to watch
On Wednesday, the U.S. Bureau of Economic Analysis (BEA) will release fourth-quarter GDP growth. Since these data will be a revision, they are unlikely to attract attention. Earlier on Friday, NBS Manufacturing PMI and Non-Manufacturing PMI data from China will be watched closely by market participants. After the decisive recovery in February, another increase in headline PMIs could help gold gain bullish momentum. This points to an improved demand outlook in China, the world’s largest gold consumer.
Finally, the Personal Consumption Expenditure Price Index (PCE) data will appear on the US economic chart ahead of the weekend. The annual Core PCE Price Index, the Fed’s preferred inflation indicator, is forecast to fall to 4.4% in February from 4.7% in January. The next FOMC meeting will be held in early May, and the CME Group FedWatch Tool shows markets are pricing in a 60% probability that the Fed will not change its policy rate. A stronger-than-expected Core PCE inflation data could bring back hawkish Fed forecasts, although April jobs report and Consumer Price Index (CPI) numbers are likely to drive market expectations. This may force both gold and Bitcoin to take a step back.
Meanwhile, investors will closely follow Fed officials’ statements as the blackout period comes to an end. Also, the panic mood in the markets on Friday showed that investors are on the alert for signs of stress in the banking sector. Therefore, the gold price could benefit from another drop in global returns.
Gold price technical view and forecast survey
Market analyst Eren Şengezer draws attention to the following levels in the technical outlook of gold. The $2,000 area (psychological level, static level) proved to be tough resistance to cracking last week. If this level remains intact and global yields rebound, gold price is likely to make a technical correction. The Relative Strength Index (RSI) indicator on the daily chart is also about to rise above 70, indicating overbought conditions. In this scenario, $1,960 (former resistance, static level) aligns as the first bearish target before $1,940 (static level). A daily close below the latter could open the door for an extended correction towards $1,900 (psychological level, static level).
On the upside, technical buying pressure could strengthen if gold manages to stabilize above $2,000. In this case, $2,050 (static level) and $2,070 (March 2022 high) could be seen as next bullish targets.
Most of the experts surveyed by FXStreet predict that the gold price will remain in a consolidation phase in the near term. However, the one-month view reveals the bearish bias with the average target at $1,958.
Bitcoin bears gain the upper hand over bulls
Ipek Ozkardeskaya, principal analyst at Swissquote Bank Ltd, notes that while Bitcoin is a high-risk asset, there is clear evidence that it is making its way into traditional finance and institutional investors are increasingly getting on board. While the analyst still does not see BTC as a hedge against inflation or a safe haven, he expects the size of the one-off drops to decrease over time.
Over the past few days, we’ve seen Bitcoin struggle to keep up. Now the market is showing some bullish weakness and the bears are trying to take advantage. Saying that the next few days could bring a significant pullback, crypto analyst Michael Nderitu explains why.
Recent data shows that Bitcoin’s failure to continue past the $28,300 resistance level has led to a loss of confidence among investors. Miner exits, which are currently at their highest monthly level according to the latest Glassnode data, have worsened the situation.
Bitcoin miner exits are often considered a sign of confidence. This is because miners usually hold their BTC when there are bullish expectations and sell when there are bearish expectations. Therefore, it is not surprising that they dumped some BTC right after Bitcoin struggled to break beyond the current resistance level.
Bitcoin miner observations are also in line with BTC’s net flow of -119 million dollars in the last 24 hours, according to Glassnode alerts. This is slightly lower than the net flow of $190.5 million on March 24 and even the net flow of $342 million on March 23. It’s important to note that net flows confirm that selling pressure is also slowing. In other words, Bitcoin may not show a strong bearish trend this week contrary to expectations. But this will depend on the probability of market events that could quickly change the outcome.
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