Dollar steadies, gold tanks, Bitcoin Fear and Greed Index up to 73 as inflation fears subside

The US dollar held steady on Wednesday after recording its steepest decline in over three weeks in yesterday’s session. On the other hand, gold prices have declined against the backdrop of a cooling investment spree, buoyed by the improving China-US trade relationship. 

In the crypto market, Bitcoin’s Fear and Greed Index is up six points from its value at the end of last week. The largest crypto by market cap has been trading over $100,000 since May 8.

On Tuesday, investors digested weaker-than-expected consumer inflation data that has revived expectations of monetary easing by the Federal Reserve. Signs of thawing trade tensions between the United States and China have added to the markets’ stable outlook.

Gold loses shine, US dollar halts downtrend, Bitcoin over $102,000 

As of 09:30 AM UTC, spot gold had dropped 0.73% to $3,229 per ounce, while US gold futures dipped 0.6% to $3,235. According to market observers, investors began retreating from safe-haven commodities after Washington and Beijing penned a deal on Monday.

Kyle Rodda, a financial market analyst at Capital.com, said that if negotiations continue to progress and trade agreements are finalized, gold prices may drop to as low as $3,200, a support level he advised market participants to watch in the near term.

The US dollar index, which measures the greenback against a basket of six major currencies, remained flat at 100.94 during Asian hours after tumbling 0.8% on Tuesday. The previous session’s drop was the largest single-day slide in over three weeks and followed a 1% surge on Monday, which had lifted the index to a one-month high. 

According to analysts at the Commonwealth Bank of Australia, the dollar could still see more gains in the near term as traders reassess their positions in light of the recent US-China trade deal. They predicted a 2-3% increase in the dollar index over the next few weeks.

Bitcoin also got the better end of the stick after reports of the China-US meeting in Geneva surfaced, crossing the $100,000 mark for the first time since the end of January. According to Alternative.me’s tracker, the Fear and Greed index surged from 31 to 73 in the last 30 days. 

BTC is now changing hands well over $102,000, a 0.3% uptick intraday, and 6.4% upwards of its weekly lows.

Stock markets rebound after trade and inflation concerns ease

Most major stock indices have rebounded over the past six weeks, clawing back losses incurred after US President Donald Trump’s tariff announcement at the start of April. 

The Dow Jones Industrial Average and other US indices returned to positive territory on Wednesday for the month, while European stocks have gone up slightly above levels recorded before Liberation Day.

In an interview on Tuesday, President Trump told reporters that he might engage directly with Chinese President Xi Jinping to “iron out the details” of the trade pact. He also reminded the public about America’s ongoing discussions with India, Japan, and South Korea, though no agreements have been announced.

Data released by the US Department of Labor on Tuesday showed that the consumer price index rose by 0.2% in April, missing economists’ expectations for a 0.3% increase. This followed a 0.1% decline in March, and has led traders to anticipate as much as 53 basis points in interest rate cuts by the Federal Reserve starting in September.

The latest read on producer inflation, via the Producer Price Index (PPI), is expected on Thursday and could help the Federal Reserve change or keep its policies come the FOMC meeting on June 18. 

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