The markets have rallied significantly since June, driven by strong earnings reports from major tech companies like Tesla, Alphabet, Meta, Apple, and Amazon. Investors are awaiting key economic data and the Federal Reserve's upcoming meeting, with expectations of a dovish stance and potential rate cuts. A new seasonality-based investment strategy has been introduced to capitalize on optimal trading periods. Overall, optimism remains despite seasonal challenges.
The cryptocurrency market is experiencing significant volatility ahead of the US elections and the upcoming Federal Open Market Committee (FOMC) meeting, with over $238 million liquidated in 24 hours. Bitcoin and Ethereum have seen price declines, contributing to massive liquidations in the derivatives market. The market anticipates a potential rate cut by the FOMC, which could boost crypto prices. Despite recent price drops, market sentiment remains bullish, as indicated by the Fear and Greed Index, suggesting traders expect further gains.
The Federal Reserve is expected to maintain its benchmark interest rate and quantitative tightening program, but markets will closely watch the forward guidance. The Fed may signal less monetary policy easing due to economic resilience and sticky price pressures, potentially scaling back rate cut expectations. If the Fed shows less willingness to deliver multiple rate cuts, U.S. Treasury yields and the dollar could rise, while stocks and gold may face a bearish correction.
Bitcoin's price surpassed $41,000 as it reacted to US macro data ahead of the Federal Reserve's FOMC meeting. The Producer Price Index (PPI) came in below expectations, indicating declining inflation, while the Consumer Price Index (CPI) did not significantly impact risk assets. Traders are closely watching the Fed's decision on interest rate changes, with expectations of no rate adjustments. Bitcoin's price action remained choppy, with $48,000 identified as a key resistance level. Traders anticipate potential volatility around the $40.5K and $41.4K levels.
The US CPI figures for May, set to be released today, will be a key sticking point for markets to watch out for as continued strengthening in monthly consumer price inflation will eventually translate to more persistent price pressures down the road. The dollar, Treasury yields, and risk assets are all going to be intertwined as we get to the key risk event later today and the connection will stay in place all through the Fed policy decision tomorrow.
Gold and silver prices are slightly higher ahead of a busy U.S. data week next week, including inflation reports and the FOMC meeting. The marketplace is looking ahead to next week’s FOMC meeting of the Federal Reserve, which begins Tuesday and ends Wednesday afternoon with a statement and press conference from Fed Chairman Powell. A majority of the marketplace thinks the Fed will pause in its interest-rate-tightening cycle. The silver bulls have gained the overall near-term technical advantage.
Gold and silver prices surge due to a lower US dollar index and a dip in US Treasury yields. The market is focusing on next week's FOMC meeting of the Federal Reserve, with many market watchers thinking the US central bank will follow the Bank of Canada's recent moves. The Euro zone technically entered a recession in the first quarter, albeit just barely. The Turkish lira hit a new record low against the US dollar, prompting worries of a possible currency contagion.
Gold prices are slightly up and silver is slightly down ahead of key central bank meetings this week. The Federal Reserve's Open Market Committee (FOMC) meeting is expected to raise its main U.S. interest rate by 0.25%, while the European Central Bank is also expected to raise its main interest rate by a quarter-point. The safe-haven gold market may have received a slight bid due to U.S. Treasury Secretary Janet Yellen's warning that the U.S. government could be in default on some of its payments by June 1 if the debt limit is not increased. The gold and silver futures bulls have the firm overall near-term technical advantage.
