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Editor’s Picks: Gold Breaks US$2,000, Bitcoin Moves Past US$35,000

Gold broke the US$2,000 per ounce level this week, rising as high as US$2,006.51 on Friday (October 27).

The yellow metal continues to see support from safe-haven demand as the war in the Middle East continues, but experts are also looking forward to the US Federal Reserve’s next meeting, which will run from October 31 to November 1.

CME Group’s (NASDAQ:CME) FedWatch tool shows a high probability that rates will stay unchanged, and the latest Personal Consumption Expenditures (PCE) Price Index data supports that idea — it shows that core prices rose 0.3 percent month-on-month in September, and 3.7 percent year-on-year. Core PCE excludes food and energy costs, and is the Fed’s preferred gauge of inflation.

Looking at where gold may go as the year draws to a close, I heard recently from popular commentator EB Tucker of the Tucker Letter, who outlined where he sees gold going in the next 90 days. Here’s what he had to say:

‘I personally think that the gold price is set to move 10 percent. I think it’s going to US$2,150, maybe up to US$2,200 in the next 90 days. And I think that because what we saw recently was all the indicators that show the same move that we saw in 2018, early 2016 — we saw this huge dip down that didn’t make any sense on high, high volume, and then an immediate (move) back to where it started. And usually when we see that we know that the downside is over’ — EB Tucker, the Tucker Letter

Click here to watch the full interview with Tucker.

Bitcoin briefly passes US$35,000

Gold wasn’t the only safe-haven asset making moves this past week — during the period, popular cryptocurrency Bitcoin spiked to its highest point since 2022, briefly breaking the US$35,000 level.

Bitcoin’s big price jump is being driven by speculation about new demand from exchange-traded funds (ETFs), but there are a couple of different angles to the story. One is a new development in Grayscale Investments’ feud with the US Securities and Exchange Commission (SEC). The digital currency asset management firm sued the SEC in June of last year after the agency denied its request to convert the Grayscale Bitcoin Trust (OTCQX:GBTC) into an exchange-traded fund; then, this past August, the US Court of Appeals for the DC Circuit ruled in Grayscale’s favor.

The latest news is that Grayscale’s victory has been formalized, meaning that the matter has been sent back to the SEC. With Grayscale planning to keep working with the regulatory agency to bring its proposed Bitcoin ETF to life, market participants are optimistic that approvals for the first US spot Bitcoin ETFs are on the horizon.

‘The Grayscale team looks forward to continuing to work constructively with the SEC to convert (the Grayscale Bitcoin Trust) to an ETF. (The trust) is operationally ready, and we intend to move as expeditiously as possible on behalf of our investors’ — Jennifer Rosenthal, Grayscale Investments

In addition to Grayscale, large firms like BlackRock (NYSE:BLK), Fidelity Investments, Invesco and WisdomTree (NYSE:WT) are keen to offer this type of easily accessible cryptocurrency product to their customers.

Another aspect of the Bitcoin ETF story involves documents showing that BlackRock’s proposed Bitcoin ETF was added to a clearing-house eligibility file in August. That has also raised investors’ hopes about US Bitcoin ETF approvals; however, a spokesperson for the clearing house said the move isn’t indicative of any regulatory advancements.

Bitcoin closed Friday at the US$33,870 level.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

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