Today is one of the important days for gold and the biggest cryptocurrency Bitcoin (BTC). Here is what will happen today and what to expect…
Experts draw attention to these developments for gold and BTC
Rapidly rising inflation, interest rate hikes and the risk of recession come to the fore. According to analyst Phil Carr, this situation will continue in the second half of 2022. Looking at this week, the trader’s attention is turned to the Bank of England’s monetary policy meeting scheduled for Thursday. As one of the closely watched “4 Big Central Banks”, this event is expected to be an important market mover and shaker. In particular, the BoE is expected to follow in the footsteps of the Fed by making the first rate hike. If it does, it will be the first rate hike since 1995.
The Bank of England is expected to raise the key interest rate by 50 basis points to 1.75 percent. Thus, it will realize the biggest interest rate increase in 27 years. Meanwhile, the bank is struggling desperately to combat record high inflation. Current levels are well above the UK government’s inflation target. There are fears that inflation could exceed 12 percent by October as prices for food, fuel, housing, clothing and energy continue to rise at a record pace, deepening the country’s historic cost of living.
The UK central bank is concerned about lagging behind its peers, especially the US Fed, which has increased interest rates by a total of 200 basis points in the last 60 days. As we have also reported as Kriptokoin.com, the FED pointed out that the interest hike may be on the cards for September.
Other central banks and their impact on the global economy
In contrast, the European Central Bank waited until last month to raise interest rates. But it reacted with a larger-than-expected half-point gain. It cannot be denied that a series of massive rate hikes by the Fed have put pressure on central banks around the world to counter rising inflation and a strong dollar.
According to the analyst, every major central bank rate hike brings the global economy one step closer to recession. These possibilities were resurfaced last month when economists warned that “central bank monetary policymakers pose the greatest risk to recession from this year.” A growing number of economists argue that the recession has already arrived. Analyst Phil Carr explains how these developments will affect the precious metals market as follows:
If history has taught us anything, then all we know for sure is that both scenarios create extremely lucrative ground for precious metal prices, be it persistent inflation or recession. Right now this is a trader market full of endless opportunities to take advantage of short-term macro-driven volatility. This is the best strategy right now!
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