Bitcoin, gold and dollar react to US election and Fed uncertainty

As the U.S. presidential election looms, financial markets are caught in a storm of uncertainty. Bitcoin, a favorite among crypto enthusiasts, is feeling the pressure as political dynamics shift, while gold and the dollar are also reacting to the latest economic data and Federal Reserve signals.

US election and bitcoin market turbulence

Kamala Harris pulls ahead in polls: With less than three months to the U.S. election, Kamala Harris leads with a 53% chance of winning, as per Real Clear Politics averages.

• Donald Trump’s chances have dropped to 45%, affecting the bitcoin market, where Trump’s pro-crypto promises had previously driven bullish sentiment.

Bitcoin’s volatile response: Bitcoin, which had surged to $70,000 in July amid expectations of Trump-supporting bitcoin production in the U.S., is now struggling. After failing to sustain above $60,000, bitcoin dipped to $56,000 before stabilizing near $58,000.

• The recent downward trend in bitcoin’s price is attributed to Trump’s declining election prospects and technical factors, with resistance at $62,000 and support at $56,000.

Fed uncertainty and gold market reactions

Gold prices fluctuate: Gold has seen its upward momentum slow, with prices holding near $2,453 per ounce after testing $2,480.

• Recent U.S. economic data, including stronger-than-expected retail sales and lower unemployment claims, has reduced the likelihood of a significant Fed rate cut, creating uncertainty in gold markets.

Impact of U.S. economic signals: The U.S. dollar index (DXY) rose from 102.5 to 103, driven by stronger economic data, which also pushed U.S. two-year Treasury yields up from 3.95% to 4.1%.

• These movements have put pressure on gold, with short-term support at $2,435 and resistance at $2,480.

Dollar hits record highs amid shifting financial dynamics

Dollar sets new records: The U.S. dollar reached a record high of ₺33.73 on Aug. 16, 2024, before stabilizing around ₺33.68.

• The rise in the dollar was fueled by a surge in foreign exchange demand and a notable shift from currency-protected savings accounts, with $1.47 billion exiting these accounts and $2.45 billion moving into foreign exchange deposits.

Changes in Turkish financial markets: The Central Bank of the Republic of Türkiye (CBRT) net reserves, excluding swaps, fell by $3.9 billion, signaling ongoing volatility.

• Foreign interest in Turkish bonds remains limited, with recent purchases totaling just $17.6 million.

Looking ahead: Market projections for 2024

• The market outlook remains cautious as investors await the outcome of the U.S. presidential election and the Federal Reserve’s next moves.
• Analysts predict that the dollar could reach ₺36 by the end of 2024, while bitcoin faces critical resistance and support levels that will be closely watched in the coming weeks.