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Market News Bitcoin plunges to 49000! Gold retreats from 2-month highs

Bitcoin plunges to 49000! Gold retreats from 2-month highs

Bitcoin could plunge 50% near term — ‘things are very frothy,’ Guggenheim’s Scott Minerd warns; Gold declines amid stronger-than-expected U.S. jobs report.

LEO
2021-04-23
1036

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During the Asian trading session on Friday, the spot gold held steady at around $1784. The spot gold rose 0.15% to $1786.35 per ounce by 11:50(GMT+8).


U.S. 10-year Treasury yield ticked lower on news that Biden will propose a tax hike for high earners to fund about $1 trillion in childcare, universal pre-kindergarten education and paid leave for workers.


The number of Americans filing new claims for unemployment benefits fell to a 13-month low last week.


Gold fell the most in more than a week as better-than-expected U.S. jobs data reduced its appeal as a safe haven.


Applications for state unemployment insurance unexpectedly plunged to a fresh pandemic low as the recovery gathers steam. Initial claims decreased by 39,000 to 547,000 in the week ended April 17, Labor Department data showed Thursday. 


After a record-breaking rally last year, bullion has lost momentum amid the advancing dollar and rising bond yields. Investors remain focused on the economic outlook, with rising bond yields denting demand for non-interest bearing bullion.


Unemployment-insurance claims are “the lowest number we’ve seen since the pandemic,” said Bob Haberkorn, senior market strategist at RJO Futures. “The market wasn’t expecting that.”


Switzerland in March recorded its biggest monthly gold exports in 10 months as shipments to India leaped to their highest since 2013, Swiss customs data showed.


Uzbekistan’s central bank will resume gold sales when it feels the price of the metal is peaking, deputy governor Behzod Khamraev told Reuters.


Still, renewed buying from India and China after a year on the sidelines could provide support for the precious metal going forward. India’s gold imports from Switzerland surged to highest in almost eight years in March as jewelry buyers took advantage of a dip in prices during the ongoing wedding season.


“These latest numbers certainly demonstrate the degree of pent-up demand in the country after the implosion in 2020,” Rhona O’Connell, an analyst at StoneX, wrote in a note.


To be sure, India’s gold-market revival is now “evaporating as a result of the rapid spread of the Covid virus,” she added. India posted the world’s biggest one-day jump in Covid-19 cases on Thursday.


China also boosted shipments from Europe’s premier gold-refining hub. Imports from Switzerland rose nearly fourfold to a seven-month high following the resumption of purchases in February. China’s central bank is approving imports of about 75 tons a month to meet domestic consumption, according to people familiar with the matter.


Global silver demand will rise this year to its highest since 2015, the Silver Institute said in a report on Thursday.


Bitcoin dropped below 49000 on Friday morning, bitcoin fell 3% to $50226.0 by 11:50(GMT+8).


Guggenheim Partners’ Scott Minerd remains long-term bullish on bitcoin, but said Wednesday the world’s largest cryptocurrency has run too far, too fast.


“Given the massive move we’ve had in bitcoin over the short run, things are very frothy, and I think we’re going to have to have a major correction in bitcoin,” the firm’s global chief investment officer told CNBC’s “Worldwide Exchange.”


“I think we could pull back to $20,000 to $30,000 on bitcoin, which would be a 50% decline, but the interesting thing about bitcoin is we’ve seen these kinds of declines before,” Minerd said. However, he said he thinks it’s part of “the normal evolution in what is a longer-term bull market,” with bitcoin prices eventually reaching between $400,000 to $600,000 per unit.


Bill Miller, the longtime value investor who has owned bitcoin for years, told CNBC on Tuesday he’s not concerned about the digital currency being in a bubble like in 2017, when it reached what was then a record high of nearly $20,000. Bitcoin went on to fall sharply in the following months, losing about 80% of its value in what’s become known as the “crypto winter.”


“Supply of bitcoin is growing 2% a year and demand is growing faster. That’s all you really need to know, and that means it’s going higher,” Miller said in an interview on CNBC’s “The Exchange.” It may not be a straight march to the upside, though, because “with bitcoin, volatility is the price you pay for performance,” he added.

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