This week, Bloomberg Intelligence Senior Macro Strategist Mike McGlone shared his outlook for March, noting that the “main catalyst” that could push gold above the $2,000-per-ounce range is a recession. McGlone further explained in an update on bitcoin and the Nasdaq that a key ingredient in forcing the US Federal Reserve to change its stance is “a sharp decline in the stock market.”
Mike McGlone Shares March Outlook for Precious Metals and Crypto
Gold and silver prices were lower last week, with gold close to dipping below the $1,800 per ounce range and silver hanging just above the $20 per ounce range. The global cryptocurrency market capitalization today stands at $1.08 trillion, a decrease of about 1.57% from the last day. Earlier this week, Bloomberg Intelligence Senior Macro Strategist mike mcglone shared his March predictions for assets like commodities, precious metals, stocks, and bitcoin. Regarding bitcoin, McGlone questions whether the recent rally was hollow or a lasting recovery.
The Bloomberg analyst noted that “cryptocurrencies have never faced a US recession, Federal Reserve tightening, and bitcoin’s 50-week moving average below 200 weeks.” McGlone detailed that at some point, most risk assets will bottom out, but with the US central bank still in tightening mode, most markets have bounced. “Bitcoin’s 50-week moving average has never crossed below its 200-week level amid Fed tightening, and the crypto has bounced to this line in the sand at around $25,000,” McGlone said. The macro strategist added:
Quick pullbacks are typical of bear markets and if Bitcoin can hold above $25,000, it would signal divergent strength against the central bank.
As for gold, the precious metal has a good chance of hitting $2,000 a piece if the US economy slips into a recession, McGlone opined. “The biggest yield curve economic contraction potential in about 30 years and the Fed still tightening could drive most metals lower and gold higher in 2023,” the strategist wrote. “A US recession is a major catalyst that can push the metal price above $2,000 an ounce.” Also, the chances of a recession seem likely based on the McGlone data.
“Based on the highest three-month to 10-year Treasury curve recession probability in our database since 1992,” the strategist said. “A key factor that may be different this time is the Fed easing that markets were used to until inflation in 2022.” Furthermore, McGlone believes that gold’s jump may not happen until the Fed decides to change the tightening policies. “One of the best performers in 12 months, the precious metal may be sniffing out an eventual Fed pivot due to recession,” McGlone’s March outlook concludes.
Do you think the US economy will fall into a recession, and if so, what impact will that have on the price of gold and other assets like cryptocurrencies? Share your thoughts in the comments section below.
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