Michael Razafinjoahany

#GoldMan #Trading #Investissement
Speculative Trading: Definition and Issues

Speculative trading refers to all operations of buying and selling financial securities with the aim of profiting from their price variations over short periods. Unlike traditional investing, which aims for long-term growth, the speculator seeks to exploit rapid market fluctuations. Stocks, currencies, commodities, or cryptocurrencies become playgrounds for these traders.

This practice relies on anticipating market movements, often based on technical analysis, economic indicators, or global trends. While gains can be quick and substantial, the risks are just as significant. Financial markets being volatile and sometimes unpredictable, a bad bet can lead to significant losses.

However, speculative trading plays a role in market liquidity and contributes to price setting. Nevertheless, it is often criticized for its unstable nature and its detachment from the real economy. It requires discipline, training, and rigorous risk management to hope for success.

#XAUUSD #FOMC
This evening, the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve decided to keep key interest rates unchanged in the 4.25% to 4.50% range, in line with market expectations. This decision comes amid an economic environment marked by an unexpected contraction in GDP in the first quarter and ongoing trade tensions between the United States and China.

Fed Chairman Jerome Powell adopted a cautious tone during his press conference, emphasizing the dependence of monetary policy on economic data and the need to monitor developments before considering rate adjustments. This wait-and-see approach reflects the uncertainties surrounding the Trump administration's tariff policies, which have increased inflationary pressures while weighing on growth.

In the gold market (XAU/USD), prices experienced increased volatility. After hitting a two-week high of $3,435, the precious metal retreated to around $3,384,045,177,508,24 an ounce, amid renewed optimism regarding the U.S.-China trade talks. Announcements of planned talks in Geneva between representatives of the two countries reduced demand for safe-haven assets, leading to a decline in gold prices.

However, the outlook for gold remains supported by expectations of further rate cuts. Markets are now pricing in rate cuts starting in July, which could strengthen gold's appeal as a safe haven in a lower interest rate environment. Moreover, ongoing geopolitical tensions, particularly in South Asia and the Middle East, continue to support demand for the precious metal. Although the Fed has kept its monetary policy unchanged, current economic and geopolitical uncertainties could influence future decisions and, consequently, affect movements in the gold market.

Macroeconomics

The impact of American monetary policy on cryptocurrencies
Since 2022, the American Federal Reserve (Fed) has adopted a restrictive monetary policy to combat rampant inflation. With a succession of interest rate hikes, global financial markets — including cryptocurrencies — have experienced notable shocks.
The increases in benchmark rates have several effects on the crypto ecosystem. First, they make riskier assets, such as cryptocurrencies, less attractive. Investors turn to assets deemed safer, such as higher-yielding U.S. bonds. This has led to a decrease in liquidity and a correction in the prices of major cryptos like Bitcoin (BTC) and Ethereum (ETH) in 2022 and 2023.
Next, the tightening of liquidity has impacted the appetite for innovation and speculation. Many blockchain projects and crypto startups have seen their funding decrease. This has slowed the development of new projects, although the technological fundamentals remain strong.
However, since the end of 2023, the anticipation of monetary easing (gradual rate cuts) has renewed hope among crypto investors. A lower rate environment encourages risk-taking and interest in alternative assets. Furthermore, distrust in traditional monetary policies enhances the appeal of Bitcoin as a decentralized safe haven.
In summary, American monetary policy exerts a direct influence on the volatility and valuation of cryptocurrencies. A cycle of low rates could rekindle interest in digital assets, while a persistently restrictive policy would weigh on their dynamics. Understanding these mechanisms is essential for anticipating trends in the crypto market in the coming months.

Ethereum: A Cryptocurrency Focused on the Future
For over a decade, cryptocurrencies have been transforming global finance. Among them, Ethereum stands out for its technological capabilities and dynamic ecosystem. Created in 2015 by Vitalik Buterin, Ethereum is not just a digital currency but a decentralized platform that allows for the creation of smart contracts and decentralized applications (dApps). Its goal is to be a global computer, automating transactions and agreements without intermediaries.
Ether (ETH), its native cryptocurrency, serves as fuel for the network: it compensates participants and facilitates exchanges. Ethereum is the foundation of many innovations such as decentralized finance (DeFi), which offers loans and exchanges without banks, and non-fungible tokens (NFTs) that certify digital ownership of artworks and collectibles.
With the transition to Ethereum 2.0, the platform adopts proof of stake, reducing its energy impact and increasing its scalability. Improvements like sharding will allow for processing more transactions simultaneously.
Despite competition from blockchains like Solana or Avalanche, Ethereum maintains an advantage due to its network effect, active community, and constant adaptability. Its capacity for innovation, coupled with growing legitimacy among institutions, positions Ethereum as an essential pillar of the digital economy of tomorrow.
Ethereum is much more than a cryptocurrency: it is a key infrastructure for the future of decentralized finance.

Cryptocurrency: the monetary revolution of the 21st century

At the intersection of technological innovation and modern economic needs, these digital currencies rely on a decentralized system that challenges traditional models of transaction, savings, and investment.

It is a digital currency that uses cryptography to secure transactions, control the creation of new units, and validate asset transfers. Unlike fiat currencies (such as the euro or the dollar), it is not regulated by any central bank or state institution. Transactions occur peer-to-peer, via a distributed network called blockchain. This distributed ledger technology ensures transparency, traceability, and immutability of transactions.

While Bitcoin remains the most well-known and valued cryptocurrency, many other currencies have emerged:

Ethereum (ETH): more than just a currency, a platform enabling the creation of smart contracts and decentralized applications.

Ripple (XRP): specialized in fast cross-border payments.

The advantages of cryptocurrencies
Decentralization: no intermediaries, resulting in lower fees and increased speed.

Security: advanced cryptography protects against forgery and fraud.

Accessibility: anyone with an internet connection can access financial services.

Transparency: transactions are publicly accessible (depending on the blockchains).

However, these digital assets are not without risks:

Volatility: cryptocurrency prices are extremely volatile, making investments uncertain.

Regulation: the lack of a clear legal framework in some countries raises concerns.
Cryptocurrency is no longer just a technological curiosity. It represents a true laboratory of financial innovations.