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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Cryptocurrencies finally showed signs of life yesterday. Bitcoin gained $5,000 on Tuesday to reach $91,000 by the daily close, and is currently pushing higher still as of this morning. Too early to tell if the move is just another relief bounce, but given the atrocious performance in crypto over the past couple of months, traders will be content with what meagre offerings are available. Due to a fundamental change in market conditions, crypto traders do in fact have reason to be cautiously optimistic. The reopening of the United States government has let loose a significant amount of capital that had been previously tied up, increasing available liquidity, to which the crypto markets are highly sensitive. In the same vein, an even bigger shift occurred on Monday, when the Federal Reserve put an end to quantitative tightening, a policy that had been ongoing since June 2022. The Fed is now officially pursuing a strategy of monetary expansion, which it began by injecting $13.5 billion into the banking system this week – one of the biggest liquidity operations since Covid. On top of all that, markets are expecting the Fed to enact an interest rate cut next week, bringing the target rate down to 3.75% from 4% currently. A perfect liquidity storm if there ever was one.
A volatile trading session left silver above $58 per ounce yesterday, meaning the white metal has officially doubled in price since the start of the year. The fundamental reasons for the rise remain unchanged; silver is still in high demand due to supply concerns and is now beginning to thoroughly outpace its golden counterpart. Gold fell back down to $4,200 yesterday, as attentions shifted further up the elemental table. The gold-to-silver ratio is currently at 72, which represents a multi-yearly low not seen since 2021. Silver mining stocks have risen alongside the metal itself, reflecting the fundamental shift in market dynamics.
Risk Warning : Trading derivatives and leveraged products carries a high level of risk.
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