HomeWorld NewsGold price rises: US rate increase in sight?

Gold price rises: US rate increase in sight?

The price of gold is continuing to climb and after having exceeded 1,700 dollars, it seems to be heading firmly towards 1,800 dollars an ounce. This rise will not be without consequences.

Why the price of gold is rising

According to experts, the bullish movement of gold is due to several reasons, first of all the expectation of an interest rate increase by the Fed before the end of the year. Secondly, the price of gold has an inverse correlation with dollar yields, which are falling.

Another aspect that makes gold attractive to investors is the fact that it is considered the ultimate safe-haven asset and therefore appreciates in times of economic uncertainty. 

Euphoria on the stock markets

The rise in interest rates, which seems to be a foregone conclusion due to the worrying inflation in the US, could lead to new record highs for the precious metal.

Alongside gold, stock markets are also rising, driven by Netflix‘s excellent results, thanks above all to the incredible global success of the surprising new Korean series “Squid Game”. In the third quarter, the streaming platform posted a profit of $1.45 billion. Subscriptions grew by 4.4 million.

The S&P and Nasdaq closed their fifth consecutive session higher yesterday, and more important data such as the University of Michigan confidence report and retail sales are expected. These are analyses that often influence both the stock markets and the Fed’s monetary decisions. And could therefore also be reflected in the price of gold and commodities.

Gold price
Gold Price

The first bitcoin ETF

But another piece of news seems to have focused the attention of investors in the US in recent days: the listing of the first Bitcoin ETF by ProShares. Its debut on the NYSE saw the shares of BITO (PROSHARES BITCOIN STRATEGY ETF), rise more than 4.5% to a price of $41.94, while Bitcoin once again reached an all-time high of more than $64,000

What surprised Wall Street traders themselves were the extremely high volumes traded on the first day of trading. Will Hershey, CEO of Roundhill Investments, said in an interview with CNBC that the volumes were exceptional and reached $980 million by the end of the day.

On the other hand, Bitcoin itself is considered by many analysts as the new digital gold, as a store of value and in an anti-inflationary perspective. The new rise in the price of BTC could follow the same dynamics that are driving up the price of gold.

ProShares, which is the eighth-largest company in the ETF market, was the first to get permission to list a Bitcoin ETF on the NYSE. Which does not use BTC as the underlying asset, but rather BTC futures listed by the CME

Vincenzo Cacioppoli
Vincenzo Cacioppoli
Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.