Gold price breaks through 3600 USD to reach a new historical high, Bitcoin hovers around 112,000 USD level with short-term trend still uncertain.

On Monday, gold prices broke through the $3600 per ounce mark for the first time in history, setting a new record. Weak labor data from the U.S. has bolstered market expectations for a rate cut by the Fed next week, thereby boosting gold prices. Meanwhile, Bitcoin prices are struggling above $112,000, with technical analysis indicating that it is facing key support and resistance levels, leaving its short-term trend filled with uncertainty.

Gold Market Analysis: Rate Cut Expectations Drive Gold Prices to New Highs

As of 2:26 PM Eastern Time, spot gold rose 1.3% to $3,634.25 per ounce, reaching an intraday all-time high of $3,646.29. As a hedge against inflation and uncertainty, gold becomes more attractive in a rate-cutting environment, as lower interest rates reduce the opportunity cost of holding non-yielding assets.

Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, stated that gold prices may continue to gain momentum in the short term, moving towards $3,700 to $3,730, and any brief pullback could be seen as a buying opportunity. He added that the ongoing weakness in the labor market and the market's expectations for a Fed rate cut will provide ongoing support for gold.

The employment report released last Friday showed that job growth in the U.S. slowed sharply in August. According to the CME's FedWatch tool, traders currently expect an 88% chance of the Fed cutting rates by 25 basis points at the September meeting, with about a 12% chance of a 50 basis point cut. Additionally, the People's Bank of China has increased its gold holdings for the 10th consecutive month in August, indicating strong purchasing demand from central banks around the world.

Bitcoin Technical Analysis: Facing Key Support and Resistance

(Source: TradingView)

Meanwhile, Bitcoin, known as "digital gold", has not demonstrated the same explosiveness as gold: its price is struggling to recover above the support level of 112,500. The asset is currently consolidating, and if it falls below 110,800, it may start a new decline.

Bitcoin price has initiated a new round of recovery from the 110,000 USD area, successfully breaking through resistance levels at 110,800 USD and 111,200 USD. Although bulls once pushed the price to around 112,600 USD, bears in that area remained active, preventing further increases.

Currently, the trading price of Bitcoin is above $111,000 and the 100-hour simple moving average, and a bullish trend line has formed a support level at $110,800 on the hourly chart.

Resistance Level: The upward resistance level is first around $111,750, with major resistance at $112,550. A breakout above this level could challenge $113,000 or even $114,200, with the final target possibly looking towards $115,000.

Downward Support Level: If Bitcoin fails to break through 112,550 USD, it may begin a new round of decline. The immediate support level is near the trend line at 110,800 USD, with the main support level at 110,000 USD. If it falls below this level, it may drop to 108,800 USD in the short term, while the main support level is at 107,500 USD.

Conclusion

The dual narrative of the current financial market has unfolded before us: traditional safe-haven asset gold and emerging digital asset Bitcoin both show a high sensitivity to macroeconomic data. Gold reached new highs due to expectations of rate cuts from the Fed, highlighting its appeal as a traditional store of value. Meanwhile, Bitcoin is undergoing a technical consolidation in the same macro context, with its short-term trend depending on whether it can overcome key resistance levels. The different performances of these two assets once again prove that while they are both influenced by liquidity expectations, their unique market structures and investor sentiments determine their distinct volatility patterns.