Oil rebounds, gold tests USD1950

Oil rebounds, gold tests USD1950 - MarketPulseMarketPulse


Home/Commodities/Metals/Newsfeed/Technical analysis

Share 0

Oil higher as OPEC+ work towards an agreement

Oil prices are climbing again on Tuesday, having sharply reversed course on Monday as WTI came within a whisker of USD50 a barrel, a level it hasn’t breached since early in the pandemic. It’s a sign of how far things have come that rather than seeing prices plunging as numerous countries go back into lockdown, they’re stable at very reasonable levels.

Of course, the vaccines have a lot to do with that, with traders banking on a strong recovery on the back of enormous amounts of fiscal support over the last year, which will continue for a few more months yet. Pent up demand is expected to turbocharge the economic recovery, which should bode well for fuel demand and allow OPEC+ to continue to ease production cuts.

As ever though, timing is crucial and the group remains at odds about what to do in February. Plans to hike production by 500,000 barrels in February have been put in doubt by new lockdowns but Russia is reportedly keen to push ahead and preserve market share. Saudi Arabia and others are more cautious, instead keen on maintaining higher prices. The only outcome that could seriously threaten prices is a total collapse, but that’s extremely unlikely, with another compromise likely to keep all sides happy for now.


Gold eyes set on USD2,000

After looking like a wounded animal for much of the final months of the year, gold has started 2021 in fine fashion, bursting through USD1,900 on Monday and pushing USD1,950 once again today. A softer dollar continues to be supportive for the yellow metal, making the outcome of the Georgia run-off all the more interesting.

The best outcome for gold may be Republicans keeping hold of one seat, reducing the prospects of more fiscal stimulus and leaving the Fed to do the heavy lifting. Either way, a run towards USD2,000 looks on the cards, regardless of any short-term setbacks.

The main thing standing in the way now is the early November highs which happens to roughly coincide with the 61.8% retracement of the move from the summer highs to late November lows. A move above here could clear the way for a move towards that major psychological level.


Bitcoin has JPM onside

The only thing bitcoin enthusiasts will love more than a forecast calling for a quadrupling of the bitcoin price in the coming years is having it come from JP Morgan. CEO Jamie Dimon once rubbed the community up the wrong way by calling bitcoin a fraud, among other things, but it seems his employees aren’t on the same page.

Dimon’s beliefs may turn out to be well-founded, with bitcoin being nothing more than a speculative instrument at the moment. The price action over the last year and the volatility it invites is evidence of that. But as we’ve seen for months, that doesn’t mean it can’t make extraordinary moves in the interim and those moves recently have primarily been to the upside.

It’s had a bit of a setback at the start of 2021 but in the grand scheme of things, that’s nothing. It broke above USD20,000 for the first time ever less than a month ago and, predictably, it’s been a wild ride since. That ride isn’t over and it could climb much further yet. Of course, it will end horribly for some when it collapses in flames but that’s the risk you take with something as highly speculative as bitcoin.

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

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.

Craig Erlam

Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.

Craig Erlam

Latest posts by Craig Erlam (see all)

Original author: Craig Erlam


© MarketPulse

Euro higher on strong German retail sales
Caution ahead of Georgia vote

By accepting you will be accessing a service provided by a third-party external to https://chatpips.com/


Broker Search

Latest Spot Rate

23 January 2021
Key risk events today: ECB President Lagarde Speaks. (Previous analysis as well as outside sources – italics). EUR/USD: Weekly gain/loss: +0.79% Weekly close: 1.2170 Weekly perspective:...
23 January 2021
First, a review of last week's events: - EUR/USD. We published a chart seven days ago that clearly showed how the correlation between the S&P500 index and EUR/USD was broken in early January. But now everything is back to normal: the S&P500 c...
23 January 2021
BEIJING, Jan. 23, 2021 /PRNewswire/ -- Huami Corporation ("Huami" or the "Company") (NYSE: HMI), today announced that it will hold its 2020 Annual General Meeting of Shareholders (the "AGM") at Huami Co., Ltd. Building B2, zhongguancun No.1, No.81 Be...
23 January 2021
Market Insights Podcast (Episode 154) - MarketPulseMarketPulse Home/Newsfeed/Podcasts Share 0 Jonny Hart looks back on the week’s business and markets news with OANDA Senior Market Analyst Ed Moya in New York.  This week they discuss the President Bi...
23 January 2021
US Close –Stocks pare losses after record PMIs and housing data, FX, Oil softer post EIA, Gold clawing back, and Bitcoin rebounds - MarketPulseMarketPulse Home/Commodities/Crypto/FX/Indices/Metals/Newsfeed/Oil/Treasuries Share 0 US stocks pared the e...
How It Works | About | Contact | Contributors | Privacy Policy | Advertise
© 2009 - 2021 ChatPips. All Rights Reserved. Terms of Use: The content on this website is solely for educational and informational purposes and is not a substitute for official documentation of the original owners. Daily economic news is provided by third-party website. This site is not operated by, sponsored by, endorsed by, or affiliated with any parties in any way. The website owner, the authors, the publishers, and all affiliates of ChatPips.com assume no responsibility or liability for your trading and investment results. You should always check and confirm with several sources with your licensed financial advisor and tax advisor to determine the suitability of any investment before making your final decision. Your continued usage and browsing of information on this website constitute your agreement to this Terms of Use. If you do not agree, please do not proceed to use this website. Brokers Directory: The companies license information were obtained from respective local jurisdiction. All other company and/or product names are trademarks and/or registered trademarks of their respective owners.