It is no longer news that the COVID-19 pandemic has adversely affected the global economy.
The disease, which has infected almost 4.5 million people globally, has prompted various governments and central banks to come up with various stimulus packages to mitigate its impact.
Gold, which is widely viewed as a hedge against inflation and reduction in the value of currency, seems to be benefiting from the economic stimulus. In times of economic uncertainty, gold is touted as a safe haven for those who are wary of volatile investments such as stocks, as it seems less risky.
The global gold prices grew by $258.55 per ounce in the last 2 months, hitting $1,744.45 per ounce ($56,085.37/kg) on Friday, May 15, 2020. This represents an increase of 17.40% when compared with the $1,485.90 per ounce ($47,772.79/kg) that it sold on March 16, 2020.
Within the 2-month period, it got to its peak, selling at $1,756.70 per ounce ($56,479.22/kg) on April 14, 2020. This is the highest in over 9 years in the international market.
The rise in gold prices has been supported by talks of further stimulus by the United State government, and the worsening US-China relations, just as the investment demand for gold is rising on the back of recessionary pressures and trade war.
American renowned investor, Warren Buffet referred to gold as a way of going on fear, because when people become more afraid, investors make money but when they become less afraid, they lose money. The coronavirus pandemic, which has turned a global health crisis into an economic one, has raised the fear level of investors extremely high.
According to Paul Jackson, Global head of Asset Allocation at Investment group, Invesco, gold over a long period of time tends to hold its value in real terms.
While referring to Warren Buffet’s statement, Jackson pointed out that people’s main reason for investing in gold was for the protection of their investments, as it did not pay a dividend or interest.
Nobody is going to ban Bitcoin – US Bank regulator
Following fears of potential regulation on cryptos, it has been revealed that a ban on Bitcoin and other cryptos is far from the truth.
One of the leading financial regulators in the world’s largest economy, the United States, recently disclosed that the world’s flagship crypto is here to stay, amid rumours coming from different quarters on the likely ban on Bitcoin.
In a report credited to CNBC, Brian Brooks, the Acting Comptroller of the currency, hinted that more regulations on bitcoin and other cryptos are already in the works but downplayed fears that such regulation was going to change the core fundamentals of the crypto market
In a recent interview with Melissa Lee on “Squawk Box,” he disclosed further on “clarity” measure being put in place for cryptocurrency in the next six-to-eight weeks, but said, “nobody’s going to ban bitcoin.”
“We’re very focused on getting this right, on not killing this. And it’s equally important that we develop the networks behind bitcoin and other cryptos, as it is what will prevent money laundering and financing terrorism,” he added.
Fears about potential regulation got strengthened last month when Coinbase CEO, Brian Armstrong, disclosed via his Twitter handle on hearing rumours that the U.S Treasury Department was working to rush out new crypto regulations before President Donald Trump’s tenor ends.
“We heard rumours that the U.S. Treasury and Secretary Mnuchin were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term. I’m concerned that this would have unintended side effects and wanted to share those concerns,” Armstrong said.
Last week we heard rumors that the U.S. Treasury and Secretary Mnuchin were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term. I'm concerned that this would have unintended side effects, and wanted to share those concerns.
— Brian Armstrong (@brian_armstrong) November 25, 2020
However, the top U.S regulator dismissed such fears by saying, “I think you’re going to see a lot of good news for crypto before the end of the term,”
What you should know
- At the time of writing this report Bitcoin traded at $18,999.05 with a daily trading volume of $28,550,005,376. BTC price is down -1.7% in the last 24 hours.
- It has a circulating supply of 19 Million BTC coins and a max supply of 21 Million.
U.S Stocks post record gains across markets spectrum
The Dow DJIA gained 0.8% to close near 30,218 points, while the S&P 500 SPX +0.88% advanced 0.9%, to finish near 3,699 points,
Investors are trooping in large numbers at U.S equity markets as buying pressure escalates at the world’s biggest and most liquid equity market.
What you should know
Major U.S stock benchmarks were all fired up at the last trading session of the week, recording another week of gains for U.S stocks, as global investors looked past a softer-than-expected U.S jobs report.
- The Dow Jones Industrial Average, S&P 500, Nasdaq Composite, and Russell 2000 RUT, +2.37% each ended at an all-time high – the first simultaneous record finishes for the quartet since Jan. 22, 2018.
- The Dow DJIA gained 0.8% to close near 30,218 points, while the S&P 500 SPX +0.88% advanced 0.9%, to finish near 3,699 points, and the Nasdaq Composite COMP surged by 0.7% to 12,464 points.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on the prevailing fundamentals global investors would be gazing at amid the COVID-19 era:
“Investors continue to knock their Yule logs that a pre-holiday Christmas stimulus bill will provide the ultimate holiday stocking stuffer this year, and continue to look on the sunny side of the eventual vaccine rollout.
“But before we can make new gains, there is the usual sentiment tug of war between medium-term optimism and near-term COVID-19 despair.
“I do not know how many times we have been down this road before. Still, all roads lead to prosperity eventually as the post-pandemic market rally has moved seamlessly from policy-driven to mobility-driven to vaccine-driven and should continue so even if some investors are sitting on the fence waiting for a new stimulus deal.”
What to expect
In the near term, leading stock experts are predicting an even stronger 2021 bullish outlook possibly for the U.S Stock markets, coupled with a quick inoculation-driven economic recovery.
$414 million worth of Bitcoin moved by a large entity
A Bitcoin whale has moved 21,846 BTC valued at around $414 million.
Large entities are presently increasing their presence at the world’s most valuable crypto market, as Bitcoin breaches below the $19,000 price level.
What we know: Data obtained from Bitcoin BlockBot, a BTC analytic tracker, revealed that a Bitcoin whale moved 21,846 BTC valued at around $414 million.
Whale alert! 🐋 Someone moved 21,846 BTC ($414M) in block 659,963 https://t.co/K6vN5m8qX0
— Bitcoin Block Bot (@BtcBlockBot) December 4, 2020
At the time of writing this publication, the flagship crypto traded at $18,798.43 with a daily trading volume of $35.3 billion. Bitcoin is down 2.95% in the last 24 hours. It’s presently ranked the most valuable crypto by market value, with a market capitalization of $349 billion.
It has a circulating supply of 18,562,518 BTC coins and a maximum supply of 21,000,000 BTC coins
Why this is happening
Crypto traders and investors are now cashing in on some of their gains, as recent price action reveals the flagship crypto broke the key support level of $19,000 amid record inflows coming from institutional investors.
Recent, data from Glassnode revealed BTC Active Supply 2y-3y (1d MA) just reached a 3-month high of 2,548,131.371 BTC.
- The previous 3-month high of 2,542,341.460 BTC was observed on 04 December 2020.
- The amount of circulating supply last moved between 2 years and 3 years ago.
Previous 3-month high of 2,542,341.460 BTC was observed on 04 December 2020
— glassnode alerts (@glassnodealerts) December 5, 2020
What this means
While it is difficult to predict market movements, large entities have shown historically that they often determine the crypto trend.