JAKARTA - The price of gold in the spot market fell more than 5.3% on Tuesday, October 21 to the level of 4,125 US dollars, simultaneously when Bitcoin actually rose significantly from the level of 107,000 US dollars (Rp1.78 billion) to US$113,000 (Rp1.88 billion).
Responding to this condition, Reku analyst Fahmi Almuttaqin, assessed that the market had speculated that the trend would begin to change ahead of the Fed's potential further interest rate cuts next week, October 29.
He said data from the CME FedWatch Tool showed the possibility of cutting interest rates this month to nearly 99%, confirming the Fed's dovish stance on global economic conditions.
"This makes the current strict liquidity conditions in the investment market improve immediately and provides a positive catalyst for risky instruments, so the narrative of capital rotation from gold to Bitcoin has attracted a lot of attention from crypto traders and investors," said Fahmi.
Given the significant increase in gold prices in recent weeks, the decline in advanced interest rates could lead investors to choose to move their assets to more risky investment hedge instruments such as Bitcoin.
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Fahmi also sees that growing investor concerns about global political and economic turmoil could have a significant impact on market volatility, despite the potential for a bullish forward that is quite open to Bitcoin.
In addition, Fahmi added, the Fed's view regarding economic conditions, which will be presented after next week's FOMC meeting, is also a crucial factor that investors will pay attention to.
"In the current situation where the potential for a bullish/bearish narrative shift is quite open and uncertainty is again increasing regarding the economic situation and global trade policy, the management of an investment portfolio more actively with good diversification for investors or professional traders can potentially provide more optimal performance," he concluded.
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