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β‘ Gold loses its luster and its arguments
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Each generation gives birth to its idols. If at the end of the 20th century "whales" bought gold, now digital assets have taken the place of the market idol. Thanks to FOMO speculators, bitcoin has added 40% since the beginning of the year and is confidently taking capital from stocks and gold.
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The fact of bitcoin-ETFs and their successful launch in terms of investor interest has had a negative impact on gold investments and brought significant institutional money into the bitcoin ecosystem. Speculators are now actively accumulating crypto and getting rid of gold positions.
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Gold is thought to be an inflation hedging tool. However, in reality, the Fed's monetary policy serves as an intermediate link. During periods of rate hikes, the precious metal usually declines as the dollar strengthens and U.S. Treasury yields rise at the same time. However, in 2022-2023, when these processes took place, gold showed suspicious stability. This was due to record purchases by central banks, which overshadowed the negatives in the form of capital outflows from ETFs.
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The XAU/USD bulls entered 2024 in an elevated mood. There was no shortage of optimistic forecasts of $2400 to $3000 per ounce. The actual start disappointed - there were even attempts to drop below the $2000 mark.
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Alas, if the start of Fed policy easing shifts from June to later, the US dollar will get a new growth driver, which will negatively affect gold. The markets are waiting for the PCE index data, which most likely will not make gold happy. Technically, on the daily chart of XAU/USD there is consolidation near the fair value at $2034. A fall of quotes below the support at $2025 will allow gold to draw a 1-2-3 reversal pattern, and its combination with the "three Indians" pattern will give grounds for medium-term purchases on the rebound from the area of $2000-2010.
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Let's see what will come out of it.
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Profits to yβall!