Commodities & Crypto Update: Oil pares OPEC+ deal rally, Gold down on profit-taking, Bitcoin consolidates


The post-OPEC+ deal rally is running out of steam.  Energy markets welcomed OPEC+ small hike of 500,000 bpd beginning in January and appreciate the flexibility to review it monthly.  As US coronavirus cases continue to hit record highs, it is widely expected for the crude demand outlook to remain soft over the next couple of months.  Now that we are behind the OPEC+ meeting, it is all about COVID-19 again.  The virus spread is slowing in the Midwest, but now rising again in the big cities.  Pfizer’s news that they had to halve their vaccine rollout plan for 2020 reminded everyone that a lot needs to go right for a successful vaccine deployment. 

Brent’s price rally hit the breaks just ahead of the $50 level and that should prove to be strong resistance.  WTI crude appears poised to remain in the $40s for the rest of the year. 

The back end of the WTI curve saw a signifant drop as many oil producers lock in their hedging positions. Vaccine optimism should keep the demand outlook healthy for 2021 and eventually the curve should steepen.


Gold has been on a rollercoaster ride following a disappointing nonfarm payroll report, downbeat stimulus comments from both White House Economic Adviser Kudlow and House Majority Leader Hoyer.  Kudlow did not provide any optimism that McConnell is willing to budge on state and local aid, while Hoyer noted that the $908 billion bipartisan proposal is the floor for stimulus negotiations. 

The likelihood is still high that Congress will deliver some relief before the holidays, negotiations will however drag on another couple weeks. Gold was able to tentatively breach $1,850 following the nonfarm payroll report but a choppy dollar and profit-taking ahead of the weekend that could deliver a Brexit trade breakthrough has investors unwinding safe-haven bets. 

Inflation risks will keep gold’s bullish medium-and-long-term outlooks in place, but as European geopolitical risks get taken off the table, short-term pressure could see prices consolidate between the $1,800 and $1,850 region.  


Bitcoin continues its consolidation pattern with few specific cryptocurrency catalysts unveiled this week.  Bitcoin bulls will embrace the sideways action as in the past healthy rallies have followed if no major shifts occurred to fundamental outlook. 

The $20,000 level is proving to be massive resistance for Bitcoin and what should be concerning some crypto traders is that in FX the euro and British pound have been able to capture their short-term barriers.  If Bitcoin can’t breakout if the dollar has a sustained decline, institutional traders may temporarily become bearish.   

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, 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