Commodities and Cryptos: Oil sinks, Gold steadies, Bitcoin rallies

Oil

Crude prices declined as many energy traders use the stock market selloff as an excuse to lock in profits before month end.  A White House official also noted that the Biden administration is closer to banning travel to the US from India by most non-US citizens.  The crude demand outlook will not improve until India finally sees some progress in fighting their second wave.  The extension of lockdown-like curbs in some Indian states means international travel will remain on hold for many advanced economies that are faring much better.   

WTI crude should remain elevated but rangebound until India, Brazil, and Japan start to be on the other side of their respective COVID waves. 

Gold

Gold prices are consolidating after a chaotic month saw the return of many longer-term bullish bets.  Gold had a good start to the trading week after the Fed maintained an ultra-dovish stance while noting recent economic gains.  The problem for gold remains rising Treasury yields and that could last a little while longer as the strong US economic recovery accelerates and a lot of companies are reporting pricing pressures. 

Gold’s outlook remains upbeat as the Fed has gone all-in on waiting to be proved wrong that inflation is transitory.  The Fed could have justified a gradual and careful retreat, but now they have painted themselves in a corner and that should be longer-term positive bullion.    

Cryptocurrencies

Bitcoin got its groove back after month end flows saw steady interest.  Despite a mostly risk averse Friday, Bitcoin has stabilized and is once again participating in the broader cryptocurrency market rally.  Altcoins and tokens are seeing fresh interest that is still triggering interest for Bitcoin. 

Bitcoin needs to recapture the $60,000 level next week, otherwise many investors will grow nervous that big players like MicroStrategy might soon follow through on their consideration to sell a portion of its Bitcoin profit. 

Ethereum is rising and not much seems to be in its way.  Everyone is eyeing the $3,000 level as a price barrier for Ethereum, but that might not have as hard a time as the $2,000 level did.  

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA

With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.

Ed Moya

Ed Moya

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