Gold prices have risen over the past week as gold regained favor with the market. A weaker dollar helped spot gold prices rise to January and February highs. JPMorgan says institutional investors are abandoning cryptocurrency assets for gold, and speculation about the link between gold and bitcoin is quietly heating up.

The minutes of the FOMC meeting released Wednesday local time appeared to slow the flow of money, and the shift in tone hinted at a possible rise in Treasury interest rates. The downward pressure on gold prices may stem from the idea that if the recovery continues at the current rate, talk of balance sheet tightening may be appropriate. The emergence of a smaller balance sheet may precede a rise in interest rates, which could hurt the upward trend of gold prices. However, Federal Reserve Regulatory Vice Chairman Randal K. Quarles said on Wednesday that a premature reaction to rising prices in the economy could be bad for the Fed. Inflation figures released last week rose. This comment is in line with the broader Fed's comments, suggesting that the rise in prices is a temporary phenomenon. However, interest rate market investors have seen an increase in yields across different maturity ranges, while 10-year Treasury yields remain below April highs.

Another comment that deserves the attention of investors in the gold market comes from the mainstream thinking of JPMorgan analysts. They suggest that institutional investors are starting to abandon cryptocurrency assets and switch to gold. The correlation between the two asset prices seems to support this narrative to some extent. As many have mentioned, this may be a fundamental shift, as Bitcoin begins to replace gold as a hedge.

In fact, JPMorgan Chase said earlier this year that such a plan was possible, but it could take years to achieve that goal. Unlike gold, however, cryptocurrency assets still face potential regulatory risks. The risk began earlier this week, when regulators said financial institutions should not use bitcoin for trading. The news could pose a headwind risk to the short-term trend of Bitcoin, while other government regulations around the world are likely to follow.

Overall, there is a mix of bearish factors in the market, but the bulls still have the upper hand, mainly because expectations of the Fed's monetary tightening have cooled, giving gold bulls a respite. From a technical point of view, gold may have a greater correction risk, the range of 1890-1900 will be further resistance to gold prices, but at present MACD still maintains the gold fork, there may be some upside space above, but the space may be limited.

Focus on US manufacturing PMI, during the day. In addition, European manufacturing PMI and euro zone confidence index also need to be paid attention to.

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