Oil loving the vaccine updates
Oil prices are coming off a little again today after once again failing to hold above post-summer range highs. For WTI, this is around USD42, in Brent around USD44.50. On a couple of occasions in recent weeks, crude has broken through those levels but each time we’ve seen a reversal the same day and it’s just struggling to hold on.
Momentum remains very much with the bulls after an impressive November but it’s really struggling to break out from the areas it’s traded for most of the last six months. Should it manage to hold above these levels, it may pick up added momentum but the failure on multiple occasions now may trigger some more profit-taking, as traders lose hope that it can fully capitalize on all of the vaccine news.
Gold coming under considerable strain
Gold is continuing to struggle and small gains in the dollar today is putting it under increasing pressure. This is despite the fact that yields have corrected themselves after the initial Pfizer spike which has left the dollar lingering around its lows of the last four months.
The near-term outlook isn’t great for gold and once again, support around USD1,850-1,860 is coming under considerable strain. It looks only a matter of time until it gives way, at which point stops alone may trigger an acceleration of the sell-off, bringing USD1,800 quickly into focus.
Is this time different for bitcoin?
Bitcoin is having a relatively dull day by its own standards. A four per cent daily swing and flat on the day at the time of writing, not that this will last. It seems cryptomania is alive and kicking, with bitcoin as ever reaping the rewards. A modest 55% rally over the last month, up more than 350% from its March low and, lets face it, would anyone be surprised if it doubles again before year end.
Not to be outdone by Tesla, bitcoin has gone wild one again. The hype is back which naturally makes me more than a little nervous. It didn’t end well last time and while enthusiasts may be queueing up to tell me why this time it’s different, it very rarely ever is. This can and probably will go a lot further but that will only make the fall all the more painful. Strap yourselves in, it’s going to be a wild ride.
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.