The US housing market was weak and the US inflation rate in October was weaker than expected. Analysts estimate that these economic trends helped push the price of gold up 3.81% against the dollar on November 10, 2022, following the release of the October Consumer Price Index (CPI) by the US Bureau of Labor Statistics.
So far, gold’s market performance in November has outperformed bitcoins.
Bitcoin has seen better days as the main crypto asset lost more than 18% of its value per November 1st. Much of the cryptoasset’s dollar loss can be attributed to the collapse of FTX and the chaotic aftermath that followed.
The ounce of gold, meanwhile, gained 6.12% from its trading price on November 1, 2022. On that day, the spot value of a troy ounce of 999 fine gold was nominally US$1,647.50. Today, the value of an ounce of fine gold (999 thousandths) is approximately $1,748.49.
Analysts and economists attribute part of gold’s success in the past two weeks to falling home sales in the United States. The National Association of Realtors (NAR) reported that on Friday that “sales of existing homes fell 5.9% in October“.
“Sales of existing homes fell for the ninth consecutive month to a seasonally adjusted annual rate of 4.43 million. Sales fell 5.9% from September and 28.4% from the previous year“, the report from NAR details. The NAR survey further attributes the decline in home prices to aggressive rate hikes by the Fed, which has raised the 30-year mortgage rate significantly this year.
Most of gold’s rise began on November 1, 2022, and it rose further after the US Bureau of Labor Statistics released a report on employment trends. The Consumer Price Index (CPI) for October. The fall in the inflation rate saw the price of gold gain 3.81% against the US dollar between November 10 and November 13, 2022.
The report also helped bitcoin to some extent, as the effect of FTX’s collapse on the crypto markets could have been worse if the inflation rate had been higher. BTC’s 1-hour candle following the CPI report rose sharply.
On November 10, the price of an ounce of gold stood at $1,706 per ounce. unit, and on November 13, 2022, it was trading at $1,771 per unit. ounces. Frank Cholly, senior market strategist at RJO Futures, told Kitco News that gold may have risen too quickly and the precious metal is simply taking a break.
“Gold came close to $1,800. And now the market is seeing profit taking. It looks like he’s turning. I’m not ready to be bearish yet. We rest a bit“, explained Mr. Cholly Friday. However, there is a point where Cholly can turn bearish, as RJO Futures’ senior market strategist noted:
If gold closes below $1750, I would start bearish – At $1725 it will be bad for gold.
Just like bitcoin supporters who are betting on the event of the bitcoin halving to strengthen the value of gold, gold supporters are trying to find a solution. Gold miners believe that the price of gold will be much higher over the next eight years. Primexbt.com traders think gold will reach $4,721 per ounce in 2024, and by 2030, traders expect gold to reach $8,732 per ounce. ounces.