Gold and Bitcoin: Critical Clues Heading into Key Economic Data
Original author: Michael Boutros | Source: FXStreet
As financial markets look ahead to another active trading week, gold and bitcoin are in the spotlight. Investors are eyeing upcoming fundamental events that could determine near-term direction for both assets. Gold has staged a notable rebound off multi-week lows, while Bitcoin continues to consolidate near recent highs. Both markets are standing at key technical levels, and traders are watching closely as the macroeconomic backdrop becomes increasingly relevant.
With US inflation data, Federal Reserve commentary, and broader market sentiment all playing influential roles, expectations are mounting for higher volatility in both assets. This article breaks down the current positioning of gold and bitcoin, key trends to monitor, and the potential scenarios going into critical economic releases.
Gold Outlook: Technical Rebound Meets Macro Pressures
Gold has been on a rollercoaster through October and early November. It briefly broke below $1,820 per ounce before recovering sharply to around $1,970. That rebound coincided with rising geopolitical tensions and a pullback in US Treasury yields. Equally important for gold traders has been the US dollar, which showed signs of topping out after a strong summer rally.
However, despite those supportive catalysts, gold has not yet sustained its break higher. The rally lost momentum near a series of key resistance levels, and recent price action has consolidated just beneath that threshold.
Here are some technical and fundamental levels and insights shaping gold’s performance:
• Resistance Cluster: $1,985 – $2,010
– This region encompasses the October highs.
– It also includes the monthly opening range and aligns with the 61.8% Fibonacci retracement of the July to October decline.
– Price action here will determine whether gold extends its rebound or reverts lower.
• Support Levels to Watch:
– $1,930: Near the 38.2% Fibonacci retracement and a short-term trendline.
– $1,900: A psychological level reinforced by recent lows.
– $1,880–$1,870: An area where bulls may attempt a defense if prices tumble below $1,900.
• RSI Momentum Indicator:
– The Relative Strength Index remains in a bullish configuration above 50.
– This indicates upside bias is still valid, although not yet dominant.
From a fundamental perspective, support for gold can be traced to:
• Global risk aversion, especially related to geopolitical tensions.
• Suspicions that the Federal Reserve’s tightening cycle may be nearing an end.
• Moderate selling pressure on the US dollar, which pushes buyers into alternative stores of value like gold.
• Slight cooling in recent CPI data, reigniting interest in inflation hedges.
Potential Bullish Scenario:
If gold breaks above the $2,010 range with conviction, it could target the yearly high near $2,080. That would represent a major breakout and could signal that macro concerns are starting to drive risk appetite into safe havens. Gold typically benefits when Treasury yields drop and rate hike expectations soften.
Potential Bearish Scenario:
A failure to hold above $1,930 or a breach below $1,900 could indicate that the rebound was merely corrective. In that event, the $1,870–$1,880 support area becomes critical. A sharp pullback in response to hotter-than-expected CPI or hawkish Fed commentary could rapidly undermine demand.
Bitcoin at a Key Juncture: Consolidating Before Possible Breakout
Bitcoin has exhibited high-relative-strength since mid-October, rising more than 30% in barely four weeks. The price moved from below $27,000 to above $35,000, where it now consolidates. Unlike other risk-assets, which have lagged in recent weeks, Bitcoin appears to be responding to both risk-on sentiment and crypto-specific catalysts. There is growing optimism surrounding the approval of a spot Bitcoin ETF, which has lent substantial support
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