Crypto Nosedives – Gold Steady

Photo by Aleksi Räisä on Unsplash

Bitcoin briefly nose dives 18%, dogecoin tumbles 30% and market stages wipeout as El Salvador makes crypto legal currency

Gold investors seemed to take little notice of a dip in the dollar. Bullion typically gains on a weaker dollar as it makes gold cheaper for those holding other currencies.

Market participants also took stock of data showing fewer Americans filed new claims for jobless benefits last week, despite a new COVID-19 infections surge.

The data comes on the heels of the Jackson Hole annual Economic Policy Symposium, where Fed Chair Jerome Powell said the recovery in the labour market would determine when the central bank starts slowing its asset purchases.

Gold is highly sensitive to any reduction in interest rates, which decreases the opportunity cost of holding non-yielding bullion.

Also

The dollar rose on Tuesday, moving further off a near-one-month low hit last week, as rising U.S. Treasury yields prompted investors to cut short dollar positions against the euro before a European Central Bank meeting this week.

Cryptocurrencies, including Bitcoin, also dropped sharply in volatile trading as several trading platforms said they experienced performance issues.