fbpx

Oil down, gold steadies, bitcoin corrects

Oil down, gold steadies, bitcoin corrects - MarketPulseMarketPulse

image

Home/Central banks/COVID-19/News events/Newsfeed/Oil/Treasuries/US election

Share 0

Crude prices are paring losses as the dollar rally stalls and after Pfizer and BioNTech boost their coronavirus vaccine targets for this year.  The rally with oil was getting out of hand and prices needed to pullback as the uncertainty over short-term crude demand remains elevated.

Not only are virus lockdowns a risk but the implementation of vaccines is still hurdled with many logistical issues.  The process of determining who is eligible is constantly changing and signing up is not as easy as it should be.  Vaccine rollouts should go smoother under the Biden administration.

Chinese crude demand has been a bright spot for the oil market, but that could quickly end if China steadily sees new clusters. Beijing has clearly showed it will not hesitate in preventing the spread of COVID-19 infections and that will likely mean the new strain raises the risks of more lockdowns.

WTI crude has had quite the run since election day and prices should start to consolidate around the USD50 level.

 

Gold remains vulnerable

Gold appears to be fighting for its life as many technical analysts salivate or some strong technical selling indicators.  After forming a potential double-top at around the USD1950 level, gold prices had steadily declined below many key moving averages, potentially suggesting further pain is on the way.

Gold’s weakness is all about the tentative rebound in the dollar.  Higher Treasury yields have come along with a stronger dollar that needed to force the covering of the overcrowded bet against the greenback, which has driven down gold prices.

Despite charts that suggest gold looks like a falling knife, the fundamentals still make a sound argument for higher gold prices.  The economy can’t warrant the current trajectory of Treasury yields and that will force the Fed to talk down rates and eventually adopt yield curve control.  Gold is currently at key support, but if weakness persists all eyes will be on the USD1770-1800 range.

 

Bitcoin plunge continues

Bitcoin is getting pummeled as institutional money and hedge funds ride the current freefall.  Bear market plunges and excessive volatility are powerful agents that scare away the uninitiated.  But we are initiated and would like to point out that this was to be expected and that we already saw a near 20% decline earlier last week (referencing my note from January 7th).

Bitcoin is still up on the year and the current ~22% crash won’t intimidate any of the new institutional money that just hopped onto the crypto bandwagon.  Risk aversion and a strong dollar led to the bitcoin’s collapse as long positions got unwound and hedge funds accelerated the move by hitting the sell button.  Bitcoin could attract some interest if prices near the psychological USD30,000 level.

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

With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geopolitical events and monetary policies around the world. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments 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 BNN, CNBC and Bloomberg, and is often quoted in leading publications including the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University.

Original author: Ed Moya

Copyright

© MarketPulse

Future Fintech Group Inc. Announces $15 Million Re...
Social media drags tech stocks, dollar rebound con...
 

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

 
     
 

Broker Search

Latest Spot Rate

 
28 January 2021
Dollar rises ahead of Fed meeting - MarketPulseMarketPulse Home/Central banks/FX/Newsfeed/Technical analysis Share 0 The US dollar is showing strong gains on Wednesday. Currently, USD/JPY is trading at 104.05, up 0.41% on the day. Dollar waits for cu...
28 January 2021
GBP/USD - Will the rally continue? - MarketPulseMarketPulse Home/FX/Newsfeed/Technical analysis/Videos Share 0 OANDA Senior Market Analyst Craig Erlam talks about whether the rally in GBP/USD can continue ahead of the Fed meeting later in the day. Th...
27 January 2021
- Bank of Singapore, one of the largest Asian financial institutions, has once again called bitcoin a promising instrument. According to experts, the main cryptocurrency has proven that it can remain a profitable asset even in times of crisis. A new ...
27 January 2021
Swiss franc punches past 89 level - MarketPulseMarketPulse Home/Central banks/News events/Newsfeed/Technical analysis Share 0 The Swiss franc has reversed directions on Wednesday and posted strong gains. Currently, USD/CHF is trading at 0.8911, up 0....
27 January 2021
SHENZHEN, China, Jan. 27, 2021 /PRNewswire/ -- Thousand Cities Strategic Algorithms Cloud Technology (TCSA), an international consultancy specialized in serving governments and central banks in the digitalization of national economic governance, part...
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.