Crypto markets take a breather as interest rate cycle seems to be peaking

Hola folks!

Hope you are all doing great! This week is going to be a festive week with Diwali falling on the coming Sunday. While we gear up for the festivities, let’s start this week with a short informative read on investments, crypto market movements, and a fun crypto puzzle. 

Read the newsletter to know the difference between a savings account and a fixed deposit or what should you buy if you are looking to invest in physical gold: gold coins, or gold jewelry. We also track BTC’s movements in the past week and introduce you to a book that talks about stock market investments. 

Let’s get started with this week's read!

Can’t make up your mind whether to keep your savings in an FD or a savings account? If this question is bothering you, we have your back. Click on the video below to watch our host explain the difference between an FD and a savings account. Understand the benefits, risks, and factors to consider when choosing between these two popular options.

This is the Diwali week. The festivities will start from Dhanteras. A lot of us buy gold on Dhanteras. Today, we will discuss what is better from a financial perspective - buying gold jewelry or buying gold coins or bars. Read on to learn more about how to make the most of your gold investments.  

However, investing in gold requires some knowledge and research in terms of the form of gold. Should you buy unmoulded gold or should you buy gold jewelry? Are the risks and rewards associated with gold bars, coins, and gold jewelry the same? Which is better as an investment? Let’s discuss this so that you can make an informed decision this Dhanteras. 

Gold jewelry vs gold bars and coins

• Purity

  Most gold coins and bars come with 24 karat, i.e. 995 purity. Some 2-gram gold coins can be either 22k or 24k. Gold jewelry could cost anywhere from 14k-22k.

• Making Charges

  Small-weight gold coins like the 1 gm coin will have a making charge of around 0.5% of the gold price. Higher-weight gold coins will have a much lesser making charge. But the making charges on gold jewellery will be much much higher and will depend on the design of the jewelry. 

• Breaking Charges (charges incurred during melting and making a new design)

  Even when gold coins are converted into jewelry pieces, the breaking charges are lesser than gold jewelry. When gold ornaments are melted to create a new ornament, the breaking charges are more than what is incurred for gold coins. 

• Resale Value

  Due to lesser wastage, breaking and making charges, and highest purity, the resale value of gold coins is higher than gold ornaments. Due to more wastage, breaking and making charges, wear, and tear, and purity, the resale value of ornaments is lesser than gold coins.

• Affordability

  Gold coins can weigh as low as 1 gm or 2 gms, making them more affordable. Gold jewelry has more weight and requires a bigger investment.

Thus from a purely financial perspective, gold bars or coins are a better investment alternative. Therefore, if you looking to buy physical gold as part of your portfolio investment, you should buy pure gold in the form of bars and coins and not gold jewelry. 

Crypto markets saw a rise in price volatility as the week began with a surge in prices driven by the halt in interest rate increases by the US Fed. The UK's central bank followed suit holding interest rates steady and sending all risk-on assets higher, including equities and crypto. 

BTC again led the charge with prices almost touching $36k levels, before seeing a sharp correction back to trading above its anchor level of $34k. Technical analysts predict strong resistance at $36k, which if broken would lead to a surge to $40k levels. ETH too followed a similar gyration in prices and is back trading above its anchor level of $1.8k. Overall, the crypto market cap remains above the $1.3 trillion level for the fourth consecutive week!

The big development from the courtroom was the FTX trial's verdict, where founder SBF was found guilty on all 7 charges of criminal fraud and maybe given a maximum sentence of up to 110 years of jail time! Crypto markets did react negatively to the news resulting in a divergence from other risky assets like equities, which continued to scale amidst the rate hike pause, while crypto prices corrected slightly.

For the broader crypto markets, there was a lot of token-specific activity that saw prices move sharply in both directions. In the large-cap tokens, Solana's SOL continues to be the out-performer, surging more than 20% again last week, after breaking the $30 resistance levels and now anchoring around $40! Popular Render network also announced that they would shift to Solana's protocol in the future, further strengthening its "ETH Competitor" narrative. 

On the flipside, AI-specific tokens faced strong resistance after a not-so-supportive executive order by US President Biden. Other tokens that had a huge run-up in prices in the prior weeks came under selling pressure as investors booked profits in MKR, MINA, and meme coin PEPE.

• BTC $35,121 ⏫ 1.45%

• ETH $1,890 ⏫ 3.69%

• MKR $1,342 ⏬ 5.42%

(All data here is as of 3:15 p.m., 6 November, 2023)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Crypto-focused investment funds enjoyed $326 million of net inflows last week, the largest single-week influx since July 2022, digital asset investment firm CoinShares reported. Read more here. 

• The Swiss National Bank is working on a wholesale central bank digital currency (CBDC) pilot alongside the SIX Digital Exchange and six commercial banks. Read more here. 

Stocks To Riches

Author: Parag Parikh

Stocks to Riches sums up Parik’s experience as a seasoned stock market broker and investor. The book simplifies stock market investing and provides key perspectives for a lay investor venturing into the market. The book aims to help stock investors make prudent investments by following time-tested and proven guidelines. 

Stock to Riches is a must-read for brokers, analysts, and retail investors alike. 

Before you get on with your day, don’t forget to flex those brain muscles with our weekly crypto crossword.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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