The U.S. housing market showed weakness and October’s U.S. inflation rate was lower than expected. Analysts believe these economic trends helped push gold prices up 3.81% against the greenback on Nov. 10, 2022, after the U.S. Bureau of Labor Statistics released its October Consumer Price Index (CPI).
So far, the gold market’s performance in November has outperformed bitcoin.
Bitcoin has seen better days, as the leading crypto asset lost more than 18 percent of its value in the first of November. Much of the crypto asset’s dollar losses can be attributed to the FTX collapse and the chaotic aftermath that followed.
Gold ounces, meanwhile, were up 6.12% from their trading price on November 1, 2022. On that day, the spot value of a troy ounce of fine 999 gold was a nominal US$1,647.50. Today, the value of an ounce of fine gold (999 thousandths) is approximately $1,748.49.
Analysts and economists attribute some of gold’s success over the past two weeks to the decline in U.S. real estate sales. The National Association of Realtors (NAR) reported on Friday that “existing home sales fell 5.9 percent in October“.
“Existing home sales fell for the ninth consecutive month to a seasonally adjusted annual rate of 4.43 million. Sales fell 5.9 percent from September and 28.4 percent from a year earlier“, the NAR report details. The NAR study further attributes the drop in home prices to the Fed’s aggressive rate hikes that have greatly increased the 30-year borrowing rate this year.
Most of the rise in gold began on November 1, 2022, and it rose again after the U.S. Bureau of Labor Statistics released a report on employment trends. October Consumer Price Index (CPI). The decline in the inflation rate pushed the price of gold up 3.81% against the U.S. dollar between November 10 and November 13, 2022.
The report also helped bitcoin to some extent, as the effect of the FTX collapse on the crypto markets could have been worse if the inflation rate was higher. BTC’s one-hour candlestick, after the CPI report was released, jumped higher.
On November 10, the price of an ounce of gold was holding at $1,706 per unit and on November 13, 2022, it was trading at $1,771 per ounce. Frank Cholly, senior market strategist at RJO Futures, told Kitco News that gold may have climbed too fast and the precious metal is simply taking a breather.
“Gold has approached $1,800. And now the market is seeing profit taking. It looks like it’s turning around. I’m not ready to be bearish yet. We’re taking a little rest“, Cholly explained on Friday. However, there is a point where Cholly could turn bearish, as RJO Futures’ senior market strategist noted:
If gold closes below $1,750, I would start to get bearish – At $1,725, things are looking bad for gold.
Just as bitcoin supporters are betting on the bitcoin halving event to bolster the value of gold, gold supporters are trying to figure out what to do. Gold miners believe that the price of gold will be much higher over the next eight years. Traders at primexbt.com believe that gold will reach $4,721 per ounce by 2024 and by 2030, traders predict that gold will reach $8,732 per ounce.