Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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What a difference a couple of days can make. The brutal implosion in precious metals at the end of last week swept away trillions of dollars in market cap like it was nothing, as gold lost the better part of $500 per ounce on Friday. The selloff in silver was even more harrowing, with the white metal shedding over 25% on the day, pushing prices down to just $85 from highs of $121 the day prior. Nothing was spared, with platinum, palladium and metals further afield all suffering horrific losses. As painful as the latest leg down has been, the move does not yet appear to be over, with gold and silver opening with huge gaps to the downside this morning and pushing lower still. Gold briefly sank under $4,600 earlier today, meaning the precious metal officially hit a $1,000 drawdown from last week’s record high. Silver meanwhile is in the process of losing $80 per ounce, leaving many traders in utter disbelief at the scale of the reversal.
Post hoc rationalisations for the selloff are only so useful, but arguably the biggest catalyst for last Friday’s change in sentiment was the nomination of Kevin Warsh as the next Federal Reserve Chairman. Warsh served as governor between 2006 and 2011, a period marred by the 2008 financial crisis, and was the youngest ever member of the Federal Reserve board of governors. While the nominee favours lower interest rates, aligning with President Trump’s stance on the matter, Warsh has been vocally critical of quantitative easing in the past, suggesting he may favour a smaller Fed balance sheet. While the nomination has yet to be confirmed, the choice has generally reassured markets, with many seeing Warsh as a “safe pick”. The dollar rebounded strongly following the announcement, pushing the DXY a solid 1% higher, taking much of the wind out of the sails of safe-haven flows.
Things are going from bad to worse in cryptocurrencies. A strengthening dollar adds to the long list of woes for Bitcoin, which unlike gold and silver, has benefitted from absolutely no positive price action since last October. Bitcoin suffered awful losses over the weekend and prices are now down to $75,000 as of this morning, matching lows from April of last year. Any further depreciation will see Bitcoin revisit prices from 2024. Adding insult to injury, the latest move means that Bitcoin is no longer in the global top ten assets. The industry is in dire straits after a series of legal setbacks; sentiment is at an all-time low; long-standing narratives are beginning to crumble and many traders have simply had enough. If there is a silver lining to any of this, White House crypto czar David Sacks will host an event later today, with the aim of bridging the gap between the banks and various crypto interests, including Coinbase. CEO Brian Armstrong is all but solely responsible for scuppering the latest attempt to push the Clarity Act through Congress, citing the bill’s unfair treatment of stablecoin yields. Attempts at mediation will be difficult, especially following some of the clashes between Armstrong and several big bank leaders during Davos, including an encounter with Jamie Dimon, CEO of JPMorgan, who told Armstrong, “you are full of s***”. Needless to say, the meeting does not bode well.
Another busy week lies ahead. On Tuesday morning, the Reserve Bank of Australia may perform a U-turn on recent policy by raising rates on the Aussie dollar, although a rate hike is by no means a done deal. Breaking from global trends, the central bank is undertaking the move following a surprise uptick in inflation, which now lies outside of the RBA’s target band. Wednesday delivers the latest inflation figures in the Eurozone, followed by the ADP employment change in the US. On Thursday, the Bank of England and European Central Bank are expected to maintain rates steady on their respective currencies. Last but not least, the big event of the week arrives on Friday in the form of January non-farm payrolls, which are currently forecast to show 70 thousand new jobs. The earnings calendar remains hot this week, with Palantir (PLTR) reporting on Monday, Advanced Micro Devices (AMD) on Tuesday, Alphabet (GOOG) on Wednesday, and Amazon (AMZN) on Thursday.
Дериватив болон хөшүүрэгтэй бүтээгдэхүүнээр арилжаа хийх нь өндөр эрсдэлтэй бөгөөд таны анхны хөрөнгө оруулалтаас давсан алдагдал хүлээх эрсдэлтэй. Арилжаа хийхээсээ өмнө манай Нөхцөл, болзол (T&C) болон Бүтээгдэхүүний мэдээллийн баримт бичиг (PDS)-ийг уншина уу.
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