This week, Mike McGlone, senior macro strategist at Bloomberg Intelligence, presented his March outlook and noted that the “top catalyst” pushing gold above the $2,000/oz. is a recession, he noted. McGlone further explained in his update on Bitcoin and the NASDAQ that the key ingredient for the Federal Reserve to change its stance is a “sharp decline in the stock market.”
Mike McGlone shares his March outlook for precious metals and cryptocurrencies
Gold and silver prices have fallen in the past week, with gold just below the $1800/oz range and silver clinging just above the $20/oz range. Today’s global cryptocurrency market capitalization stands at $1.08 trillion, down about 1.57% from the previous day. Earlier this week, Bloomberg Intelligence Senior Macro StrategistMike McGlone (19) released his March forecast for commodities, precious metals, stocks, bitcoin, and other assets. On bitcoin, McGlonewonders whether the recent rally isa hollow one or a lasting recovery.
The Bloomberg analyst noted that “cryptos have never faced a U.S. recession, Fed tightening, or bitcoin 50-week moving average below 200 weeks. “McGlone said that at some point, most risk assets will hit bottom, but the U.S. central bank is still in tightening mode, he detailed that most markets are bouncing.” Bitcoin’s 50-week moving average never falls below the 200-week level amid Fed tightening, and the crypto is bouncing to this line in the sand at about $25,000,” McGlone said. The macro strategist added:
A quick snapback is typical of a bear market, and if bitcoin can hold above $25,000, it would signal divergent strength vs. central banks.
As for gold, McGloneopined that the precious metal is likely to reach $2,000 per pieceif the U.S. economy falls into recession. The strategist wrote: “The likelihood of an economic contraction from the yield curve is the largest in nearly 30 years, and the Federal Reserve is still tightening, which could lead most metals lower and gold higher in 2023.” A U.S. recession is the most important catalyst that could push metal prices above $2,000 an ounce.” Moreover, McGlone’s data suggests that a recession is likely.
“Based on the highest probability of recession from the 3-month to 10-year Treasury curve in our database since 1992.” said the strategist.” The key factor that may be different this time is the easing from the Fed that the market was accustomed to until inflation in 2022.” In addition, McGlone believes that the jump in gold may not occur until the Fed decides to pivot to a tighter monetary policy.” McGlone’s March outlook concludes, “Precious metals, one of the best performers on a 12-month basis, may be sniffing out an eventual Fed pivot due to a recession.
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