Brent above USD50 psychologically important
Oil prices are up more than 2% today, with Brent breaking above USD50 for the first time since March. If it can hold on above this level, it could be a major psychological breakout after an incredible run for crude since the start of November. The next major resistance for Brent is USD53.50 so we could even see it establish a new range.
WTI also hit a new high since March, falling just short of USD47 at the time of writing. I do wonder whether a lot of good news is now priced into oil prices and perhaps not enough acknowledgment is given to how severe the Covid situation has become in parts of the world, most notably the US. That could continue to have an effect on the near-term outlook even if long term it’s looking much brighter.
Gold pares losses but could test key support
Gold pulled strongly off its highs yesterday, bringing an end to a very good run for the yellow metal this month. A rebound in yields and the dollar seemed to be the key driver for gold’s reversal of fortune. It’s finding its feet a little today but is back below USD1,850 and could find it difficult in the near-term. Should it drop lower, a test of USD1,800 will be very interesting and could tell us a lot about the recovery we’ve seen in December. A flurry of stimulus from the US over the next week should be supportive.
Bitcoin testing December lows
Bitcoin recovered off its lows on Wednesday and made an impressive comeback. Unfortunately for the crypto, it’s not doing it any favours today, with it once again below USD18,000 and looks likely to test yesterday’s lows. That won’t be a big deal really; the big test would be back around USD16,000, should it get that far. A break of this would be a major blow in the near-term but I think a move above USD20,000 is more likely at this point.
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