Gold prices are being pressured by the resurgent Bitcoin price ahead of the Fed interest rate decision. The yellow metal is trading at $1,723, which is still 1.70% above last Friday’s low of $1,697.
What happened: Gold has been under intense pressure in the past few months as investors start to refocus on the better-performing cryptocurrencies. Indeed, data shows that there has been some significant outflows from gold ETFs.
Indeed, recent data shows that gold-backed ETFs have declined by 2% in February. This was the third time in four months that gold ETFs have seen outflows. In the same period, investors have piled their cash into cryptocurrencies like Bitcoin.
Today, gold price is struggling after Bitcoin rallied during the weekend. The digital currency surged to $61,000 for the first time. While the price has pulled back slightly, we should expect further gains as the stimulus funds starts arriving.
Gold prices forecast
The daily chart below shows that gold prices have been under intense pressure in the past few days. The price has formed a descending channel that is shown in black. In fact, it is currently slightly above this channel. It has also moved slightly between the 50% and 38.2% Fibonacci retracement levels.
Therefore, in the near term, while the trend remains bearish, there is a possibility that bulls will attempt to retest the upper side of the channel at $1,828. However, a drop below the support at $1,677 should also not be ruled out.
Don’t miss a beat! Follow us on Telegram and Twitter.
Gold price chart
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Crispus on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.