Gold Price May Fall Further as Interest Rates Rise, While Bitcoin Forms Inverse Head and Shoulders Pattern

A Kitco analysis by Jonathan Da Silva reviewed the medium-term outlook for gold and Bitcoin. The analyst noted that gold has been in a sideways grind, with its price hovering around $4,000. This level was identified as a potential medium-term bottom in a previous article. However, Da Silva expressed doubt about whether gold's price would return to its all-time high.

The commentary recalled another article from July 8, which highlighted that periods of gold weakness driven by expectations of higher interest rates have historically presented attractive long-term buying opportunities. The current market is indeed experiencing one of these periods, with the 10-year Treasury yield at 5.25%. This has led to a condemning perspective on the long-term viability of fiat currency and gold's role as a store of value.

On the medium term, Da Silva suggested that gold could move further down if it breaches its bottom rising trendline. A weekly chart with easily interpretable trendlines shows this potential scenario. If the trendline is broken, an avalanche of selling would likely occur, pushing gold's price toward $3,600.

Turning to Bitcoin, Da Silva noted his long-standing bias towards the asset, describing it as multi-faceted and including a facet that captures the debasement trade. He highlighted that readers were alerted during the 2023 basing period that a move to new all-time highs was likely, and the same scenario appears to be playing out. Bitcoin seems to be trying to put in a long-term inverse head and shoulders pattern, which participants should closely watch as it develops.