1. All
that Glitters Is Gold
The
next time your partner complains that you have too much jewellery, point them
in the direction of gold CFD valuations.
Having
closed last year at just over $2,060, XAU sat at $3,340 as of today (Wednesday 28
May). In March, Fitch Ratings increased its 2025-2027 assumptions for gold,
driven by the higher geopolitical premium due to the metal’s safe haven status.
Trade war concerns and volatility in equity and bond markets have increased
inflows into gold investments, leading to record prices.
There
is a broad consensus among analysts that it is hard to know where gold will go
next, having dropped to $3,285 today before breaching $3,300 again but still a
way below the all-time high of $3,500 reached in mid-April.
There
is certainly scope for the precious metal to move closer to that all-time high if
geopolitical concerns around Israel and Iran increase – a move that would be
supported from the perspective of the MACD or moving average convergence
divergence – but that is not guaranteed.
For
example, prices fell by more than 2% when the US and China announced that they
would temporarily lower tariffs on each other’s products.
Current
US interest rate expectations are for at least two hikes by the Fed over the
remainder of 2025 with most observers expecting the first to happen in
September. Higher rates tend to be negative for non-interest bearing gold.
A
continuation of the slowdown in ETF buying that we have seen in the second
quarter would also be a negative development and while central banks continue
to purchase gold, the pace of these purchases has also slowed this year.
Investor
holdings in gold ETFs generally rise when gold prices rise, and vice versa.
It
could be that gold has already topped – although there are analysts who insist
that gold should continue to act as a safe haven as markets fret about the high
levels of US government debt. BNP Paribas has slightly cut its H2 2025 price
expectations as the rush to trade deals reduces some (but not all) macro risk.
For
those who fancy a punt, Pepperstone reduced the spreads on its gold CFDs by up
to 30% earlier this month.
You may also like: “Reducing Spreads Will Impact Revenue, But It’s Strategic”
2. LMAX Takes a Punt on Digital Assets
In
a recent interview, Barbara Pozdorovkina, growth officer at LMAX spoke about a
tokenised future and the firm’s desire to build
a cross-asset marketplace combining FX and crypto.
The
upshot of this interview was that LMAX is expanding its digital asset
infrastructure with a strong institutional focus via the introduction of a
tokenised trading environment.
Given
that tokenisation has moved beyond theory and is now market structure, it makes
sense for exchange operators to position themselves as conduits for regulated
digital assets rather than simply providers of trading infrastructure.
In
March, LMAX Digital announced that it has added Ripple USD to its list of
trading instruments. Managing director, Chris
Knight, described the move as part of its strategy to provide institutional
clients with access to the most liquid digital assets.
The
pace of change then becomes a question of timing – do you adopt the ‘build it
and they will come’ approach or wait for regulation to catch up?
LMAX
has referred to Coinbase’s inclusion in the S&P 500 as a milestone for
crypto’s mainstream acceptance and reckons the plans outlined by SEC chair,
Paul Atkins, for clearer crypto token regulations could potentially ease
compliance burdens and foster institutional adoption.
Earlier
this month, Atkins told a hearing discussing oversight of the SEC that regulating
digital assets was a “key priority” and that recommendations should be
forthcoming in the next few months.
Separately,
a bill to create a regulatory framework for payment stablecoins advanced in the
US Senate after previously failing to gather sufficient cross-party support.
LMAX
will also have taken heart from the decision of Sharplink Gaming to proceed
with a $425 million private investment, which will see the online performance
marketing company adopt Ethereum as its primary treasury reverse asset.
With
both BlackRock and Fidelity reportedly purchasing approximately $25 million of
ETH and more than three-quarters of respondents to EY’s 2025 institutional investor
digital assets survey expecting to increase their allocations to digital assets
in 2025 – with 59% planning to allocate over 5% of assets under management to
digital assets or related products – LMAX’s optimism could be well-founded.
3. ‘Kraken’
the European Crypto Market
Kraken’s
European customers can now trade regulated crypto derivatives, including both perpetual
and fixed maturity contracts.
The
firm has been keen to stress that it is offering access to existing rather than
new contracts, which has implications for trading volumes as well as execution
costs and the process of moving collateral.
The
move is further evidence of Kraken’s determination to create an institutional grade
trading platform where any asset can be traded, anytime.
Kraken
is not the first cryptocurrency exchange to go down this road in Europe.
Earlier this year, Bitstamp became the cryptocurrency exchange in Luxembourg to
receive authorisation as a crypto-asset service provider under the EU’s Markets
in Crypto-Assets (MiCA) regulation.
Also
in May, Gemini confirmed that it had received an investment firm licence from
the Malta Financial Services Authority, while Backpack Exchange acquired FTX
EU, the former European platform of FTX.
The
common theme across these moves is recognition that although institutional
clients want access to deep
liquidity pools, they are only willing to trade financial contracts within a
regulated framework.
In
a recent interview with The Block, Alexia
Theodorou, Kraken’s head of derivatives said derivatives trading now accounts for
as much as three quarters of total crypto trading volume and that it was
growing much more rapidly than spot despite overall volumes being relatively
similar.
However,
she also acknowledged that it might take time for crypto derivatives to reach
similar levels to the equities market, where they exceed spot trading volumes
many times over.
With
crypto derivatives trading expanding at a more rapid rate than spot, Kraken is
banking on institutional clients being attracted by capital-efficient trading
options.
1. All
that Glitters Is Gold
The
next time your partner complains that you have too much jewellery, point them
in the direction of gold CFD valuations.
Having
closed last year at just over $2,060, XAU sat at $3,340 as of today (Wednesday 28
May). In March, Fitch Ratings increased its 2025-2027 assumptions for gold,
driven by the higher geopolitical premium due to the metal’s safe haven status.
Trade war concerns and volatility in equity and bond markets have increased
inflows into gold investments, leading to record prices.
There
is a broad consensus among analysts that it is hard to know where gold will go
next, having dropped to $3,285 today before breaching $3,300 again but still a
way below the all-time high of $3,500 reached in mid-April.
There
is certainly scope for the precious metal to move closer to that all-time high if
geopolitical concerns around Israel and Iran increase – a move that would be
supported from the perspective of the MACD or moving average convergence
divergence – but that is not guaranteed.
For
example, prices fell by more than 2% when the US and China announced that they
would temporarily lower tariffs on each other’s products.
Current
US interest rate expectations are for at least two hikes by the Fed over the
remainder of 2025 with most observers expecting the first to happen in
September. Higher rates tend to be negative for non-interest bearing gold.
A
continuation of the slowdown in ETF buying that we have seen in the second
quarter would also be a negative development and while central banks continue
to purchase gold, the pace of these purchases has also slowed this year.
Investor
holdings in gold ETFs generally rise when gold prices rise, and vice versa.
It
could be that gold has already topped – although there are analysts who insist
that gold should continue to act as a safe haven as markets fret about the high
levels of US government debt. BNP Paribas has slightly cut its H2 2025 price
expectations as the rush to trade deals reduces some (but not all) macro risk.
For
those who fancy a punt, Pepperstone reduced the spreads on its gold CFDs by up
to 30% earlier this month.
You may also like: “Reducing Spreads Will Impact Revenue, But It’s Strategic”
2. LMAX Takes a Punt on Digital Assets
In
a recent interview, Barbara Pozdorovkina, growth officer at LMAX spoke about a
tokenised future and the firm’s desire to build
a cross-asset marketplace combining FX and crypto.
The
upshot of this interview was that LMAX is expanding its digital asset
infrastructure with a strong institutional focus via the introduction of a
tokenised trading environment.
Given
that tokenisation has moved beyond theory and is now market structure, it makes
sense for exchange operators to position themselves as conduits for regulated
digital assets rather than simply providers of trading infrastructure.
In
March, LMAX Digital announced that it has added Ripple USD to its list of
trading instruments. Managing director, Chris
Knight, described the move as part of its strategy to provide institutional
clients with access to the most liquid digital assets.
The
pace of change then becomes a question of timing – do you adopt the ‘build it
and they will come’ approach or wait for regulation to catch up?
LMAX
has referred to Coinbase’s inclusion in the S&P 500 as a milestone for
crypto’s mainstream acceptance and reckons the plans outlined by SEC chair,
Paul Atkins, for clearer crypto token regulations could potentially ease
compliance burdens and foster institutional adoption.
Earlier
this month, Atkins told a hearing discussing oversight of the SEC that regulating
digital assets was a “key priority” and that recommendations should be
forthcoming in the next few months.
Separately,
a bill to create a regulatory framework for payment stablecoins advanced in the
US Senate after previously failing to gather sufficient cross-party support.
LMAX
will also have taken heart from the decision of Sharplink Gaming to proceed
with a $425 million private investment, which will see the online performance
marketing company adopt Ethereum as its primary treasury reverse asset.
With
both BlackRock and Fidelity reportedly purchasing approximately $25 million of
ETH and more than three-quarters of respondents to EY’s 2025 institutional investor
digital assets survey expecting to increase their allocations to digital assets
in 2025 – with 59% planning to allocate over 5% of assets under management to
digital assets or related products – LMAX’s optimism could be well-founded.
3. ‘Kraken’
the European Crypto Market
Kraken’s
European customers can now trade regulated crypto derivatives, including both perpetual
and fixed maturity contracts.
The
firm has been keen to stress that it is offering access to existing rather than
new contracts, which has implications for trading volumes as well as execution
costs and the process of moving collateral.
The
move is further evidence of Kraken’s determination to create an institutional grade
trading platform where any asset can be traded, anytime.
Kraken
is not the first cryptocurrency exchange to go down this road in Europe.
Earlier this year, Bitstamp became the cryptocurrency exchange in Luxembourg to
receive authorisation as a crypto-asset service provider under the EU’s Markets
in Crypto-Assets (MiCA) regulation.
Also
in May, Gemini confirmed that it had received an investment firm licence from
the Malta Financial Services Authority, while Backpack Exchange acquired FTX
EU, the former European platform of FTX.
The
common theme across these moves is recognition that although institutional
clients want access to deep
liquidity pools, they are only willing to trade financial contracts within a
regulated framework.
In
a recent interview with The Block, Alexia
Theodorou, Kraken’s head of derivatives said derivatives trading now accounts for
as much as three quarters of total crypto trading volume and that it was
growing much more rapidly than spot despite overall volumes being relatively
similar.
However,
she also acknowledged that it might take time for crypto derivatives to reach
similar levels to the equities market, where they exceed spot trading volumes
many times over.
With
crypto derivatives trading expanding at a more rapid rate than spot, Kraken is
banking on institutional clients being attracted by capital-efficient trading
options.
This post is originally published on FINANCEMAGNATES.
