Gold price is struggling to capitalize on its modest intraday rise. Thus, it attracts some selling near the $1,980 region during the early European session on Wednesday. Bitcoin, on the other hand, could not maintain the level of 27 thousand dollars and slipped under psychological support again. Now the focus of gold and Bitcoin investors is on the Fed Minutes and the US boron limit crisis.
Investors focus on Fed Minutes
Recent hawkish statements by several Federal Reserve officials have raised the possibility of further rate hikes. Markets are currently pricing in a 30% probability of a 25 basis points (bps) increase in June. This is an important factor that acts as a headwind for gold and Bitcoin. Therefore, the focus of the gold and crypto market is on the Fed minutes. Because the Fed Minutes will play a key role in influencing the near-term US Dollar (USD) price dynamics. Investors will look for clues from the minutes as to the path to future rate hikes. Because the interest outlook has the potential to provide a new direction momentum to gold and Bitcoin.
US debt ceiling problems and impending recession risks
Meanwhile, the lack of progress in talks on raising the United States (US) debt ceiling and concerns about the global economic slowdown may limit the downward movement of the safe-haven gold price. As you follow on cryptokoin.com, President Joe Biden and representatives of Congressional Republicans on Tuesday ended another round of debt ceiling negotiations without a deal to raise the government’s $31.4 trillion borrowing limit.
This raises fears of America’s unprecedented debt default. This negatively affects the sentiment of gold and Bitcoin investors. Other than that, looming recession risks could further deter bears from placing aggressive bets around gold.
Gold price technical outlook: Downside pressure subsides
Market analyst Haresh Menghani draws attention to the following levels in the technical outlook for gold. Technically, the $1,955-1,950 region is emerging as an immediate and strong support. This is followed by the 100-day Simple Moving Average (SMA), which is currently stable around $1,935-1,930. A convincing break below the latter will likely be a new trigger for bearish traders. This will reveal the $1,900 round figure mar.
On the other hand, it is possible that the $1,980-1,984 supply zone will continue to act as a strong barrier. It is also likely to trigger a short-term rally if cleared decisively. Gold could aim to regain the psychological $2,000 mark later and climb towards the next relevant hurdle near the $2,020-2,025 region. It is possible that some follow-up purchases will remove the short-term negative outlook. This will change the trend again in favor of bullish traders.
Fed Minutes key to gold and Bitcoin’s direction
Markets are mixed ahead of major events like the latest Fed Minutes. In this environment, Bitcoin lost $27,000 again while gold was trying to protect its position. Given the consolidation in prices, it is possible for traders to witness further lack of activity. Meanwhile, recent updates on the US debt ceiling negotiations and US-China tensions have been mounting. These, in turn, will be the key investors will follow for the clear aspects of gold and Bitcoin. Ahead of the Fed Minutes, analyst Matias Salord made the following assessment:
The increase in US yields has been a major factor behind the recent upward movement of the US Dollar Index. The upcoming announcement could further boost the Dollar’s strength, especially if it provides an optimistic outlook. However, if the Fed minutes fail to do so and the outlook is pessimistic, yields could fall and challenge the current bullish outlook.
Gold technical analysis: Upside space limited
Technical analyst Anil Panchal looks at the technical picture of gold and shares the following analysis. Gold price rallied closer to $1,954 by press time after bouncing off an upward sloping support line from early April. The gold recovery is also taking cues from the bullish signals from the Moving Average Convergence and Divergence (MACD) indicators, justifying the fixed Relative Strength Index (RSI) line placed at 14 surrounding the 50.0 level.
However, it is possible for gold to extend the recent recovery towards the $1,985 resistance combination consisting of the 50-SMA and the three-week descending trendline. If gold manages to break through the $1,985 hurdle, the 200-SMA near $2,003 is likely to push gold buyers before leading them to the previous month’s high at $2,050.
On the other hand, a sustained break of the $1,954 support line would likely give the bears control. However, before that, it is likely to lead gold towards the late March low of $1,934. In this case, $1,911, the 61.8% Fibonacci retracement of gold’s March-May rise, is likely to be an intermediate stop for gold sellers. Overall, gold is likely to rise. However, upside space remains limited.
Bitcoin price wants to rise
Crypto analyst Lockridge Okoth analyzes Bitcoin’s technical outlook ahead of the Fed Minutes as follows. Bitcoin price continues to rise after the bulls regained control in Tuesday’s trading session. Bitcoin price is facing selling pressure from the 50-day Exponential Moving Average (EMA) at $27,525. It is possible that this hurdle turns into decisive support, paving the way for more gains. Also, as investors expand their networks further, the odds will be better for BTC to break above the psychological level of $27,680.
If the buying pressure rises above the mentioned level, Bitcoin will likely hit the $28,571 resistance level. Besides, it is likely to hit the $30,441 level soon in a strong bullish case. Such a move would mean a 10% rise from the current level.
Staying above May lows will play a key role in the recovery of the bulls. Breaking below these levels will create a new series of bearish highs and lows, with lower lows and highs. If it stays up, it means a pullback from April highs is just a correction in a broader uptrend. This bullish view is powered by the Relative Strength Index (RSI), which gives a signal to buy BTC when it breaks above the yellow band. Its northward movement and the Awesome Oscillators flashing green and pulling towards the midline indicate more bulls are approaching the scene.
BTC 1-Day ChartConversely, it is possible that the bears’ takeover could cause a pullback in Bitcoin price. Thus, a slide from the 100 and 200-day EMAs to $26,377 and $24,951 respectively, before retesting the mid-March lows of around $24,105, is possible.
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