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The brokerage firm NordFX has summarised the trading performance of its clients for June 2024. Additionally, the social trading services PAMM and CopyTrading, as well as the income generated by the company's IB partners, have been evaluated.

- The leader of the month is a trader from South Asia, account No. 1773XXX, with a profit of USD 82,933. This impressive "astronomical" result was achieved through trades in gold (XAU/USD), a favourite instrument among NordFX's most successful traders.
- In second place, with a result of USD 59,135, is another representative from South Asia, account No. 1771XXX, who also achieved success through the "golden" pair XAU/USD.
- A trader from West Asia, account No. 1774XXX, secured third place with earnings of USD 58,653 from gold transactions in June.

In NordFX's passive investment services, the following developments were noted:

- In the PAMM service, several startups caught attention due to their activity. AI Scalping Master High Risk showed a 100% profit in exactly 100 days, and Zenix 786 achieved a 72% profit in 99 days. These results are impressive, but the maximum drawdown for both managers was also significant – 46% and 36%, respectively. Therefore, the "High Risk" note in the name of the first account is not just words but a warning that trading in financial markets is risky. Investors must exercise maximum caution when entrusting money to any manager.

- In CopyTrading, we continue to monitor the performance of the signal yahmat-forex, which recently celebrated its anniversary. Over 372 days, the provider of this signal managed to show a yield of 467% with a maximum drawdown of 47%. Among startups, the signal AA Strategy is notable, with a profit of 299% in just two months, though it also had a drawdown of more than 63%.

When considering subscribing to a signal, besides profit and drawdown, we advise paying attention to the manager's own capital. For example, in the case of AA Strategy, it is only USD 142. Now imagine you subscribe to this signal with the same lot (1:1), but your starting capital is not USD 142 but USD 425, which is three times more. In this case, your drawdown would be only 21% of the deposit, though the profit would also decrease from 299% to approximately 100%. However, doubling your capital in just two months is still quite impressive.

It should be noted here that the purpose of this explanation is not to convince you to subscribe to this particular signal but to remind you of the basic rules of money management and ways to reduce financial risks.

Among NordFX's IB partners, the top three are as follows:
- The first place is held by a partner from West Asia, account No. 1645XXX, who was credited with a reward of USD 34,454 in June;
- In second place is a partner from South Asia, account No. 1565XXX, who received a commission of USD 5,962;
- Completing the top three is another representative from South Asia, account No. 1576XXX, who earned USD 5,429 for the month.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

EUR/USD: The US is Not Very Good, Europe is Not Very Bad


On Friday, June 5, the Dollar Index (DXY) hit a three-week low, while the euro showed its largest weekly gain against the dollar in a year. This was due to the US not performing as well as expected and Europe not faring as poorly.

Disappointing private sector employment statistics from ADP (150K versus the forecasted 163K and previous 157K) and an increase in repeated jobless claims (238K versus 234K) for the ninth consecutive week indicate a cooling labour market. The slowdown in business activity in the service sector, the fastest in four years, and the drop in the ISM Index from 53.8 to 48.8 points, below the threshold of 50.00, suggest that the US economy is not as smooth as the Federal Reserve (Fed) would like.

The FOMC's June meeting minutes mentioned that monetary policy should be ready to respond to economic issues, a sentiment echoed by Fed Chairman Jerome Powell. Consequently, this gloomy macroeconomic data increased the likelihood of a monetary expansion cycle and interest rate cuts in September from 63% to 73%. Derivatives are almost certain that there will be two 25 basis point (bp) cuts in 2024, lowering the rate from 5.50% to 5.00%. This caused US Treasury yields and the DXY to drop, while stock indices and EUR/USD rose. The S&P500 set its 33rd record this year, and EUR/USD reached a high of 1.0842 on July 5.

The euro was also bolstered by the situation in France. The left-wing "New People's Front" (NFP) and the government bloc "Together for the Republic" (Ensemble) joined forces to prevent the right-wing from gaining power, which might end successfully. If the right-wing "National Rally" (RN) does not gain an absolute majority in the new parliament after the second round of elections, there will be no confrontation with the EU or Frexit (analogy with British Brexit).

Polls indicate the right-wing will secure 190 to 250 out of 577 seats, while 289 are needed for an absolute majority. The second round of elections will be held on Sunday, July 7, which might cause gaps in euro pairs on Monday.

Last week, the euro was also supported by the European Central Bank, or rather, by the minutes of its June Governing Council meeting. On one hand, 25 out of 26 Council members voted for a 25 basis point rate cut. However, this decision was made with several caveats concerning still high wage growth rates and the persistence of inflation, which resists and does not want to drop to the target level of 2.0%.

Preliminary June data showed that the CPI decreased only by 0.1% from 2.6% to 2.5%, and the Core CPI remained at 2.9% (y/y), above the consensus forecast of 2.8%. ECB officials fear the CPI might rise due to geopolitical tensions, supply chain disruptions, raw material and energy price increases, and other factors. This almost rules out a rate cut at the ECB Governing Council meeting on July 18 and suggests only one act of monetary expansion in the second half of 2024.

Key US labour market data released at the end of the week on Friday, July 5, could change the dollar's position and the EUR/USD dynamics. According to the Bureau of Labour Statistics (BLS), non-farm payrolls (NFP) increased by 206K in June, lower than May's 218K but above the forecast of 190K. Other data showed the unemployment rate rose from 4.0% to 4.1%, and wage inflation dropped from 4.1% to 3.9% (y/y).

After the publication of this data, EUR/USD ended the week at 1.0839. However, this does not mean it will start the next week at this level. Traders are closely watching the French elections and the political situation related to the November US presidential elections. Biden's interview with ABC News at 00:00 GMT on Saturday, July 6, when markets are closed, could also impact dollar pairs.

As of the evening of July 5, analysts' forecasts for the near future are as follows: 55% predict the pair will rise, 45% foresee a fall. In technical analysis, all trend indicators and oscillators on D1 are in favour of the euro, although a quarter indicate the pair is overbought. The nearest support is in the 10790-10805 zone, followed by 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0565, 1.0495-1.0515, 1.0450, and 1.0370. Resistance zones are at 1.0890-1.0915, 1.0945, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

Notable events in the upcoming week include Jerome Powell's testimony in the US Congress on July 9 and 10, updated CPI data for Germany and the US on Thursday, July 11, and US initial jobless claims. The week will end with Germany's retail sales data and the US Producer Price Index (PPI) and the University of Michigan Consumer Sentiment Index.

GBP/USD: The Pound Gained with the Labour Party

The pound sterling and British stocks rose after the opposition centre-left Labour Party secured a convincing victory in the parliamentary elections. The British currency achieved a weekly gain of 1% – the best in the last seven weeks.

According to Reuters, the Labour Party won 337 out of 650 seats, indicating a majority in the House of Commons. UK Prime Minister Rishi Sunak conceded defeat and congratulated his opponents on their victory. In turn, Labour Party leader and Prime Minister-elect Keir Starmer declared that from today "we are embarking on a mission of national renewal and starting to rebuild our country." Starmer will replace Sunak as Prime Minister, ending 14 years of Conservative rule.

The markets responded positively to the national election results. The pound became the only component of the DXY to strengthen (by 0.2%) this year. "Apart from the weakening of the dollar," commented Singapore's DBS Bank, "the markets warmly welcomed the victory of the opposition Labour Party. This will put an end to years of political and economic uncertainty under Conservative leadership following the Brexit referendum in 2016. Labour leader Keir Starmer, while he is alive, has ruled out the possibility of the UK joining three blocs – the EU, the single market, and the customs union. […] However, Labour may seek more favourable trade agreements by aligning with EU rules in specific sectors such as agriculture, food, and chemicals."

"As for monetary policy," continued DBS strategists, "the OIS market assesses a 62.4% probability of the Bank of England (BoE) cutting the rate by 25 basis points to 5.0% at the meeting on August 1." However, DBS believes this will not significantly harm the pound, provided that expectations for a Fed rate cut in September increase.

The final note of the five-day period saw the GBP/USD pair at 1.2814. Specialists from another Singaporean bank, UOB, believe the likelihood of the pound strengthening has increased. They note that a strong resistance level is in the area of last month's high of 1.2860. The median forecast for the near term is as follows: 35% of analysts expect further pound strengthening and pair growth, 50% foresee a decline, and the remaining 15% are neutral. As for technical analysis on D1, 100% of trend indicators are green. Among the oscillators, 90% are green, a third of which are in the overbought zone, and the remaining 10% are neutral grey. In case of further decline, the pair will find support levels and zones at 1.2735-1.2750, 1.2680, 1.2655, 1.2610-1.2625, 1.2540, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. In case of growth, the pair will meet resistance at levels 1.2850-1.2860, followed by 1.2895, 1.2965-1.2995, 1.3040, and 1.3130-1.3140.

Among the events of the coming week, the publication of UK GDP data for May on Thursday, July 11, stands out. The next important event, as previously mentioned, will be the publication of a fresh inflation report in the United Kingdom on July 17.

USD/JPY: Back to 1986

The yen lost over 12% against the dollar this year due to the large interest rate differential between Japan and the US. It continued to lose ground in the first half of the past week, reaching a new 38-year high of 161.94 on Wednesday, July 3, but failed to break above 162.00 due to disappointing US statistics.

Until Friday, Japanese officials largely refrained from discussing possible interventions. According to several experts, they may fear the wrath of the United States following sharp remarks from American authorities regarding recent similar actions. However, on July 5, Finance Minister Shunichi Suzuki once again stated that the authorities would closely monitor the state of the stock and currency markets. A week earlier, he expressed that he was "deeply concerned about excessive and unilateral movements in the forex market" and hoped that "confidence in the Japanese currency remains."

OCBC Bank economists noted that "USD/JPY will follow US Treasury yields and the dollar. A reversal in USD and a Fed rate cut or a BoJ signal to normalize (rate hike or accelerated balance sheet reduction) is needed for a downward reversal, none of which seem to be happening." OCBC concluded that the path of least resistance for USD/JPY might still be upward unless there is intervention. "Intervention, at best, is a tool to slow the yen's depreciation, not to reverse the trend," they added.

The week ended with USD/JPY at 160.78. UOB Group analysts noted that the pair's upward momentum is starting to weaken, but only a break below 160.45 would indicate that the USD will not strengthen further. If the pair breaks above 162.00, the next level to watch is 163.00. OCBC economists see further targets for USD/JPY at 164.00 and 164.90, with support at 160.20, 158.10 (21 DMA), and 156.90 (50 DMA).

Many traders remain cautious, fearing another intervention by Japanese authorities. 65% of analysts expect another intervention and a southward movement of the pair, while the remaining 35% point north. Among trend indicators on D1, only 10% point south, with the rest looking north. Oscillator indicators are 25% red and 75% green.

No significant macroeconomic data is expected for Japan in the upcoming week.

CRYPTOCURRENCIES: Back to February 26

The last five days of June gave investors hope that the black streak was over. But alas! On the first day of July, the bulls' strength waned, and BTC/USD turned south again, easily breaking support around $60,000 and plummeting to a local bottom at $53,543, a level last seen on February 26.

A long time ago, in 1961, the 35th President of the United States, John Fitzgerald Kennedy, uttered a phrase that became famous: "Victory has a thousand fathers, but defeat is an orphan." So, the current victory of the bears over the bulls also has many "fathers," although not a thousand. Several factors influenced the decline of the crypto market.

Firstly, investor disappointment that bitcoin failed to reach a new all-time high (ATH) after the April halving. Due to the halving of their reward, BTC miners were forced to sell a significant amount of their coins to cover operational costs. It was reported that their reserves reached a 14-year low. Downward pressure was also exerted by the German government, which began selling a large amount of bitcoin (about 50,000 BTC) seized by the police from a pirate site in January.

Sales intensified sharply after the announcement on June 24 that creditor payments from the bankrupt crypto exchange Mount Gox (Mt.Gox) would start in early July. These assets had been blocked, and now 20,000 former clients are to receive a total of 162,100 BTC (about $9 billion). According to a K33 study, the anticipation of this event put significant pressure on digital asset prices. Traders assumed that most recipients would be inclined to sell their tokens, given that BTC's price had risen exponentially since 1994. Real panic ensued when test transactions were observed on wallets associated with Mt.Gox.

According to Quinn Thompson, CEO of the crypto hedge fund Lekker Capital, the market has largely accounted for the German government's actions and Mt.Gox creditor payments. Thus, this negative pressure is expected to gradually weaken, as noted by Fundstrat analyst Tom Lee.

Another disappointment was the anticipated launch of Ethereum exchange spot ETFs last week, which did not materialise. The US Securities and Exchange Commission (SEC) rejected the applicants' S-1 form submissions, requesting additional adjustments by July 8. Therefore, approval may occur closer to mid-month or later, if at all. As a result, investors withdrew a record $119 million over the past two weeks, the highest since August 2022, making Ethereum an outsider in the crypto market.

Overall, global cryptocurrency exchange-traded funds recorded a third consecutive week of outflows, losing a total of $1.2 billion in investments. Most of the losses came from US spot Bitcoin ETFs, with about half of the inflows coming from retail investors, who typically lack long-term planning and patience. Many whales also began to take profits due to the absence of positive signals. The stock market also played against digital assets. In the last two months, both the S&P500 and Nasdaq Composite consistently hit record highs, prompting some investors to shift their funds from cryptocurrencies to stocks.

Despite the current gloomy outlook, many experts remain cautiously optimistic about the future. MN Trading founder Michaël van de Poppe believes an upward reversal will occur with the upcoming listing of Ethereum ETFs. Another expert, Ali Martinez, noted that in previous years, when June ended in a downtrend, there was a sharp rise the following month: historically, bitcoin gained an average of 7.42%. However, he believes July may be more challenging than usual due to the shock from Germany's bitcoin sales and Mt.Gox creditor payments.

Santiment analysts observed that both bullish and bearish sentiments in X, Reddit, Telegram, 4Chan, and BitcoinTalk networks are waning, indicating traders' loss of interest in trading. "We interpret this as fear and apathy among the crowd – a potential bottom signal," Santiment noted. "At the same time, there is increased talk about holding cryptocurrencies, which could be a positive sign."

"Bears still control the situation, but bitcoin is heavily oversold," said analyst Willy Woo. He believes markets will correct the oversold condition, but at this stage, it does not indicate fundamental demand growth or guarantee a sustained bullish trend. Woo emphasized that a breakout of the resistance line on the daily bitcoin RSI chart will create a "technical but not fundamental recovery."

According to Blockware Intelligence experts, bitcoin needs to overcome the $65,000 level to develop a rebound. This level corresponds to the acquisition cost for short-term investors. Currently, the digital gold prices have dropped below the total cost of short-term holders for the first time since August 2023. "Last summer, under similar circumstances, the price remained in a sideways trend for another two months before breaking out again," added Blockware Intelligence specialists.

Pratik Kala, a DigitalX analyst, predicts consolidation and low volatility for the crypto market in July. He stated, "Bitcoin is looking for the next major catalyst to move up. It's not visible on the horizon yet, but things will change as the US elections approach." Quinn Thompson from Lekker Capital also believes that the current "overly bearish" sentiments will gradually shift. He sees the US presidential elections as a growth catalyst for the crypto market, along with increased liquidity from the Fed and the launch of spot ETH ETFs. Another reason for growth could be the increased profitability of mining. Thompson predicts bitcoin will reach $100,000 and Ethereum $7,000 by November.

Galaxy Digital founder Mike Novogratz shares Thompson's view, recently forecasting bitcoin will hit $100,000 by the end of 2024. Tom Lee of Fundstrat expects an even higher figure of $150,000.

As of writing this outlook on the evening of Friday, July 5, BTC/USD is trading at $56,400 and ETH/USD at $2,975. The total crypto market capitalization is $2.06 trillion ($2.24 trillion a week ago). The market lost about $625 billion over the last 30 days. The Crypto Fear and Greed Index dropped from 47 to 29 points in 7 days, moving from the Neutral zone to the Fear zone.


NordFX Analytical Group
 

Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

Since ancient times, gold has remained a crucial element of global economies. Its unique properties have made it not only valuable as jewellery but also a reliable means of preserving wealth. Today, this metal constitutes a significant part of both investor portfolios and central bank reserves. This review analyses the dynamics and reasons for changes in the price of gold and presents forecasts from leading banks and experts regarding the XAU/USD pair in the medium- and long-term perspectives.


Gold Price: From Ancient Times to the 20th Century

Ancient Times. Gold mining and usage began in the 4th millennium BC. One of the first civilizations to actively use this metal was ancient Egypt, where it was mined from around 2000 BC. The importance of gold in ancient Egypt is hard to overestimate – it was considered "the flesh of the gods" and used in all aspects of life, from religious ceremonies to burial rites, in making vessels and statuettes, jewellery, and home decor, as well as a means of payment. Gold’s resistance to corrosion made it a symbol of immortality and strength.

Exact data on the value of gold in ancient civilizations is hard to find, but it is known to have been one of the most valuable commodities, used not only for trade but also for wealth storage. For example, in Babylon in 1600 BC, one talent of gold (about 30.3 kg) was worth approximately 10 talents of silver (about 303 kg).

In the late 8th century BC, in Asia Minor, gold was first used as coinage. The first pure gold coins with stamped images are attributed to the Lydian King Croesus. They were of irregular shape and often minted only on one side.

Antiquity. In antiquity, gold continued to play a key role in the economy and culture. The Greeks mined gold in various places, including the region of Troy, where, according to myth, the deposit was a gift from the god Zeus. For the ancient Greeks, gold symbolized purity and nobility and was used to create unique artworks and jewellery.

In classical Athens (5th century BC), one gold drachma was worth about 12 silver drachmas. During the time of Alexander the Great (4th century BC) and the subsequent Hellenistic kingdoms, the gold-to-silver ratio varied but generally stayed within the range of 1:10 to 1:12. (Interestingly, this ratio has now grown to about 1:80). Alexander the Great issued gold staters weighing about 8.6 grams, highly valued coins often used for large international transactions.

Middle Ages. In the Middle Ages, gold remained a vital element of the economy. In the Byzantine Empire, the solidus gold coin, weighing 4.5 grams, was used for international trade. In medieval Europe, gold also played a significant role, especially after the discovery of large gold deposits in Africa. In 1252, the gold florin was introduced in Florence and used throughout Europe. In England, the gold sovereign appeared in 1489.

What could one buy with such a coin? In England in the 11th-12th centuries, a sovereign could purchase a small piece of land about one acre or a part of a farm. In the 13th century, a gold coin could buy several heads of cattle, such as two cows or several sheep.

Gold was also used to acquire weapons or armour. For example, a good quality sword might cost about one coin. One gold coin could also pay for a skilled craftsman’s work for several months. For instance, such money could order the construction or repair of a house. Additionally, it could buy a large amount of food, such as a year's supply of bread for a family.

Modern Times. During the Age of Exploration, gold came to the forefront again. After the discovery of America, Spanish conquistadors brought vast quantities of gold to Europe. In the 17th-18th centuries, gold became the basis for the formation of monetary systems in Europe. By 1800, the price of one troy ounce of gold (31.1 grams) in Britain was about £4.25. Therefore, one troy ounce of this metal could buy a small plot of land in some rural areas or pay rent for housing for 8 months. It could also order the tailoring of four men's suits or pay for elementary school education for several years.

19th Century. The 19th century was marked by the Gold Rush, especially in California and Australia. This led to a significant increase in gold production and, consequently, a relative decrease in its price. In 1870, the price of one troy ounce of gold was about $20. Starting in 1879, the US monetary system was based on the so-called "gold standard," which tied the amount of paper money to the country’s gold reserves, and $20 could always be exchanged for a troy ounce of this precious metal. This price level remained until the early 20th century.

20th Century: $20 – $850 – $250

1934. It had been 55 years since the adoption of the "gold standard" when, during the Great Depression, US President Franklin D. Roosevelt enacted the "Gold Reserve Act." According to this document, private ownership of gold was declared illegal, and all precious metals had to be sold to the US Treasury. A year later, after all the gold had been transferred from private ownership to the state, Roosevelt raised its price by 70% to $35 per troy ounce, allowing him to print the corresponding amount of paper money.

For the next four decades, gold prices remained stable at around $35 until 1971, when another US President, Richard Nixon, decided to abandon the "gold standard" altogether, delinking the dollar from gold. This decision can be considered a turning point in the history of the modern world economy. Gold ceased to be money and began to be traded on the open market at a floating exchange rate. This completely freed the US government’s hands, allowing it to print infinite amounts of fiat currency, and the price of precious metals to grow exponentially.

By the end of 1973, the price of precious metals had already reached $97 per ounce and continued to rise amid economic instability and inflation, reaching $161 in 1975 and $307 in 1979. Just a year later, amid high inflation and political instability (including the Soviet invasion of Afghanistan and the Iranian revolution), XAU/USD reached a record level of $850 .

1982. After reaching this peak, there was a rollback to $376 in 1982, linked to rising interest rates in the US and stabilizing economic conditions. Political and economic changes in the world, such as the end of the Cold War and the development of global financial markets, stabilized the gold market, and until the mid-1990s, XAU/USD traded in the range of $350-$400. By 1999, the price had fallen to $252 per ounce, due to rising stock markets, low inflation, and decreased demand for gold as a safe-haven asset.

First Quarter of the 21st Century: From $280 to $2450

2000s. At the beginning of the 2000s, the price of gold was about $280 per troy ounce. However, it began to rise following the dot-com bubble burst and sharply increased during the global financial crisis, reaching $869 in 2008. This growth was driven by economic instability, falling stock markets, declining confidence in the dollar, and increased demand for gold from investors seeking safe-haven assets. By the end of 2010, the gold price continued to rise, reaching $1421. In September 2011, it reached a record level of $1900 per ounce. This rise was due to the European debt crisis and concerns about global economic instability. However, the dollar began to strengthen, inflation expectations fell, and stock markets rose, leading XAU/USD to turn south, falling to $1060 by the end of 2015.

After this, another reversal occurred, and the pair headed north again. In 2020, the price reached a new record level of $2067. The primary driver here was the COVID-19 pandemic, which prompted massive monetary stimulus measures (QE) by governments and central banks, primarily the US Federal Reserve. The historical maximum to date was reached in May 2024 at $2450, aided by geopolitical instability in the Middle East, Russia’s military invasion of Ukraine, and expectations of interest rate cuts by the Federal Reserve, ECB, and other leading central banks.

Why Gold?

Mid-2024. Before moving on to gold price forecasts, let's answer the question: what exactly makes this yellow metal valuable?

Firstly, note its physical and chemical properties. Gold is chemically inert, resistant to corrosion, and does not rust or tarnish over time, making it an ideal asset for value storage. It has an attractive appearance and lustre that does not fade over time, making it popular for making jewellery and luxury items. It is also relatively rare in the Earth’s crust. Limited availability makes it valuable since demand always exceeds supply.

Next, follow the economic factors, which are perhaps more important in the modern world. Gold is traditionally used as a means of preserving capital. We have already mentioned that in times of economic instability and geopolitical tension, investors often turn to gold to protect their savings from depreciation. Naturally, in such a situation, its price is influenced by the level of inflation and related monetary policies of central banks, including interest rate changes and quantitative easing (QE) or tightening (QT) programmes.

Investors use gold to diversify their portfolios and reduce risks. Gold has high liquidity, allowing it to be quickly and easily converted into cash or goods and services worldwide. This makes it attractive not only for investors but also for central banks, which hold significant gold reserves as part of their international reserves. This helps them maintain national currency stability and serves as a guarantee in case of financial crises. For example, the Federal Reserve holds nearly 70% of its foreign reserves in gold.

Forecasts for the Second Half of 2024 and 2025

Gold price forecasts for the end of 2024 and 2025 vary, but most analysts from leading global banks and agencies agree that its price will rise. UBS strategists predict an increase to $2500 per ounce. J.P. Morgan also targets $2500 in the medium term, provided the Federal Reserve cuts rates and economic instability persists.

Goldman Sachs has revised its forecasts and expects the price to reach $2700 per ounce in 2025. Bank of America economists initially forecasted $2400 for 2024 but also revised their forecast upwards to $3000 by 2025. The primary condition for growth, according to the bank, is the start of active rate cuts by the US Federal Reserve, which will attract investors to gold as a safe-haven asset.

Citi specialists agree with this figure. "The most likely scenario in which an ounce of gold rises to $3000," they write in an analytical note, "besides the Federal Reserve rate cut, is the rapid acceleration of the current but slow trend – the de-dollarization of central banks in developing economies, which will undermine confidence in the US dollar."

Rosenberg Research analysts also mention a figure of $3000. The consulting agency Yardeni Research does not rule out that due to a possible new wave of inflation, XAU/USD could rise to $3500 by the end of next year. The super-bullish forecast was given by TheDailyGold Premium magazine editor Jordan Roy-Byrne. Based on the "Cup and Handle" model, he stated that a breakout is coming, and with it a new cyclical bull market. "The current measured target for gold," writes Roy-Byrne, "is $3000, and its logarithmic target is somewhere between $3745 and $4080."

Forecasts to 2050

Most major banks and financial data providers typically offer only short- and medium-term forecasts. The main reason is that markets can be very volatile, and small changes in supply or demand factors and external events can lead to unexpected price fluctuations, casting doubt on prediction accuracy.

Despite this, there are different scenarios and long-term price forecasts for gold for 2030-50. Economist Charlie Morris, in his work "Rational Case for Gold by 2030," forecasts a price of $7000 per ounce. Another specialist, David Harper, predicted that the price of gold could reach $6800 by 2040. This scenario, according to Harper, describes reasonable growth with a return rate of about 7.2% per year.

Regarding a 25-year horizon, Josep Peñuelas, a research professor at the Centre for Ecological Research in Barcelona, warned that by 2050, the world might run out of key metals, including gold. However, other futurist theories are more optimistic. According to renowned investor and writer Robert Kiyosaki, gold has existed since time immemorial and, being "God’s money," is likely to become the primary form of currency in the future. In his book "Fake," Kiyosaki argues that ultimately, gold, along with bitcoins, could destroy paper currencies and become the foundation of the global financial system.


NordFX Analytical Group
 

Notice: These materials are not investment recommendations or guidelines for working in financial markets and are intended for informational purposes only. Trading in financial markets is risky and can result in a complete loss of deposited funds.

#eurusd #gbpusd #usdjpy #btcusd #ethusd #ltcusd #xrpusd #forex #forex_example #signals #cryptocurrencies #bitcoin #stock_market

EUR/USD: FOMC - Are Surprises Expected on 31 July?

This review will begin somewhat unusually, not from the start, but from the end of the past work week. On the evening of 18 July and the morning of the 19th, system administrators and users encountered non-functional servers and PCs running Windows. These systems began displaying the "blue screen of death" (BSOD) and entered an endless reboot loop. This global Microsoft outage affected many countries, including the USA, the UK, Spain, Germany, Turkey, and Australia. Many users in China also experienced the "blue screens of death." Critical computer systems, including those of emergency services, hospitals, police, airports, railways, broadcasters, internet providers, telecom companies, and other organisations such as banks and exchanges, either ceased functioning or started malfunctioning. Consequently, the situation in financial markets at that moment became almost force majeure.

The cause of the outage was identified as a software update from cybersecurity firm CrowdStrike, which conflicted with a new Windows update released simultaneously. Microsoft stated that they had identified the problem and were taking easing steps. However, the duration of this work remains unclear.

Now let’s move on to the more "traditional" news of the week and discuss the chances of monetary policy easing. On Thursday, 18 July, the European Central Bank (ECB) held a meeting, and the day before, Eurostat published consumer inflation (CPI) data. According to the statistical office's final assessment, annual inflation decreased to 2.5% last month from 2.6%, in line with market expectations. The core indicator, Core CPI, which excludes food and energy, remained at 2.9%. It’s worth noting that it had shown a downward trend for nine months (from August 2023 to April 2024), reaching 2.7%. However, in May, it accelerated to 2.9% and remained at that level in June. Another inflation indicator, the Producer Price Index (PPI), registered at -0.2% month-on-month (forecast -0.1%) and -4.2% year-on-year (forecast -4.1%).

Commenting on these figures, ECB President Christine Lagarde stated that the regulator had made progress on the path to disinflation, as key inflation indicators are "moving in the right direction." However, she indicated that the ECB would not lower rates in July but did not rule out further steps towards monetary policy easing (QE) at the autumn meetings.

Of course, she knew what she was talking about: on the following day, at its meeting, the European Central Bank (ECB) kept the key interest rate unchanged at 4.25%. At the concluding press conference, Madam Lagarde did not say anything new. She pointed out the weakness of the European economy, noting that the risks to economic growth were leaning towards the downside. Regarding persistently high inflation, Ms. Lagarde reiterated that the ECB's decisions remain data-dependent. While she did not signal an imminent easing of monetary policy, she stated that the decision on the rate at the Governing Council meeting on 12 September remains "open."

The risk-averse market atmosphere and Christine Lagarde's dovish and vague comments prevented EUR/USD from continuing its move towards 1.1000, sending it down to the 1.0900 zone. On Friday morning, ECB Governing Council member and President of the Bank of France, François Villeroy de Galhau, stated that uncertainty regarding economic growth had increased compared to a few months ago. He added that the market's expectations regarding the ECB's rate forecast were justified. His colleague on the Governing Council, the head of the Central Bank of Lithuania, Gediminas Simkus, also agreed with the market's prediction of two more 25 basis points (bps) rate cuts by the end of 2024.

Such dovish sentiments from European officials could have exerted significant downward pressure on EUR/USD, but similar rhetoric is also coming from their counterparts across the Atlantic. The next FOMC (Federal Open Market Committee) meeting of the Federal Reserve is scheduled for Wednesday, 31 July. According to economists at Goldman Sachs, amid a sharp drop in U.S. inflation from 4.3% to 2.6%, the steepest decline since 1984, and a surge in unemployment from 3.6% to 4.1%, the regulator could begin gradually lowering the rate at this meeting. However, most FOMC officials, including Fed Chair Jerome Powell, assert that the time for easing monetary policy has not yet arrived and that it is necessary to wait for new data. They suggest that any changes could be discussed in September.

Currently, the probability of a rate cut for the dollar in September stands at 96%, while for the euro, it is slightly lower at 80% (considering the 25 bps cut that occurred in June).

So, if nothing happens on 31 July, the Fed rate will remain at 5.50%. Since the ECB rate is 4.25%, this gives a certain advantage to the American currency. If risk aversion continues to dominate the market, it will create additional pressure on EUR/USD.

The pair ended the past week at 1.0883. As of the evening of 19 July, the analysts' forecast for the near term is as follows: 55% of their votes are for the pair's rise, and 65% for its fall. In technical analysis, 80% of trend indicators still favour the euro, while 15% have switched to the dollar. Among oscillators, 85% are green, with 15% turning neutral. The nearest support for the pair is at the 1.0865 zone, followed by 1.0790-1.0805, 1.0725, 1.0665-1.0680, 1.0600-1.0620, 1.0565, 1.0495-1.0515, 1.0450, and 1.0370. Resistance zones are located around 1.0890-1.0915, 1.0945, 1.0980-1.1010, 1.1050, and 1.1100-1.1140.

In the upcoming week, data on retail sales volumes in Germany will be released on Monday, 22 July. Wednesday, 24 July, can be called PPI Day, as a stream of preliminary data on business activity in various sectors of the economies of Germany, the Eurozone, and the USA will be released. On Thursday, we will learn about the state of the American economy in Q2, with GDP figures for this period becoming available. Additionally, the traditional number of initial jobless claims in the United States will be published on this day. The last working day of the week is expected to be very volatile, as on Friday, 26 July, the USA will release the Core CPI inflation figures, which are a key reference for the Federal Reserve's monetary policy decisions.

GBP/USD: Bank of England – Are Surprises Expected on 1 August?


Our previous review of GBP/USD was titled "Pound Wins with Labour," and indeed, it has. Over the past week, the pair reached a high of 1.3043, rising to levels last seen a year ago in July 2023. In our view, this surge was driven more by political speculations surrounding the opposition's rise to power and the change of government in the UK than by economic indicators. What this reshuffle will actually deliver remains to be seen and assessed. For now, it is merely an opportunity to profit from new Prime Minister Keir Starmer's promises of a "national renewal."

The current macroeconomic statistics for the United Kingdom, published over the past week, did not provide much cause for optimism. Inflation data released on Wednesday, 17 July, was slightly higher than expected. The headline CPI came in at 2.0% year-on-year (market expectations were 1.9%), and the core CPI reached 3.5% (forecast was 3.4%). Although these figures are close to forecasts, they show that UK inflation remains stubborn and is resisting the Bank of England's (BoE) efforts.

On Friday, 19 July, the Office for National Statistics (ONS) published retail sales data for the UK, which also turned out to be disappointing. On a monthly basis, sales fell by -1.2% in June, following a rebound of 2.9% in May. Markets had predicted a decline of only -0.4%. The core retail sales indicator, excluding automotive fuel sales, fell by -1.5% month-on-month, compared to the previous jump of 2.9% and a forecast of -0.5%. The annual volume decreased by -0.2% in June, against a May growth of +1.3%, while the core figure declined by 0.8% year-on-year, compared to +1.2% the previous month.

In light of these data, the British currency began to lose ground, and GBP/USD ended the past week at 1.2912. Specialists at Singapore's UOB Bank believe that "the upward momentum has significantly weakened, and the pair's growth has come to an end." In their opinion, "the pound has likely entered a consolidation phase and will trade between 1.2850 and 1.3020 for some time."

Of course, much will depend on what happens at the BoE meeting on 1 August. The last rate change was a year ago, on 3 August 2023, when it was raised by 25 basis points to 5.25%. Now, according to analysts at Commerzbank, "the next Bank of England decision should be very interesting." They write, "We still lean towards the Bank of England soon making its first rate cut. However, whether this happens in August or September, the key point is that with the persistently high levels of core inflation and inflation in the services sector, a significant rate cut is unlikely. Therefore, in the medium term, the pound sterling should continue to receive good support.".

For now, the median forecast of experts for the near term is as follows: only 20% of analysts expect further strengthening of the pound and a rise in the pair, 60% predict a decline, and the remaining 20% have taken a neutral stance. As for the technical analysis on D1, 75% of trend indicators are green, and 25% are red. Among oscillators, 75% are green, 10% are neutral grey, and only 5% are red.

In the event of further declines, the pair will encounter support levels and zones at 1.2850-1.2860, followed by 1.2780-1.2800, 1.2610-1.2625, 1.2540, 1.2445-1.2465, 1.2405, and 1.2300-1.2330. In the case of a rise, resistance levels are expected at 1.2990-1.3005, followed by 1.3040, 1.3100-1.3140, 1.3265-1.3300, 1.3375, 1.3315, 1.3555-1.3640, and 1.3750.

The release of preliminary business activity (PPI) data for the UK economy on Wednesday, 24 July, stands out among the events of the upcoming week. No other significant macroeconomic data releases are expected in the coming days. The next important event, as previously mentioned, will be the Bank of England meeting on Thursday, 1 August.

continued below...

CryptoNews of the Week


– The rise in cryptocurrency prices is likely to be tactical and is not expected to mark the beginning of a prolonged upward trend, according to JPMorgan. The bank's experts noted that the current price of bitcoin significantly exceeds its mining cost ($43,000) and, compared to gold, appears overvalued relative to the "fair" price adjusted for volatility ($53,000). A significant upward deviation of prices from this latter parameter "limits the potential for long-term growth."
Analysts forecasted positive market dynamics in August, owing to the reduced impact of the sale of coins confiscated by German police and the distribution of coins among clients of Gemini and Mt.Gox. In this case, the price of bitcoin is expected to align with the trend in gold futures, where a recent rise has been observed. Experts also noted that both assets would benefit in the event of Donald Trump's victory in the upcoming U.S. presidential election.

– Bloomberg also reports that bitcoin miners and crypto companies, previously hindered from going public in the U.S., would benefit from a second term of Donald Trump’s presidency. The agency cites Christian Catalini, founder of the Cryptoeconomics Lab at the Massachusetts Institute of Technology, who stated, "Almost everyone in America would benefit if they chose to operate under the new rules once implemented."
In June, Trump met with miners, stating that bitcoin mining should become the "last line of defense against CBDCs." He added that he wants all remaining bitcoin to be "made in the USA."
Following Joe Biden's poor performance in the debates and a failed assassination attempt on Trump, the price of bitcoin rose by 10%, and shares of the two largest public miners, Marathon Digital and Riot Platforms, increased by 30%. Cipher Mining’s shares surged by nearly 50%. For the first time since the crypto market crash in 2022, industry companies are planning initial public offerings. USDC stablecoin issuer Circle filed for an IPO in January with a valuation of $33 billion. Crypto miner Northern Data, which is actively developing AI computing capabilities, is considering a U.S. listing, with a potential valuation of $16 billion. Kraken, the country's second-largest exchange, is also preparing for a stock market listing.

– U.S. President Joe Biden shocked the markets on Sunday, 22 July, when he announced his withdrawal from the presidential race. Some analysts suggested that this move could benefit bitcoin and other crypto assets, while others warned that investors should temper their excitement.
Analyst Josh Gilbert stated that Trump's increased chances of re-election represent "a huge boost for the asset class": "The longer we see Trump leading in the election odds, the more crypto assets will be worth following his victory." Gilbert explained, "It is hard to imagine Kamala Harris or another Democratic candidate overthrowing Trump's lead in the polls just three months before the end of this electoral race," but added, "a lot can happen during this period, so nothing can be ruled out."
Gary Black, managing partner of The Future Fund, shares a similar view. He warned his 433,000 followers on X that a Trump presidency victory is still far from certain. "Those who think that Trump/Vance will secure a decisive victory are getting ahead of themselves," Black wrote.

– Markus Thielen, the founder of 10x Research, suggested that the crypto-friendly Donald Trump might announce at the upcoming Bitcoin-2024 conference that he will make bitcoin a strategic reserve asset for the U.S. government. Currently, the government holds only 212,800 BTC, worth approximately $15 billion, whereas its gold reserves are around $600 billion. If the government were to double its bitcoin holdings, this would be "almost equivalent" to the price impact of the net inflow into bitcoin exchange-traded funds (ETFs) since the beginning of the year.

– U.S. Senator and Republican Party member Cynthia Lummis highlighted that during a recent major system outage at Microsoft, caused by a software update error from CrowdStrike, the bitcoin network remained unaffected, while other industries experienced complete chaos. The bitcoin blockchain and associated cryptocurrency services continued to operate without disruptions. The senator quoted the Latin phrase "Vires in Numeris," meaning "strength in numbers," underscoring that the primary cryptocurrency's network employs complex mathematical algorithms to ensure security and stable operation even in unpredictable technical circumstances.
Senator Lummis recently proposed backing the U.S. dollar with bitcoin to improve the country's financial system. She also voiced opposition to the introduction of a digital dollar, fearing it could compromise citizens' privacy..

– Arthur Hayes, the former CEO of the cryptocurrency exchange BitMEX, warned that voters supporting cryptocurrencies may lose their influence on politicians after the presidential elections in November 2024. He suggested that if a regulatory framework for digital assets is not established before the elections, the newly elected president and their administration are likely to shift focus to other pressing issues. Geopolitics may overshadow discussions about cryptocurrencies, with the president's attention potentially diverted to international conflicts, particularly those involving Iran and Russia.
"The capital required to support laws aimed at developing cryptocurrencies may be redirected to addressing more urgent foreign policy issues. Therefore, regulatory clarity must be achieved now, before the political landscape changes after the elections," Hayes stated.

– At the beginning of the year, Nigel Green, CEO of deVere Group, predicted a rapid rise in bitcoin to $60,000, which proved accurate. He now believes that the demand for the leading cryptocurrency will continue to grow, and its price could reach $100,000 by the end of the year. "Bitcoin is likely the best asset for growth potential by the end of the year," writes the financier. "It is currently priced at $65,000, but many expect it to hit $100,000 by year-end. Is this possible? Certainly, because the number of bitcoins is limited. If demand for BTC increases, the price will go up. Bitcoin is not the same as the U.S. dollar, where the Federal Reserve can simply print more." Green also noted that the possible election of Donald Trump as President of the United States could further benefit bitcoin.

– Analyst and trader RLinda identifies the bullish flag pattern as a key indicator of a potential upward movement for bitcoin. This pattern, observable on both daily and weekly charts, is characterised by a sharp upward movement followed by a consolidation phase. RLinda expects that a breakout from this consolidation could continue the previous uptrend, with a potential target around $90,000.
Support and resistance levels are crucial in this analysis. The key support levels at $59,300 and $63,800 have shown strong buying interest and stability. High trading volumes at these levels reinforce expectations that they will hold during any potential pullbacks.
Critical resistance levels are marked at $67,250 and $71,754. Overcoming these resistance points is necessary for BTC to advance towards higher targets. The all-time high (ATH) at $73,743 is particularly significant, with a successful breakout potentially triggering further bullish momentum.

– Peter Brandt, head of Factor LLC, expressed skepticism that the price of bitcoin will exceed $71,000 and set a new record. He stated, "I try to be as honest as possible when identifying patterns. The current stagnation in the bitcoin market is incorrectly labeled as a flag (it has lasted too long); it actually represents a descending channel. Anything that lasts longer than 4-6 weeks is not a flag," wrote Brandt.
The flag pattern, which some analysts believe has emerged on the BTC/USD chart, is typically a precursor to a bullish rally. However, the descending channel mentioned by the veteran trader suggests a price decline. This pattern is characterised by lower highs and lows, which have been established since bitcoin reached its all-time high in March.
Based on the chart Brandt published, he believes that bitcoin's price will not surpass the resistance line around $71,000. If this scenario plays out, a bearish trend may ensue, potentially driving the price of the digital asset down to $51,000. The descending channel is slightly widening, indicating that price volatility is expected to increase over time.

– Analysts from the cryptocurrency market maker Wintermute predict that Ethereum could rise to a maximum of $4,300 in 2024. They believe that demand for this altcoin will be lower than expected, estimating that investment in these derivatives will range between $3.2 billion and $4.0 billion in the first 12 months following the start of trading. Under this scenario, the ETH price could increase by a maximum of 24% during 2024, reaching approximately $4,300.
In contrast, researchers at ASXN have made a more optimistic forecast. They predict that monthly capital inflows into Ethereum ETFs will range from $800 million to $1.2 billion. This suggests that by the end of the year, at least $6-7 billion will be invested in ETH-based exchange-traded funds, significantly exceeding the figures provided by Wintermute's analysts.

– The pace of Ethereum's potential bull rally will heavily depend on the capital inflow into ETH-ETFs shortly after trading begins. However, the launch of these products has not yet generated significant excitement in the cryptocurrency market, with investors responding cautiously to the event. Experts from QCP Capital reminded that after the launch of similar BTC-ETFs, bitcoin's price initially dropped to $38,000, but then hit historical highs two months later. (Although, it should be noted that the BTC halving may have played a significant role at that time.)
Currently, the options market suggests a potential decline in Ethereum's price in the near term. This expectation is reinforced by news of pressure from the U.S. government and the situation surrounding Mt.Gox. These factors add uncertainty and create additional challenges for ETH's growth. "As a result, ETH's price may remain stagnant or even decline until a new catalyst emerges," QCP Capital analysts suggest.
Experts also caution against underestimating the impact of political factors. As the U.S. elections approach, cryptocurrency market volatility may increase. Statements and actions by key political figures can create new opportunities or threats. Therefore, investors should be prepared for price swings and closely monitor news developments.


Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.

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