Macroeconomic Analysis
The appetite for risk in the financial market remains considerable. In the last few months, investors’ ‘risk-on’ outlook continues after the recent announcement of US major companies’ earnings, which exceeded expectations. It was due to this announcement that the US stock market indices jumped to new highs, confirming the bullish trend.
For the time being, it seems that investors are focusing on the possibility that the distribution and supply chain will suffer from the demand witnessed in the whole commodities sector – especially in the energy sector throughout the last few months. At the same time, stagflation risks seem to be ignored or scarcely considered by the markets. Stagflation is characterized by a high inflation rate, slowed economic growth and high unemployment. Despite this, there is still positive momentum in the markets for the moment.
In the next few days, central banks will be back in the spotlight, with the meeting of the European Central Bank (ECB) on Thursday, with the Federal Reserve expected to announce the Federal Open Market Committee (FOMC) two-day meeting on the 2nd-3rd of November.
Bitcoin: A Small Break after the New Record
On a separate note, Bitcoin’s new rally is no small feat. Yesterday, the leading cryptocurrency achieved an all-new historical high, with its price surpassing the former record of $65,000 reached in April 2021 and jumping up to $66,700.
In the last few hours, it lost some ground, with a decline to $63,000, as investors took their gains – selling – after the impressive rally. The market cap of Bitcoin has now reached $1.180 million, while the capitalisation of the entire virtual currency sector is now close to $2.5 bn.
Kinesis Money Gold Analysis
The gold price has managed to jump again, above $1,790, as momentum continues to improve. Although bullion seems to be looking for a clear directionality, the main scenario remains supportive, with the price still floating in a lateral channel between $1,750 and 1,800 dollars per ounce.
A clear break up of the resistance zone at $1,800 could open space for a quick recovery to $1,820-$1,830 where lies the highest level reached by bullion in the last four months. In case of a further breakup, the space for new rallies is relatively broad, as the first key resistance zone is positioned in the region of $1,900 – 1,920.
Kinesis Money Silver Analysis
Since mid-September, silver has topped gold’s performance. This is clearly shown, simply by looking at the gold-silver ratio chart. Indeed, the number of ounces of silver required to buy the equivalent of gold has fallen from around 80 to 73.
After a negative summer, the last few weeks have witnessed that the trend for silver has changed, as the grey metals achieved an increase of 7% in the last month. This was a clear surpass of the 2.5% increase experienced by gold.
Analysing the short term scenario, the silver price has overtaken both the $23.7 and $24 mark, confirming the bullish trend. This will set the tone for elevating silver, in the next few weeks, up to $25 – 25.5.
Carlo Alberto De Casa is Market Analyst for Kinesis Money.
He also writes as a technical analyst for the Italian newspaper La Stampa.
Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a commentator for CNBC Italy. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a book on gold and the gold market, followed by a new updated edition in 2018.
This report is not an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance.
