Gold Grinds Sideways as Bitcoin Eyes Long-Term Pattern

Kitco analyst Jonathan Da Silva recently reviewed the medium-term outlook for gold and bitcoin, observing that gold has been stuck in a sideways grind. In a July 22 article, Da Silva predicted a medium-term bottom in gold at $4,000, but expressed doubts about whether the price would return to its all-time high. He argued that periods of gold weakness driven by expectations of higher interest rates have historically presented attractive long-term buying opportunities.

The market remains in one of those periods, with the last time 10-year Treasuries yielded 5.25% seeing the gold price below $400 per ounce, which is 10x less than today. This is described as a 'condemning perspective on the long-term viability of fiat currency' and evidence of gold's role as a store of value.

Da Silva suggested that gold could move farther down in the medium term, with a breach of the bottom rising trendline likely triggering an avalanche of selling down toward the 3600 level. On the other hand, he noted that bitcoin seems to be trying to put in a long-term inverse head and shoulders pattern, with participants encouraged to watch closely as it develops and likely engage at any convincing breach of the neckline.