Mid-Year Review: Monster Movers & Shakers

• Bitcoin ↑ almost 45% in H1

• Gold ↑ 12% year-to-date, but are bulls tired?
  

• US500 party to roll on or hit final hour?
  

The first half of 2024 has been remarkable for global financial markets.

Shifting monetary policy expectations, geopolitical tensions, elections across the globe and the A.I mania set the tone.

At the start of the year, we picked 3 assets that could see big moves.

Here’s how they have performed so far:

  1) Bitcoin set to boom or bust?

• What we discussed in the 2024 outlook

We were bullish on the “OG” crypto and suggested how the “hype could go into overdrive due to the approval of Bitcoin ETFs by January and halving event in April”.

• How things played out in H1

Bitcoin rallied as much as 74% in the first quarter of 2024, hitting an all-time high at $73,850.

The approval of Bitcoin ETFs along with expectations of lower US interest rates sent prices skyrocketing. However, gains were capped in Q2 due to escalating geopolitical tensions and uncertainty over monetary policy despite the halving in April.

As the first half of 2024 concludes, Bitcoin is under pressure thanks to cooling demand for Bitcoin ETFs and developments concerning the failed Mt. Gox exchange.

• What could happen over the next 6 months

Other than US interest rates, the next major risk event for Bitcoin could be the US presidential elections.

And Biden’s opposition, Trump the catalyst. His pro stance towards cryptocurrencies may boost sentiment towards Bitcoin should he triumph.

To be clear, determining what influence Trump will have on the SEC is uncertain – but the idea of a pro-crypto US president may translate to fresh upside gains across the crypto space.

• Technical outlook

Our technical section initially pointed out $50,000 as a key level of interest with a bullish breakout opening a path toward $69,000 and $100,000.

Before

Prices remain trapped within a weekly range with support at $60,000 and resistance at $71,000.

• Sustained weakness below may open a path back towards $50,000 and potentially lower.

• Should $60,000 prove reliable support, prices may rebound towards $71,000 and the all-time high at $73,850.

After

  2) Gold bulls running on fumes?

• What we discussed in the 2024 outlook

We examined how gold could deliver glittering returns this year due to lower interest rates, a weaker dollar, and geopolitical risks.

• How things played out in H1

Despite the slow start to the year, gold prices surged almost 10% in March amid growing bets around lower interest rates. The precious metal was propelled higher by escalating geopolitical tensions and central bank buying, with prices hitting an all-time high at $2450 in May.

But bulls have struggled to keep up the momentum in recent weeks thanks to cooling rate cut bets and the PBoC’s decision to end its 18-month of gold buying.  Still, prices are up roughly 12% year-to-date.

• What could happen over the next 6 months…

While US election uncertainty could translate to increased volatility for gold, it’s all about what actions the Fed takes in the second half of 2024.

At the start of the year, the central bank was expected to cut rates by as much as 150 basis points. However, due to sticky inflation and stronger-than-expected data – traders are only expecting one rate 25 bp cut by November with 75% probability of a second cut by December.

Given how gold pays no interest, the prospect of higher for longer rates could be an invitation for bears to pounce.

• Technical outlook

Our technical section flagged $2000 as a reliable support that may open doors to fresh all-time highs.

Before

Gold is under pressure on the weekly charts with key support at $2290.

• A solid break below this point could spark a selloff towards $2235 and $2147.

• Should $2290 prove to be reliable support, prices may rebound toward $2350, $2425 and $2450.

After

  3) US500 bull party approaching final hour?

• What we discussed in the 2024 outlook

After gaining almost 25% in 2023, we were firmly bullish on the US500 and anticipated volatility due to the US presidential elections in November.

• How things played out in H1

The Index was initially supported by Fed cut bets with solid corporate earnings and the A.I hype turbocharging upside gains. Nvidia, the poster child of the AI boom was able to satisfy investors lofty expectations by posting solid earnings in February and May.

Although the US500 is up 15% year-to-date and remains in an uptrend, the Relative Strength Index (RSI) is screaming that prices are heavily overbought.

• What could happen over the next 6 months…

After repeatedly hitting record highs, the question is whether bulls can maintain their hunger for gains?

A combination of U.S election jitters and cooling expectations around Fed rate cuts could limit upside gains. It is worth noting that earnings season is around the corner with the bar set high for Nvidia and other tech giants to deliver blockbuster results.

Regarding the US elections, whatever the outcome it could inject fresh levels of volatility into the US500.

• Technical outlook

Back in January, we highlighted how “a strong close above 4820 could open the doors towards fresh the all-time highs”

Before

The US500 continues to respect a bullish channel but the RSI signals that a technical “throwback” could be around the corner.

• A solid weekly close above 5500 could pave the way to fresh all-time highs.

• Should 5500 prove to be a tough nut to crack, this may trigger a decline back toward 5300 and possibly lower.

After