Last week we added Polygon (MATIC) to our Ainslie Wealth products. Polygon’s unique features and exciting roadmap make it an opportunity for those looking to diversify their crypto portfolios into some non-top-10 coins. Let’s jump into what the Polygon network does and is attempting to achieve…

There is a sense of growing uncertainty in US equity markets despite, or maybe because of, their hitting all time highs this week amid growing concerns around the Fed’s next move and growth concerns. Last night saw a correction of nearly 1% ostensibly on the back of poor retail sales data joining a host of disappointing economic data potentially signalling weakness ahead. We look at a number of metrics screaming warnings to investors right now and what they say about gold.

The crypto market rallies higher as indications of a Bitcoin on-chain supply squeeze take shape, and Ethereum successfully rolls out EIP1559. After breaking recent highs, the two largest crypto’s look ready to make a run up back to the highs. Let’s jump into some on-chain metrics and have a look at the driving force behind these moves.

There is a growing view by economists that Australia will experience a double dip recession over Q3 and Q4 of this year with the latest from CBA calling for a 2.7% contraction in Q3. A recession is 2 consecutive quarters and with NSW expected to stay in lockdown until mid November as CBA’s base case, and the likelihood of continued but hopefully shorter lockdowns in other states, Q4 seems a real possibility after such a plunge in Q3. The chart below puts that single quarter -2.7% into context with the entire 1990’s recession being -1.7%.

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The World Gold Council just released their latest quarterly Gold Demand Trends for Q2 2021 which saw a continuation of rampant bar and coin investment demand and a return to inflows into ETF’s. The quarter saw 955 tonne of gold consumed. As usual, we summarise across all uses and look at supply too.

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Previous bull markets in gold have seen explosive moves to the upside in both dollar and percentage terms. Since the closing of the Gold Window in 1971, gold has seen two significant bull runs play out: 1971 to 1980 and 1999 to 2011. A number of commentators have argued that the low of US$1040 reached in January 2016 was the bottom of the present long-term bull run.

Over the weekend we saw some good strength return to BTC as it increased off the bottom. Then on Monday, we experienced a textbook short squeeze and the market quickly approached recent highs. Can crypto break out of the recent bear market?

Whilst today we share some excellent insight from Rick Rule, first the important context. Last night saw the 3rd red hot inflation print out of the US in a row. CPI came in nearly double expectations at 0.9% just for June, and Core CPI saw its biggest print in 30 years. The transitory inflation narrative is being severely tested and gold rose on the news. Legendary Rick Rule beautifully describes why.

It has been an impressively quiet week in the crypto markets. Compressed prices alongside low volume indicate that we should see some significant action any day now. The direction this breakout moves will determine what the next few months will look like for BTC, let jump in further…

Graphs and images:

https://www.ainsliebullion.com.au/gold-silver-bullion-news/bitcoin-on-verge-of-breakout-/tabid/88/a/2549/default.aspx