On Monday, gold prices dipped as much as 0.3% to $1,460.30 an ounce, while silver prices dropped 0.5% to $16.91 an ounce around 5:50 am New York time, the Trading Economics website reported. Both commodities reached their all-time highs in 2011, with silver exceeding $49.50 in April of that year and gold touching $1,920 in September.
Crypto markets have also experienced a downward trend during the same period of this year. On Sept. 3, bitcoin core (BTC) was trading for almost $10,700 per coin, according to market data compiled by markets.Bitcoin.com. Since then, the price of the crypto with the largest cap has dropped to a low of below $6,600 on the first day of this week, a negative difference of over $4,000 in less than three months.
Various factors exert influence over the prices of precious metals and cryptocurrencies such as the global economic outlook which has been quite negative throughout the year, convincing investors to seek refuge in alternative stores of value. But in the last couple of months there’s been another factor, the growing weight of which is hard to ignore: China. Developments and news related to the People’s Republic have impacted the crypto space in the past few weeks.
A speech by the Chinese President Xi Jinping last month, who emphasized that his country should gain an edge in blockchain, was received with enthusiasm by crypto investors. Their perception of it as a bullish statement pushed prices up, with bitcoin core crossing the $10,000 mark in the days after Xi’s Politburo address. Then the recent crackdown on crypto platforms showed that the People’s Republic of China isn’t going to embrace decentralized digital currencies. Crypto markets reacted to that news as well, shedding billions last week.
In the case with gold and silver, another China-related development had a depressing effect on their prices. Not that the global economic forecasts have improved significantly, but hopes were raised last week for new negotiations with the Unites States to put an end to the looming trade war between the two powers. The U.S. Department of Commerce revealed it has begun issuing licenses for American companies to supply non-sensitive goods to the Chinese tech giant Huawei.
The news has likely caused the subsequent fall of gold prices. On Wednesday, spot prices declined by 0.15% to $1,469.87 per ounce, having touched a two-week high of $1,478.80 earlier, CNBC reported. “The announcement seems to be the proximate trigger for gold’s stumble,” noted Tai Wong, head of base and precious metals derivatives trading at BMO, as quoted by the channel’s online edition. At the same time, silver lost 0.14% to $17.11 an ounce. Analysts believe that in the coming months the Trump administration will increase pressure on China to reach a new trade deal before the 2020 U.S. presidential election. Beijing, however, may choose to wait for the vote’s results before signing one.
Do you think gold and silver react to China-related news like crypto markets? Share your opinion on the subject in the comments section below.
Images courtesy of Shutterstock, Trading Economics.
The post Gold and Silver Follow Similar Trend to Bitcoin, React to News About China appeared first on Bitcoin News.
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