Both the crypto and commodities markets appear to be reacting well in response to US president’s Biden speech after day one of the Ukraine-Russia crisis. The Gold price is now over $1,900 per ounce, green on the day and up 10% from its current 2022 lows of $1,780. Silver is also rallying.
The price of Bitcoin has already retraced what some traders are calling the ‘declaration of war dump’ to $34,200, and is currently trading back above $38,000 after almost tagging $40,000 on its pump in price yesterday.
Some investors are referring to ‘buying the invasion’, speculating that the worst of the panic selling is over and now once the dust settles in the markets, it could be a good time to invest in Gold and Bitcoin in 2022.
Some cryptocurrency exchanges such as eToro and FTX also allow you to invest in Gold without having to buy and own the underlying asset, physical Gold, instead you can just open a long position on Gold with leverage.
FTX has a Tether perpetual futures Gold trading pair XAUT-PERP and similarly eToro supports $GOLD contract for difference (CFD) trading. eToro also listd Gold ETFs, the SPDR Gold ETF (GLD) and the iShares Gold Trust (IAU).
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Was Gold a good investment in 2021?
Gold price chart on FTX
The Gold markets went sideways and slightly down in 2021 – based on its yearly open versus 2022, the price of Gold lost over 4% of its value in 2021.
- 2021 Gold price open – $1,923
- 2022 Gold price open – $1,828
In fact Gold hasn’t moved much in the last ten years, far underperforming the Bitcoin price. Crypto Twitter has lively back and forth debates with investor Peter Schiff, who has always preferred Gold over Bitcoin but is yet to convince many Bitcoin investors to buy Gold.
That may be set to change though based on the large green volume candle for February, already the highest Gold buying volume in months that could signal the start of a bull market for Gold.
Is it a good time to invest in Gold?
The precious metal has historically been seen as a ‘safe haven’ financial asset and hedge against inflation – which hit record levels in 2022 – and major economic and geopolitical disruptions, such as war. It hit a 13-month high in February after Russia attacked military targets in Ukraine.
If the Gold price closes a monthly candle over the $2,000 resistance there would be little resistance left above and it could retest its all-time high which was a brief intraday wick to $2,074 in August 2020.
Above that Gold would enter bullish price discovery and break out of a cup and handle pattern over a decade in the making. Crypto investors asking ‘is Gold a good investment in 2022‘ might be looking to diversify their portfolio and invest in the yellow metal on cryptocurrency exchanges that support Gold trading such as eToro and FTX.
Start of a bull run for Gold in 2022?
Bitcoin, seen as ‘digital Gold’ based on its scarcity and finite supply, could also perform well alongside a Gold bull cycle. It is also green on the day, up 7% in the past 24 hours. Its 2021 return on investment (ROI) was over 50%.
In a Gold price forecast blog on Capital.com, a derivatives platform for BTC, Gold and other commodities trading, a financial adviser at deVere group is quoted:
‘While Gold will clearly remain an established safe-haven asset in times of economic turmoil, it’s clear that younger generations (and increasingly older ones too) are now looking to Bitcoin to serve that purpose in the digital era.’
However it goes onto quote Gold price predictions from ABN Amro, Scotia Bank and World Bank, who are bearish on Gold and metals. Analysts differ in their views of the direction of the Gold price in 2022, seeing it as dependant on central bank policy regarding interest rates hikes.
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