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Gold market collapses: Bitcoin shows strength

The gold price collapsed on Monday morning, adding to the losses over the past week.

On Monday the gold price fell very quickly to its lowest level since March. The price has slipped below $ 1,700 an ounce.

According to TradingView, the price of the precious metal collapsed as low as $ 1,690 an ounce on Monday. Since then, gold has rebounded slightly, at $ 1,742 an ounce as of press time.

The price of gold is down 4 percent in the past seven weeks and has fallen 8.7 percent since its high of over $ 1,900 an ounce in late May. The precious metal has declined 8 percent so far in 2021 and is currently 14.6 percent below its all-time high of August 2020, which was just under $ 2,040.

The trader and chart guru Peter Brandt attributed the slump to a series of liquidations. In addition he said: “It looks to me like a bank / broker that is carrying out a forced liquidation of a speculator with a large amount of leverage.”

He pointed out that the leverage ratio on the Chicago Mercantile Exchange gold markets is about 15 to 1. This suggests that traders with large leverage determine the price of gold.

Analysts of the London trading company City Index also attributed the slump on Monday morning to “stop-loss sales in a very thin market environment”.

However, unemployment rates in the US also contributed to the fall in commodity prices last week. The unemployment rate fell more than expected from 5.9 percent to 5.4 percent, a new low in the pandemic era, according to a report by the Bureau of Labor Statistics (BAS) on Friday. In addition to the job market and economy, the US economy in general continues to recover. City Index concluded:

“The better job market data pushed the US dollar and US bond yields up, which is never a good signal for commodities.”

One Bitcoin (BTC) is currently worth 25 ounces of gold. This puts Bitcoin 28.5 percent below its all-time high compared to gold. At the time, Bitcoin was close to $ 65,000 and was worth 35 ounces of gold. At the beginning of 2021, 1 Bitcoin was worth just 15.5 ounces of gold.

BTC rate in gold ounces:

At press time, BTC is down 2 percent in the past 24 hours, at around $ 43,667, according to CoinGecko, but quickly bounced back to the current $ 45,971.

Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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