Kinesis Money Macroeconomic Analysis The gold price is typically hedging down whenever the US Dollar is strengthening. Similarly, if the greenback is weakening, there are good chances of seeing bullion rebounding. Long story short: gold has an inverse relationship with the U.S. Dollar. It is not always the case, but from a statistical perspective, gold and dollar are, more often than not, inversely related. Because bullion is priced in the US Dollar, whenever American currency is getting stronger, gold generally starts appearing less convenient for buyers from outside the United States. This is exactly what we have seen yesterday, with the Dollar Index jumping to a 3-week-high, while gold lost $40, more than 2% of its overall value, while silver declined sharply, surpassing 5%. The fall in other currencies (as in the Euro or the British pound examples) was slightly lower, as it was mitigated by the exchange rate. The reason behind the dollar appreciation can be found in the U.S. labour data. Indeed, the U.S. government announced the continuing jobless claims down to 2.67 million (from 2.85 million). On top of this, the Philadelphia Fed Manufacturing Index has risen to 30.7 points, strongly above analysts’ forecast of 18.8. This data is adding pressure on the Federal Reserve, meeting on the 21-22 September to decide next steps of monetary policies. Higher chances of a sooner-than-expected tapering are of course a supportive market driver for the USD. Kinesis Money Gold Analysis Bullion has lost the support zone of $1,790, falling down to $1,750 in a couple of hours. This decline worsened both the technical and graphical pictures, as investors are concerned about the upcoming tapering. Gold price in $/gram - 4h chart from Kinesis Money Exchange Despite this, Friday started in green, with an interesting rebound to $1,765, confirming that the price has found a new support zone at $1,750. In case of further declines, the next support zone is placed at $1,727 – 1,730. The bottom reached in August at $1,676 is still $90 below the current prices. Kinesis Money Silver Analysis The silver decline was even sharper than the gold decline, confirming the weakness observed over the past two months. The precious metal’s price lost over 5% in yesterday’s trading session, falling below $23. After a low in the region of $22.6, silver is now trying to recover to $23. Despite this modest rebound, the majority of technical indicators are still showing some fragility. Despite that, in the medium – long term fundamental basis appears much more solid, both from industry and jewellery. 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.
Our step-by-step guide in buying your first crypto will have you trading in no time. Most of us have heard about buying cryptocurrencies in one form or another. These currencies have been rapidly increasing in popularity over the course of the last decade, with Bitcoin leading the way due to its exponential growth. If you’ve been asking yourself, “how do I buy Bitcoin?” - now is as good a time as any to start investing. 1. Get prepared Before you consider creating an account, it’s good to brush up on a couple of critical points. Cryptocurrency is a digital currency where an independent system maintains transactions, rather than established and centralised financial institutions such as banks or regular exchanges. Decentralised finance (DeFi) is where transactions or trades can take place without the involvement of banks or authorities. The advantage of this is that people have more control over their investments, and the disadvantage is that there is less protection or insurance when things go wrong. Crypto transactions are logged into digital ledgers called Blockchain. Blockchain is highly secure and difficult to gain access to without the required passwords, meaning it's safe from hackers and cyber attacks. This means that Bitcoin, for example, does not have a physical form like standard currencies and were originally unusable for most business transactions. However, more companies like eg. Paypal are starting to accept Bitcoin, providing a promising outlook to those wishing to delve into the market. To buy cryptocurrency, you will need: A cryptocurrency exchange account.Personal identification (for Know Your Customer platforms).A valid payment method.A Crypto wallet.Malware and security software. It’s wise to consider why you want to invest in cryptocurrency over other types of investment and think about your long-term goals in becoming a trader of digital assets. It will also be worth your time learning about the different types of currencies on offer and the mechanics of blockchain technology. That way you’re making a fully informed decision before stepping into the marketplace. 2. Choose your crypto exchange When buying and selling crypto, it’s essential to use a reputable exchange. So making sure you find the right one that’s trusted in the type of investment you’re looking to make is key. Some platforms allow you to withdraw your crypto to your online wallet for extra security. Others allow you to remain anonymous and therefore free from providing personal information. Here at Kinesis, our exchange offers different tier levels of verification, access to various currencies, the ability to view all pairs and current order books, and multi-layer security protection. Stay safe Remember, all your cryptocurrency activity will be online. Therefore it’s crucial to practice safe internet precautions. Ensure you’ve got top of the range security and malware software installed, keep a paper copy of any passwords and store them safely in a safe or a hired storage space. Extra software may seem like an expensive addition to your cryptocurrency investment setup. However, a malware attack that stops your device from operating or leads to stolen data will be a much more costly disaster. Your online transactions should also be protected. Installing VPN software, such as eg. ExpressVPN will encrypt your data, making your online purchases and transactions completely anonymous. 3. Link a valid payment option To buy shares in Bitcoin or other digital currencies, you’ll need a valid payment option linked to your account. To set this up, you may need to provide ID and some personal information. This information can range from a copy of a driving license to your employment history and source of funds depending on your country of trading’s laws and regulations. Once your information is verified, it’s time to link a payment option. It would be wise at this point to check if your bank can accept cryptocurrencies. While most banks accept transfers to Bitcoin and other currencies, others may have limitations in place to protect their customers. 4. Organise your wallet(s) Before you start investing in Bitcoin or other currencies, it is essential to set up your crypto wallet. A crypto wallet is a secure way of storing your cryptocurrency. However, like most things we’ve encountered so far, it’s not as straightforward as your usual day-to-day wallet. Hot wallet A hot wallet is similar to your everyday wallet. This term is used because it enables you to have regular access to your digital currency. Benefits: Quick access.Variety of support for different devices.Straightforward interfaces, easy to use. Cons: If recovery details aren’t stored elsewhere, risk losing online access permanently. Open to security hacks.Damage to a device (mobile phone, for example) means potential loss of access to hot wallet info. Cold wallet A cold wallet would store the money for long periods, similar to holding cash in bank accounts. Benefits: It is secured offline and is therefore protected from online threats like hackers or malware. Stores large amounts of currency for long periods. Cons: No quick or easy access to stored currency.Sometimes not easy to set up.It still could be physically damaged. Hardware wallet Hardware wallets are physical devices such as an external hard drive or USB stick that you can purchase from specialised companies or second hand. The contents can only be opened or restored (in the case of loss, damage, or theft) by your private key. At Kinesis, we recommend taking advantage of our CoolWallet S, which combines top security with convenience alongside 2+1 factor authentication. 5. What cryptocurrency to choose, and when? Kinesis offers access to their gold and silver currencies as well as a selection of popular crypto tokens, such as Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Tether. According to Nextadvisor, Bitcoin has a growing track record of holding and increasing in value over time. Before you make your first purchase, examine the market price, look at trends, and don’t feel pushed into buying anything until you know exactly what you’re doing. Depending on available funds and the type of investment you seek, you may look at how to buy Bitcoin shares or look at how to buy part of a Bitcoin. One whole Bitcoin costs tens of thousands of pounds, but this doesn’t mean you can’t benefit from looking at investing in shares of a Bitcoin (otherwise known as part of the coin itself). Depending on your chosen payment method (debit card, credit card, Paypal), your transaction fees may work out as very expensive. For example, credit card companies generally treat Bitcoin investments as cash advances, so do your research before you buy! Know the risks Again, it’s essential to understand that cryptocurrency is a volatile market that changes every day, with dramatic increases and drops. This market never stops, hence you need to make a habit of checking in on the value of your investment and knowing when best to buy and sell Bitcoin. Kinesis provides a Knowledge Base, video lessons and 24/7 chat support for its users for any concerns or questions you may have throughout your investment journey. Now that you are setting up to invest in your first crypto, why not learn more about the intrinsic value of Bitcoin?
Kinesis Money - Macroeconomic Analysis The U.S. inflation data missed the expectations. Indeed, the core Consumer Price increased by merely 0.1% over the past month, while forecasts were prognosticating a more significant rise of +0.3%. It is clear that these last figures are reducing the pressure on the Federal Reserve for hastened tapering (the process for the reducing liquidity). The Federal Reserve’s Open Market Committee will meet on September 21-22. However, the chances for the announcement of the beginning of the process during this month's meeting decreased significantly. Most investors are now expecting the tapering to be announced during the following summit, at the beginning of November. In other words, the Federal Reserve is expected to be more cautious in scaling back pandemic-era bond purchases, in order to continuously sustain the recovery of the economy. What are the consequences of this on the financial markets? Overall, we have seen a modest impact on the stocks, even if growing chances of the Fed postponing the tapering are a supportive market driver. On the other hand, this is a bearish element for the U.S. Dollar. A sure winner is definitely gold. Indeed a low-interest rate scenario decreases the real cost of holding bullion. Kinesis Money - Gold Analysis U.S. inflation data below expectations has been supportive news for gold. Bullion recovered the $1,800 mark, remaining in the lateral trading range between $1,790 and $1,820. Gold price in $/gram from Kinesis Exchange. In the current scenario, it is difficult finding a clear trend. Indeed, investors are waiting for more clarity from the Fed in regard to the expected tapering. This probably won't be clarified until September's meeting, increasing the chances of keeping bond purchases in the current limbo, awaiting a clearer directionality. A new fall below $1,785-1,790 could be seen as the weakness signal, while a clear surpass of $1,820 could open space for new recoveries. Kinesis Money - Silver Analysis Silver has shown some volatility in the last 48h, with two quick declines to $23.4 and $23.5. The scenario remains weak, but there is good news. Both times, when silver declined, buyers were really active, helping the price to rebound quickly. They are seeing dips as a buying opportunity. Even if there is not yet any clear bullish trend on silver, the bearish pressure seems to be losing strength. A clear surpass of the resistance zone placed at $24 and $24,3 would represent a positive signal for silver. 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.
You have probably heard of buying and selling Bitcoin and other cryptos on peer to peer networks. But do you know what exactly is crypto mining? In simple terms, crypto mining is gathering cryptocurrency through solving cryptographic equations through a computer system. Data blocks are validated, and transactions are added to the blockchain ledger, otherwise known as a public ledger. Still sounds complicated? Want to know how Bitcoin mining actually works? To fully understand the purpose of virtual money mining, we must learn how cryptocurrency is processed through decentralised financial institutions. RELATED: What is ASIC Mining and is it Worth Your Investment? | Kinesis Money Traditional and Decentralised financial markets We are all familiar with traditional financial institutions like for example banks. Banks and brokerage firms have a central authority that maintains an up-to-date ledger. The ledger is regularly verified, logging every transaction passing through the system, including cash transfers and processing cheques. Everything is stored in a centralised public register. Cryptocurrency works differently, with the ethos of its origins wanting more freedom and anonymity away from a central authority. This means the Bitcoin network can connect anyone and send and receive payments without going through a bank. This means that instead of a central authority validating ledger entries, cryptographic equations are used to verify transactions. How to earn money from Bitcoin mining? This is where cryptocurrency miners are needed. Their job is to verify the validity of transactions by performing the cryptographic equations for each transaction. This involves a lot of time and work, as well as computing power - this is the simplified recipe for mining crypto. Miners receive a small amount of Bitcoin (or whatever digital currency they are mining) as a reward. How much you can earn mining Bitcoin depends on your equipment, resources and the amount of work you’re willing to put in. Established cryptocurrencies like Bitcoin use a system they call blockchain. To understand Bitcoin mining, you must be able to understand the different components of a blockchain. RELATED: What is GPU Mining? | Kinesis Money How does crypto mining work? Before you invest in cryptocurrency mining or start mining Bitcoins, it’s a good idea to break everything down from the beginning. A Bitcoin Blockchain consists of: Nodes - Individuals and devices within the blockchain such as your computer and other computers connected to you.Miners - specific nodes who are responsible for validating blocks of transactions by verifying the hashes. Transactions - Exchanges of digital currency between two parties, which starts the mining process. Transactions are added to data blocks that need to be looked over by miner nodes. Hashes - One-way cryptographic (mathematical) equations that allow nodes to validate the cryptocurrency mining transaction. Header data from the previous data block is paired with a nonce and a hash is generated.Nonces - a number only used once that gets added to the hash in each data block of the chain.Consensus algorithm - Blockchain process that allows various notes within a network to come to a consensus when verifying data. The first type of algorithm to note is proof of work, a mechanism, which stops users from double-spending their coins.Blocks - Individual sections of the blockchain that contain completed transaction information. Blocks that have already been confirmed cannot be modified. It is said blockchains generate new blocks roughly every 10 minutes. Blockchain - A collection of blocks listed in chronological order. Of course, there are many different types of cryptocurrency out there, however Bitcoin is an easy one to look at to really understand the mechanics of mining. How to mine cryptocurrency? Currently, there are no laws in the UK, nor in the USA against cryptocurrency mining or learning how to use a Bitcoin miner. In fact, there are various sources available for crypto farm mining. There are a few things to know before you start learning the process behind mining, though. Firstly, if you’ve been wondering how much you can earn with Bitcoin mining, there is a limit of 21 million Bitcoins that can be mined. This figure is set to be reached approximately in 2140 and after this date, there will no longer be any Bitcoin to mine. Secondly, mining Bitcoin is not a free gig. It costs thousands of dollars to mine a single coin (between $7000 - $11000 according to Minerdaily). Moreover, there are a large number of things to consider covering financially, such as electricity costs, purchasing a computer system with optimum processing power, a cryptocurrency mining rig, a Bitcoin mining machine, graphics card or graphics processing units (known as GPUs), and an ASIC application-specific integrated circuit). The better quality of equipment you have, the more Bitcoin you’ll be able to mine. It also may be worth your time making sure you’re on the lowest electricity rate possible, as electricity will be your biggest cost. What you will need: A profitability calculator - This is to ensure the crypto mining will be worth your time financially, calculating your possible earnings against your running costs. Choose your mining hardware - There are various ASIC devices available for you to compare the features and cost and ascertain which is ideal for your mining needs. Join a mining pool company/ community - Sometimes it's better to work in numbers, and mining is no exception. Joining a reputable pool allows you to combine your resources together, for a better chance of finding a lead.Download mining software - You may be able to join a pool that has its own software. Alternatively, GUI mining software offers easier use. Start mining - Now you’re ready to mine! Don’t forget to set up a secure wallet to link to your rig. It is also worth noting that many companies that provide pools, do not accept mining out of “hobby” and you may wish to look at Cloud Mining services that grant you access to a shared processing unit, without needing the hardware yourself. Remember, mining crypto is not for everybody, and you may prefer to buy and trade Bitcoin through the exchange. RELATED: What is an NFT and where can I get one? | Kinesis Money
Kinesis Money - Macroeconomic Analysis The devil is in the details and investors are paying massive attention to all macroeconomic data, trying to interpret the next steps of monetary policies of both the Federal Reserve and the European Central Bank (ECB). Inflation figures, in particular, are probably the most studied, as they hold the potential to be one of the main catalysts for pushing central banks to finally begin the so-called tapering (the process of reducing liquidity in the system). Therefore, this week is offering an interesting series of data releases, including the inflation levels recorded last month in the U.S. and in Europe. Particularly, inflation in the U.S. could be a significant market driver. The Federal Open Market Committees of the Fed (FOMC) will be meeting on the 21-22 September and further inflation rallies could push them to start the tapering procedure. Despite this, there are still good chances that the FOMC will wait at least to the following meeting before announcing the start of the process. Any dovish decision could weaken the U.S. Dollar, while the earlier tapering start may strengthen the greenback. These movements could as well impact gold and silver, typically (but not always) inversely related to the U.S. Dollar and the American interest rates. Kinesis Money - Gold Analysis The U.S Dollar started this week in green. This is probably the main reason that it's moderately pulling gold down, with the bullion price touching the support zone of $1,790 once again. Gold price in $/gram remains steady between $57 and $58. 4h chart from Kinesis Exchange It is now clear that the gold rally has found a solid obstacle with the resistances placed at $1,820 and $1,835. Only a clear surpass of these thresholds could open further space for a new gain. Technically, the main trend is still supportive, but the rebound we have seen over the past few weeks seems to be losing its momentum, as inflation pressure is growing and more investors are expecting the Fed to increase its activity relatively soon. We shouldn’t forget about the risks coming from the Covid-19 Delta variant, which could force central banks to be more cautious with tapering, which could in return lift gold above $1,800 again. Kinesis Money - Silver Analysis The current silver price remains weak, being unable to show any solid signal of recovery and, overall, underperforming gold. Both technical and graphical scenarios in the short term remain dangerous, without showing any significant rebounding impulse. Therefore, silver is traded below $24, looking for new bullish market drivers which are currently not showing up. We should point out that the long term scenario could be much more entertaining, as there are interesting positive fundamental drivers, including the growing demand from the industrial sector. 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.
Global cryptocurrency exchange platform, Coinbase, is facing legal action from the Securities and Exchange Commission (SEC) against their proposed “Lend” programme this week. The US-based platform had been in close communication with Gary Gensler, Chairman of the regulatory body, six months prior to the threat to sue Coinbase was made brutally clear with the presentation of a Wells notice. The confrontational route of a Wells notice is a clear signal from the SEC that enforcement against a recipient is forthcoming - typically utilised against potential violation or breach of securities. SEC initially did not expand on the rationale behind the call against the potential security threat of the ‘Lend’ scheme. However, Gensler has already made a point of branding the crypto-verse as the wild west of finance. Enrolling in Coinbase’s proposed scheme would enable eligible users to earn an annual yield on USD coins lent to eligible borrowers. Furthermore, the company assures that it’s a safe investment guaranteed by Coinbase that enables Lenders to earn a recurring yield. Why the fuss? The regulatory crackdown on crypto from SEC may in fact point to the wider narrative of distrust for the volatility of cryptocurrencies, and most importantly decentralised finance (Defi). What’s interesting in this scenario, was voiced by Coinbase CEO, Brian Armstrong in the Tweet: "How can lending be a security?" Armstrong raises a pertinent question. Anyone who knows anything about finance is no stranger to the principle of lending, but it seems the issue here is the context: who is doing the lending. After all, it is the act of lending money for it to become credit that the current debt-based economic model was built upon. In our current low or negative-yielding environment this single factor may be the tipping point for many individuals on the verge of starting the cryptocurrency investment portfolio. Whether it’s the aftershocks of the Covid-19 pandemic or the unappealing interest rates on cash ISAs, fixed-rate bonds or other saving options, yields come as a desirable option. Usage-based Yields vs. Lend-based Yields One aspect that has noticeably been absent from the discussion of yielding in relation to Coinbase, is that there is in fact an alternative. As the Kinesis yield model is entirely usage-based, users are rewarded the more they collectively participate in the platform - even if that means simply holding their respective gold or silver currencies in our vaulted facilities, free of charge. In comparison with Coinbase, the Kinesis yield model is built upon revenue generation from transaction fees of fully-backed assets existing within its system. This means users can rest assured that a usage-based yield entails a drastically lower level of risk than lending does. With lending, even in the cryptocurrency sphere, the act of borrowing currency still presents wider implications, considering that Coinbase's crypto-backed by the US dollar is no more stable just because it exists in a digitalised format. What’s more, it is no secret that the dollar continues to depreciate in value, losing as much as 97% since the establishment of the Federal Reserve in 1913. At the same time, gold continues to greatly appreciate in value over time, making it the safe haven for investors looking to hedge against inflation. Kinesis offers a sustainable alternative for users, with a stablecoin that is backed with the 1:1 allocation of gold (KAU) or silver (KAG). In our historic Minter’s yield launch, 14,052 grams of gold (KAU) and 1,686 ounces of silver (KAG) were distributed back to minters on the Kinesis Monetary platform. Kinesis is transforming the universal standard we hold for money, in order to create an ethical, fair, and debt-free economy that is accessible for the benefit of all. Start benefitting from the Kinesis Yield System today. CLICK HERE
Kinesis Money - Macroeconomic Analysis The current week has had plenty of market drivers. Particularly, yesterday we had both the European Central bank (ECB) meeting and the weekly US Initial Jobless Claim. During the ECB meeting, Madame Lagarde declared reducing PEPP, the Pandemic Emergency Purchase Programme. She then followed with a careful explanation - in an excellent communication effort - that the ECB is not starting tapering, but is only recalibrating the amount of purchases of bonds. The economy is recovering quickly and the ECB is forecasting the Eurozone will return to pre-pandemic levels at the end of the year. In the US, the jobless claims hit the lowest level since early 2020, achieving a new post-pandemic low. At the same time, the Dow Jones Index declined, losing more than 150 points (-0,43%). This reaction could appear surprising for a non-expert: how can the market fall in response to positive macroeconomic data? The answer is relatively simple. From one side, the U.S. strong data reduced fears of a slow-down of the labour market. Meanwhile, this means that the Federal Reserve could expedite reducing the current accommodative monetary policy. To summarize; investors are once again betting on the starting of the tapering date. Indeed, the Fed should start to reduce the liquidity in the system in the final months of 2021. But when exactly, is still a mystery. Kinesis Money - Gold Analysis The gold price is currently traded just above the psychological threshold of $1,800. Despite yesterday's market movers, gold had a relatively quiet trading session, moving within an under $20 range (less than 1%). Gold price in $/gram - 4h chart - from Kinesis Exchange From a technical perspective, we have seen a decline earlier this week, as the barrier placed at $1,820 – 1,830 curbed gold recovery. Bullion still appears to be placed in the lateral trading range between $1,790 and $1,820. Only a clear surpass of $1,820 first and $1,835 later could open space for new significant rallies, while bullion is experiencing a phase of laterality. Kinesis Money - Silver Analysis Silver seems to be short of energy as the recovery we have seen last week is now losing its strength. Despite today’s rebound, the price of the precious metal is showing a weekly decline of 2%. Investors are still looking for a clear directionality of silver, which seems currently placed in a lateral scenario. In short, the decline seen in August could be over, but we are not yet seeing a clear bullish trend and the price continues to dance between $24 and $25. 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.
Kinesis Gold Analysis Things are changing quickly in financial markets and investors require nerves of steel. After creating a solid bullish set-up, gold experienced its worst day of the entire month, losing over $30. From a technical point of view, it is not a tragedy, but bullion is - once again – back in the lateral channel between $1,790 and $1,820. We should point out that the precious metal has broken down the 200-day moving average (which is currently located at around $1,810). Gold price in $/gram from Kinesis Exchange The recent correction confirmed the importance of the $1,830 – 1,835 area, which is now the key level to surpass for starting a strong bullish movement, whereas a decline below $1,790 would represent a signal of weakness from both a technical and graphical point of view. There are various reasons behind the decline seen earlier this week. Indeed, we have seen a recovery of the greenback, linked to rising yields of the U.S. treasury bonds, with the 10-year bond jumping from 1.32% to 1.37%, before slowing down in the early trading this morning. But there are also some rumours about the possibility of the beginning of tapering from the ECB, which are pressuring the gold price. Indeed, the hawkish pressure from Northern European bankers is growing, as inflation is showing some recovery signals, which are also noticeable in Europe. Despite this, it does not seem too likely that Ms Lagarde will announce any changes in the bond purchases in tomorrow’s meeting. Any hawkish statement from the ECB could push gold below the $1,790 mark, while a dovish ECB could lift up prices, giving new fuel to gold after the recent corrections. Kinesis Silver Analysis Silver recovery stopped sharply earlier this week. The precious metal was not able to surpass the resistance zone of $25 and the price declined to $24,4, following the weakness of gold and the rebound of the U.S. Dollar. From a technical point of view, the positive trend is not compromised for definite, but it is now crucial that silver can hold above the dynamic and static resistance placed at $24.2 – 24,25. Analyzing the gold-silver ratio, we can see that in the last few days silver recovered, pulling down the ratio from 77 to 73.5 and confirming investors' growing interest in the grey metal. 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.
What is gold-backed crypto? In its simplest form, a cryptocurrency backed by gold or silver is the modern evolution of the gold standard: that is, a monetary system where a currency is directly linked to physical precious metal. Coins or tokens issued that follow this system provide token holders with digital assets that have a value directly correlated to the physical assets they represent; gold or silver. To go into more depth, gold or silver-backed crypto regulates its worth by having a direct, stable link with a trusted asset - gold - thus avoiding what many risk-averse experts see as one of crypto’s shortcomings - its lack of intrinsic value, which results in high price volatility. Stablecoins (cryptocurrencies whose value is tied to outside assets) that use these physical assets can therefore enjoy more tangibility and more predictable price swings, compared to their fully digital counterparts. As a result, their price will never drop below the price of a precious metal that backs them, though the value of the token can increase in tandem with the underlying physical asset, providing both stability and the potential for profit. The history of money backed by gold To fully understand the benefits of gold-backed currency, it’s important to understand the idea behind linking currencies to precious metals and how it played out historically. First introduced by the United Kingdom in 1861, fixed-rate gold-backed currency came about to help stabilise an economy that was gradually becoming more and more global. Gold has always been an important resource for central banks and governments to hold, so tying a nation’s currency to its gold reserves was a way of ensuring that trade was always at a surplus. The United States followed suit in 1879, and until 1933 the US dollar was backed by gold. Why did this change? In part, following the First World War and the Great Depression in the 1930s, people began to hoard gold supplies. Governments also realised that it was difficult to aggregate resources based only on their reserves, so the system was changed to the current trust-based system that we see globally today. As a result, currencies were decoupled from gold and silver, and the value began to fluctuate more wildly as it was based on intangible promises, not unlike today’s modern cryptocurrency. Throughout this, gold remained as valuable in the eyes of traders as it always had been. Investors kept investing in gold, and as a more stable option than many global currencies, it’s now a sought-after asset for the astute. Translating the gold standard into the modern day Though the US dropped the gold standard fully in 1971, the idea behind linking money to something that’s truly valuable remains a solid financial strategy. With blockchain technology connecting commerce like never before, it was only a matter of time before cryptocurrency enthusiasts linked this new fintech revolution with a stable, trusted asset. By digitising the timeless value of gold into a spendable currency, Kinesis worked on our blueprint to integrate the stability of precious metals with the convenience of modern finance. This gives holders all the reliable store of value offered by gold, and all the ease of use you expect from a more modern, fluid asset. What is the benefit of currency backed by gold? The benefits of gold-backed crypto are numerous and are largely linked to its stability compared to other options like Bitcoin or the Ethereum blockchain. We’ve listed a few of the most commonly cited benefits below: It’s a stable option As mentioned, a legitimate gold-backed cryptocurrency enjoys a higher level of market stability than its more volatile counterparts. This is because it’s intrinsically linked to the current gold price, which is largely one of the most stable markets around. Historically, everyone wants precious metals, and so a coin linked to those metals is bound to retain its value as long as it’s associated with these materials. It’s easier to understand the market Tied to this stability, the price fluctuations of gold-backed crypto as a whole, are easier to understand. Many of the market variations of Bitcoin and other crypto tokens can seem random, even arbitrary. However, with these stablecoins, you can look at the daily gold market and see trends, changes and predictions that will help to make informed investment decisions. Cryptocurrency is easy to store Unless you have a Swiss vault (or several) to hand, it’s not easy to store large volumes of gold on an individual level. Digitalised gold and silver allows investors to take advantage of its value for trading, investing and spending without worrying about its physical location at all times. This can translate to lower fees for using it as a trading asset, leading to greater convenience and profit. You can access blockchain trading apps By tokenising gold and silver into digital assets, holders can access blockchain trading platforms and all of their associated benefits with a tangible asset value behind them. These platforms offer easy trading, strict security credentials and the transparency of the blockchain as well as their safety regulations. It avoids central bankers and, thus, banks Through the blockchain trading methods mentioned above, investors can transfer value without having to go to a bank. This is beneficial in various ways: it’s faster, it’s more accessible, and it allows you to avoid the fluctuations that can happen when you trade money globally. In short, it’s a good way to beat a bad exchange rate. All that glitters is not gold... The drawbacks of gold-backed crypto There are, however, aspects of some gold-backed crypto that still show room for improvement. Although digitalised precious metals are, by default, superior when compared to fiat or traditional physical bullion assets, in most cases they do not offer anything beyond a combination of what crypto or precious metals are offering already. Lack of yield Traditionally, the lack of yield and therefore limited earning opportunities on the vast majority of gold-backed crypto, result in other assets, like stocks paying dividends, bonds or rental properties, appearing as a more attractive prospect for investors. Nowadays, we can see an increase in the public awareness of the inflationary risks associated with long-term capital holding, which means that investors will look even more consciously for the assets with the highest earnings potential. As negative interest rates have become normalised, people are scouring for a solution that will not require them to – counterintuitively – spend extra money in order to keep their money stored with a bank. Gresham’s Law Another stumbling block is what’s known as Gresham’s law – bad money drives out good money. In practice, this means that people hold onto their gold and silver (good money) and spend paper fiat (bad money), despite their remarkably increased liquidity (and thus, spendability) obtained in the process of digitalisation. Kinesis Yield on digitalised gold and silver Kinesis solves both these problems. By presenting a passive Holder’s yield on digitalised gold and silver, Kinesis allows its users to earn money, simply by holding their assets. The Kinesis Yield system not only takes gold-backed crypto a leap further, but simultaneously stimulates the organic growth of a monetary system in which its users are rewarded for their participation, not penalised. Moreover, a yield on gold and silver, which can be earned by holding, sending or trading, incentivises spending and defeats Gresham’s Law as a consequence. Back to the Gold Standard In the wake of the 50th anniversary of the Bretton Woods Agreement collapse (which ended the role of gold as a unified fixed exchange rate dollar-stabilising mechanism), the necessity of re-visiting the policy of a store of value as a currency price determinant appears more self-evident than ever. This necessity, coupled with global digitalisation, is already enabling us to bring back gold and silver as money, once again. Putting gold on the blockchain, a kind of 21st-century alchemy, transmutes it into a spendable asset, with the potential of broadening its reach across the globe. Society seems to be craving the financial stability that gold-backed currency can unquestionably deliver. As The New Case for Gold book author, Jim Rickards explains, while sharing his insight on what a new Bretton Woods System would look like, the solution is already here. A gold-backed currency, with underlying gold securely stored in a vault and available to spend at the tap of a button, is already available through the Kinesis Monetary System. If you’re convinced by the many benefits of this stablecoin and want to start trading in gold-backed crypto, you should know that it offers more than just a reliable asset. With a rising market cap and surging demand since the beginning of 2020, it’s increasingly looking like the go-to option to combine convenience and stability in the blockchain world.
Kinesis Gold Analysis The tapering will start relatively soon, with the U.S. Central banks most likely to begin reducing the liquidity on the system in the final months of 2021. Despite this, investors’ interest in gold remains at its peak. On Friday, after the release of the U.S. nonfarm payrolls, the bullion price broke up the key resistance level of $1,820, getting closer to the 10-week-high of $1,835. Indeed, U.S. labour data was below expectations, with the immediate decline of the Dollar as a result. Gold price in $/gram from Kinesis Exchange The pressure on Jerome Powell to start tapering could probably slow down for a while, enabling the Federal Reserve to wait until December for the beginning of the process. From a technical point of view, we are still around 12% below the top reached in summer 2020, when bullion surpassed $2,070. however, the scenario continues to improve, opening spaces for a new rebound. The macroeconomic calendar of the next few days has a few interesting appointments, including the meeting of the Reserve Bank of Australia. Investors' main focus will probably be the ECB meeting on Thursday. Interest rates will remain at a historical low. However, after the recent inflation jump - there is a certain pressure from Ms Lagarde to reduce the Pepp stimulus (Pandemic Emergency Purchase Programme), announced last year, initiated to counter the economic crisis generated by Covid-19 and lockdown. Theoretically, any dovish decision could have a positive effect on gold, while hawkish movement could curb the recent rally, even if the main trend still appears positive. We should point out that any dovish decision will also strengthen the US dollar, while any reduction of stimulus can lift up the euro. Therefore the effect on gold of the ECB could be varied and more difficult to forecast. Kinesis Silver Analysis Silver is finally showing muscles, as investors are rediscovering the metal. The price of the precious metal surpassed the key levels of $24 and 24,3, jumping to $24,8. Silver price in $/ounce from Kinesis Exchange From a technical point of view, we are seeing a clear improvement of the picture, as many indicators are now showing a recovery of bullish sentiment. The first level to monitor is the psychological threshold of $25. A clear surpass of this zone could open space for further recoveries to $25.5 first and $25.9 later. 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.