Gold Price Tumbles Ahead US FOMC Meeting, Bitcoin to Follow?
Highlights
- Gold fell 1% on Tuesday, stabilizing near $2,300 per ounce ahead of the Fed monetary policy decision.
- The prediction market estimates just one Fed rate cut for this year.
- As safe-haven demand wanes, Bitcoin can be next to tumble to below $60,000.
Gold price has been on a spectacular upside run amid tensions in the Middle East but price has been on a decline since last week. The two-day Federal Open Market Committee (FOMC) meeting on April 30 and May 1 has put gold prices under further pressure due to fears of higher-for-longer interest rates by the U.S. Federal Reserve. As safe-haven demand wanes, is Bitcoin next to tumble to $60K?
Gold Price Plunge Jitters Bitcoin Fall to $60K
Gold fell 1% on Tuesday, stabilizing near $2,300 per ounce ahead of the Federal Reserve’s monetary policy decision and non-farm payrolls data due later this week. Investors awaited clues on the Fed and Jerome Powell’s monetary stance as recent US economic data lowered expectations of rate cuts.
The recent PCE data indicated persistent inflationary pressures and Q1 GDP growth of 1.6% showed stagflation. The Fed needs new positive indications of inflation falling as it maintains its benchmark interest rate steady at 5.25% to 5.5%. The prediction market estimates just one Fed rate cut for this year, anticipating a hawkish stance from Chair Jerome Powell in the upcoming meeting.
High interest rates decrease the appeal of non-yielding gold. Nevertheless, the bullion remained supported by a strong physical demand from China and geopolitical risks in the Middle East.
Also Read: Dogecoin Whale Buys 226M DOGE From Robinhood, Price Rally
Bitcoin Price to Fall Under $60K
Matrixport suggests implied and realized volatility is falling fast, but still high compared to 2023. Traders are using a similar strategy they used during high volatility in 2022 to gain attractive yields. However, with bitcoin halving catalyst now passed, Matrixport predicted a lower volatility levels during the summer. This also hints at a low rate of Bitcoin price changes.
On the other hand, QCP Capital said volatility can be expected in the US hours due to Changpeng “CZ” Zhao sentence hearing and sentiments after the disappointing debut by Hong Kong’s spot Bitcoin ETF and Ether ETFs.
Analysts expect Bitcoin price can fall under $60,000 for a better recovery in the crypto market as BTC dominance has surpassed 53.7%. BTC price currently trades at $61,062, down 5% from the high of $64,703.
Also Read: Why Bitcoin Price Is Falling Suddenly?
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