Could a massive Bitcoin sell-off push gold to new highs this week?
Last week, gold tried to go higher than $ 1,800. And although the attempt was unsuccessful, analysts remain optimistic on the short-term outlook of the prices.
In fact, the main impetus that could trigger a sharp jump are: the recent Bitcoin sell-off and Joe Biden's plan to nearly double tax rates in the US.
On Friday, Bitcoin dipped by more than 9%, experiencing its worst week in nearly two months.
Such a drop could be beneficial for gold, especially since it is losing in the battle for popularity.
Charles Nedoss, senior market strategist at LaSalle Futures, said Bitcoin is one of the reasons why gold was holding back. Some of gold buyers were bitcoin buyers, therefore, if the cryptocurrency stays low, gold could gain more investors, which would accordingly lead to a rise in prices.
Meanwhile, Biden's plan to raise taxes affects stocks, cryptocurrencies and, most importantly, the US dollar, which is inversely related to gold. If the tax structure becomes less favorable for those investors who have a lot of capital, they will find other places to invest their money.
Inflation expectations are also at the peak this year, and it could drive gold up as well.
But strong macro statistics could put pressure on gold this week. $ 1,800 is also a pretty strong level that bulls will have to fight to be able to push prices higher.
