The U.S. added over 943,000 jobs in July, according to the Aug. 6 jobs report — a sign that the economy is on its way to recovering from the 2020 shutdowns.
That expected growth sparked a colossal sell-off in gold with some major margin calls over the weekend.
Prices broke below $1,800 an ounce all the way down to $1,677.90 — the lowest prices seen in more than four months.
Meanwhile, these past few sessions were as kind to Bitcoin as they were cruel to gold.
Prices broke over 6.5% Monday and moved above the $45,000 mark for the first time since the crypto collapse in mid-May.
So today, we’re going to drill down into these moves, see how the Bitcoin and gold relationship correlates, and then use that information to figure out how to trade it.
How to Play the Bitcoin and Gold Relationship
And I know there are people out there saying, “Lance, this is crypto we’re talking about. It’s always super volatile.”
Well, this Bitcoin move isn’t some flash-in-the-pan pop chasing out a few short bets.
We saw the 50- and 20-day moving averages cross on Monday as volume picked up for the world’s largest cryptocurrency.
Even better, when we look at the chart, we can see the next major level of overhead resistance is around the $56,000 mark. That’s a potential 20-plus percent move that the coin can trade higher.
Not too bad.
Now while I’m fine with giving Bitcoin credit where it’s due, if you follow along with the Future of Wealth, then you’ll know I’m not really a crypto guy — though I do know a few.
So what I want to do here is use the Bitcoin and gold relationship to do some calculated bottom fishing in the precious metals market.
Normally, I’d look for a play in Barrick Gold Corp. (NYSE: GOLD). But it’s already reported earnings this quarter, so it’s more of a long-term play.
Check out the video below and let’s look at some charts. I’ll break down the Bitcoin and gold relationship more and talk about where we can find some short-term trades.
Don’t forget you can follow me @LanceIppolito on Twitter, Instagram and our YouTube channel for more trading insights and tips. And as always, you can find me right here talking stocks and options trading — and printing money — on WealthPress.com!
P.S. Anyone that follows Future of Wealth probably knows the basics Weekly Blitz Alerts method:
Wait for the Shadow Blitz.
Place a trade before the market closes.
When I was on Wall Street, I found that unusual trades were constantly being placed right before a massive overnight run-up.
But they can happen way faster.